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Business models designed to avoid consumer credit protections and used car finance will be enforcement priorities for the financial regulator next year.
The Australian Securities and Investments Commission (ASIC) has revealed the key areas where it will direct resources and expertise in 2025.
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Each year, the regulator identifies several enforcement priorities to address areas of risk or misconduct and this year revealed it has a particular focus on protecting consumers from financial harm.
As part of this, the regulator will focus on a range of lending practices, including whether there are specific business models being used to purposefully avoid consumer credit protections.
ASIC has raised concerns that some private lenders, for example, may be operating under models that are “designed to avoid the application of the Code and the National Consumer Credit Protection Act 2009”. This concern is a core part of its legal action currently underway against Oak Capital (an allegation that Oak refutes).
Other areas of focus in credit include misconduct impacting small businesses and their creditors; used car finance sold to vulnerable consumers by finance providers; unlawful debt management and collection misconduct; and unscrupulous property investment schemes (particularly those that exploit superannuation savings).
Outside of lending, ASIC’s enforcement priorities for 2025 will also look at:
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Failures by insurers to deal fairly and in good faith with customers.
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Licensee failures to have adequate cyber security protections.
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Greenwashing and misleading conduct involving ESG claims.
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Member services failures in the superannuation sector.
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Auditor misconduct.
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Strengthening investigation and prosecution of insider trading.
Revealing the priorities, ASIC’s deputy chair Sarah Court said: “Our 2025 enforcement priorities reflect the increased risks consumers are facing that are being driven by cost of living pressures. These priorities are about protecting Australians from financial harm and targeting the people who try to take advantage of them.
“We will focus on business models that are designed to avoid consumer credit protections, and we will take action against those engaging in unlawful debt management and collection. We will also target conduct that exploits superannuation savings, with a particular focus on unscrupulous property investment schemes.
“ASIC will continue to fiercely uphold the integrity of Australia’s financial markets, and to support this, we have established a new dedicated team to target insider trading.”
The regulator will also continue to follow its ‘enduring priorities’, which include misconduct (including if it is damaging market integrity, impacting First Nations people, and involves a high risk of significant consumer harm), predatory behaviours targeting financially vulnerable consumers, systemic compliance failures by large financial institutions resulting in widespread harm, governance and directors’ duties failures, and new or emerging risks to the financial system.
ASIC has been increasing its litigation and investigation activity over the past year. It has increased its new investigations by 25 per cent on the previous year and increased new civil proceedings by 23 per cent.
However, it currently has more matters before criminal courts around the country than it does before civil courts.
Its enforcement actions resulted in over $90 million in court-ordered penalties in the last year.
[Related: ASIC has car finance brokers in its sights]
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