A payday lender has been slapped with the largest civil penalty ever obtained by ASIC, demonstrating the regulator’s ‘no tolerance’ policy for irresponsible lending.
Payday lender, The Cash Store and loan funder, Assistive Finance Australia were charged with $18.975 million in penalties by the Federal Court for their failure to comply with consumer lending laws.
The Court handed down the penalty following its decision in ASIC v The Cash Store
. It found that the payday lender and Assistive Finance Australia failed to comply with their responsible lending obligations and that The Cash Store had unconscionably sold "useless" consumer credit insurance to customers – the majority of whom were on low incomes or in receipt of Centrelink benefits.
The penalty is the largest civil penalty ever obtained by ASIC.
“This is a landmark case for the consumer credit regime and is essential reading for all credit licensees. The significant size of the penalty imposed shows ASIC and the Court take these obligations very seriously, as must all lenders, no matter how small the loan is,” ASIC Deputy Chair Peter Kell said.