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ASIC has cracked down on two firms that invented business models to avoid NCCP obligations.
The regulator announced that payday lenders Cash Loan Money Centres and Sunshine Loans have agreed to end 'leaseback' arrangements to consumers who want a payday loan.
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ASIC was concerned that they were using business models which "deliberately attempt to avoid" the consumer protections contained in the NCCP's small amount lending provisions.
According to ASIC, Cash Loan Money Centre clients would 'sell' a household item such as a fridge to the lender, and in return receive money and the right to lease back the item.
Sunshine Loans clients would assign the rights to use their mobile phone or car to the lender for a fee, and then simultaneously lease back the rights.
ASIC said its main concern was that clients of both lenders were charged "considerably more" than the amount allowed under the legislative cap on costs for payday loans.
It offered one example in which a client repaid $1,682 on a loan of $1,000, even though the statutory maximum for a small amount loan of the same amount was $1,280.
Deputy chairman Peter Kell said ASIC would take action whenever it encountered business models that are designed to avoid consumer credit obligations.
"Payday lenders and their advisers need to ensure any change to their lending models are legitimate and do not seek to avoid the small amount lending provisions," he said.
[Related: Companies face $7.7m fines in 'landmark' NCCP prosecution]
