ASIC has issued a warning to credit providers and debt management companies that it plans to target predatory lending and high-cost credit as it focuses on protecting consumers facing hardship.
ASIC deputy chair Sarah Court said in a statement that the regulator will also target misconduct impacting consumers experiencing financial difficulty.
According to ASIC’s latest regulatory update, it secured more than A$30 million of penalties for misconduct by credit providers in the March quarter.
In one case, ASIC took consumer finance company Membo Finance to court, alleging that Membo (which trades as ClearLoans) contravened the National Consumer Credit Protection Act by failing to deal appropriately with customers in hardship.
ASIC alleged that Membo failed to provide written decisions in response to hardship applications, failed to give notice of direct debit defaults and failed to give debtors time to correct defaults. The company was ordered to pay more than A$6 million in penalties.
Court said that, aside from court action, ASIC would use its stop order powers under design and distribution requirements and issue direct warnings to companies.
Recent ASIC guidance has included an Indigenous Financial Services Framework.