ASIC has taken aim at two payday lenders, alleging they have shirked responsible lending obligations.
The watchdog has begun civil proceedings in Federal Court against Gold Coast-based Teleloans Pty Ltd and Finance & Loans Direct Pty Ltd.
ASIC said the companies have claimed they do not have to comply with certain NCCP consumer protection laws, because their loans are exempt under a short-term credit exemption. But the regulator has argued that the companies do not fall under the exemption, and must comply with all aspects of the NCCP including responsible lending obligations relating to payday loans and caps on fees and charges.
"These proceedings will ensure that payday lenders do not deliberately structure their businesses to circumvent laws that protect consumers. This is particularly important as the consumers who access these small amount loans can be financially vulnerable," ASIC deputy chairman Peter Kell