A short-term lender that charges interest rates of more than 300 per cent and disguises its loans as diamond trading will have to fend off claims brought by the Australian Securities and Investments Commission.ASIC said yesterday that it had filed proceedings in the Federal Court in Brisbane against Fast Access Finance. ASIC said in a media release that it contends Fast Access Finance "engaged in unlicensed credit activities". The regulator said it was seeking civil penalties orders against the FAF companies, as well as compensation for six consumers.ASIC asserts the FAF companies "operated under a business model where consumers seeking small value loans were required to sign documents which purported to be for the purchase and sale of diamonds in order to obtain a loan.""ASIC alleges in its claim that the purchase and sale of diamonds was a pretence as there were no diamonds involved in the transaction… rather the diamond purchase and sale contracts were designed to camouflage what, in reality, were loan transactions to which the National Consumer Credit Protection Act 2009 applies." ASIC claims "the diamond contracts were devised with the intention of avoiding consumer credit legislation, in particular the 48 per cent interest rate cap that applies in Queensland."A decision of the Queensland Civil and Administrative Tribunal in late 2011 sheds some light on the business practices of FAF.The QCAT adjudicator, William LeMass, found that FAF applied an interest rate of 318 per cent on a $1000 loan to allow two applicants to pay their rent, with repayments of $98 a week over five months.QCAT also found that Fast Access required the applicants to sign a purchase and a sale agreement for diamonds said to have a value of $2000. No diamonds were ever sighted.QCAT said the FAF position on the contracts was a "complete fiction".