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Lender misconduct, predatory lending, and high-cost credit are being targeted by the financial services regulator over the coming months.
The Australian Securities & Investments Commission (ASIC) has warned that it will be cracking down on lenders that “look to take advantage of vulnerable consumers”, as it looks to stamp out predatory lending, high-cost credit, and lending misconduct.
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ASIC deputy chair Sarah Court has said that ASIC is continuing to “sharpen its focus” on credit providers and debt management firms, including those that are unlicensed or ‘fringe’ entities, as it looks to protect consumers.
Speaking after issuing the warning, Ms Court said: “Credit providers and debt management firms that look to take advantage of vulnerable consumers are in our sights and we expect further action in the coming months against operators in this area.
“ASIC’s enforcement action against predatory lending is not limited to court action. We will continue to use our full suite of powers to protect consumers looking to access credit.”
She suggested that this could be via a ‘stop order’ for breaching the financial product design and distribution requirements or a warning issued to the company directly via ASIC’s monitoring and surveillance programs.
Ms Court flagged ASIC’s recent action against ClearLoans (which was ordered to pay more than $6 million in penalties for failing to act efficiently, honestly, and fairly when dealing with debtors in financial hardship as well as other misconduct) at the beginning of this year as an example of this.
“ASIC also took action against credit provider Green County and issued stop orders on several credit products, including a credit for rent product,” she said.
Other action that ASIC has taken recently includes:
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Taking action against ANZ Banking Group for breaching the National Credit Act with the bank receiving a $10 million penalty over its Home Loan Introducer Program
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Suing Mercer Superannuation (Australia) Limited for allegedly making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
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Achieving a $15 million penalty against GetSwift — the largest penalty levied to date against a company for breaching its continuous disclosure obligations
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Issuing over $140,000 in infringement notices in the past six months in response to concerns about alleged greenwashing.
“The enforcement outcomes of the last quarter reflect that we will not hesitate to take swift action where we see misconduct that harms consumers or undermines market integrity. Where appropriate, we will also test new areas of the law, as we are doing with our greenwashing and whistleblower cases,” Ms Court said.
[Related: ANZ hit with $10m fine]
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