The average Australian household was carrying somewhere around $300,000 in debt as of June 2025, most of it credit card and mortgage debt. But other forms of debt were also in the mix, including outstanding balances on buy now, pay later (BNPL) products, personal loans, and payday loans. A lot of this eventually gets paid off, but when it doesn’t, people and businesses can be forced to go bankrupt, to their long-term detriment. 

A recent report from Financial Counselling Australia (FCA) – – reveals that more and more businesses are compelling debtors to file for bankruptcy, especially in sectors where consumer protections are weak and both hardship relief and dispute resolution are hard to come by.��

In the six years since the FCA released its initial report, better data has become available, and what it shows may come as a surprise to many Australians.

ATO, strata bodies, non-bank lenders top the list

The report draws on the 6700 creditor’s petitions (forced bankruptcy applications) filed in the Federal Court for the financial years 2021–22 to 2024–25. It reveals that most of the forced bankruptcies were at the hands of a small number of creditor types.

One of those is the Australian Tax Office, the creditor that drove the most bankruptcies over the reporting period (13% of the subjects of ATO petitions). But the ATO was followed closely by strata bodies and non-bank lenders, which each forced 12% of the subjects of their creditor petitions to file for bankruptcy. Strata-related bankruptcies went up 33% nationally since 2021–22.

Since FCA’s 2019 report, the number of creditor petitions that led to bankruptcy has tripled, “with serious and potentially avoidable consequences” for the people involved, FCA says. In the financial year 2024–25, four out of ten creditor petitions resulted in forced bankruptcy, often over debts as small as $10,000.

In previous years, debt collectors and major banks drove the bulk of the bankruptcies. Both sectors have mandatory consumer protections.

“Forced bankruptcy is one of the most serious tools available to creditors and should only be used as a genuine last resort,” says FCA CEO Dr Domenique Meyrick.

“Our report shows that without stronger safeguards and modernised laws, Australians risk losing their homes and livelihoods unnecessarily over relatively modest debts.”

FCA is calling on the federal government to raise the bankruptcy threshold to $20,000 and to expand hardship protections and regulatory oversight across high-risk sectors, including strata, motor vehicle finance, small business lending, government, and education.

Put into debt by a partner

Coerced business debt – which can lead to bankruptcy – is another issue raising concerns among consumer advocates. A recent report from Monash University and the Redfern Legal Centre revealed that women are most often the victims of this form of financial abuse, belatedly discovering that their ex-partner had secretly involved them in their business affairs and made them responsible for debts they had nothing to do with incurring.

In many cases, affected women only find out about the debt after being contacted by the ATO.��

“These victim-survivors often can’t afford legal representation, and the business structures they’re trapped in are costly and complex to unravel,” says Redfern Legal Centre’s Jasmine Opdam, adding that business creditors “are not legally required to have hardship policies”. 

Monash Business School’s associate professor Vivien Chen says the research “exposes a significant policy blind spot”.

“While Australia has made progress in addressing financial abuse through consumer credit reforms, there has been little recognition of how company and tax systems can also be exploited to cause harm,” Chen says. “We need to treat coerced business debt as a serious form of economic abuse and design safeguards to reflect that reality.”

The post Which creditors are forcing Australians to go bankrupt? appeared first on ����Vlog.

It’s hard to get a loan from a traditional bank when you don’t have assets that show your capacity to repay. If you’re in this situation, you might be inclined to turn to a non-bank lender. There are many in Australia, including MoneyMe, whose advertising seems to be everywhere at the moment. 

MoneyMe has significantly upped its investment in marketing in recent years, and it seems to be working. Since listing on the ASX in 2019, MoneyMe has grown more than ten-fold. 

About 38% of the loans MoneyMe approved in the 2024–25 financial year were unsecured, meaning the lender was taking a chance on the borrower’s ability to manage the debt. That’s not unusual with lenders, but MoneyMe’s marketing, along with that of similar players, seems to target people willing to pay a high price for a quick loan. 

The fees and interest rates with non-bank lenders often catch borrowers by surprise. And it’s not just MoneyMe, but the entire non-bank loan sector that combines strong marketing strategies with high-cost credit to drive profits. 

Read more: Car loan providers investigated after buyers left with lemon cars and mounting debt

Extensive broker partnerships 

MoneyMe opened its doors in 2013 and is a relatively small player in the non-bank sector, but it has lent out a lot of money – $1.6 billion at end of the 2024–25 financial year, up around 28% compared to the previous financial year.  

Even without its marketing efforts, this ambitious lender has considerable reach. Most of MoneyMe’s loans are financed through its Autopay vehicle platform ($911 million in the 2024–25 financial year), and it has partnered with around 4200 dealers and loan brokers, who refer customers to this financing option, while around 3200 brokers refer customers to its personal loans options, which are offered through both MoneyMe and its subsidiary, SocietyOne. 

MoneyMe says its target market is clients who are willing to make payments over an extended period and can manage interest rate increases. But, of course, some get in trouble along the way and aren’t able to keep up with the payments. In the 2024–25 financial year, MoneyMe moved from outsourcing debt collection to doing it in-house, which improved recovery rates by 36%.

Read more: Car loan provider Money3 facing irresponsible lending claims

Loans within the hour 

To qualify for a MoneyMe loan you need to be at least 18 and have some income. Having a black mark on your credit record indicating a previous problem with paying off debt won’t automatically disqualify you. You can potentially borrow up to $70,000. The minimum you can borrow is $5000.

This is known as a low-doc loan – one that you qualify for with minimal documentation of your financial position. Mainstream lenders such as banks generally require more proof of your creditworthiness than non-bank lenders, though they also offer unsecured and low-doc loans. And the responsible lending rules – which require lenders to ensure loans are suitable for a client’s financial situation – apply to all financial licence holders.    

You can get your MoneyMe loan quickly – perhaps within the hour if you qualify – but the interest rate would likely be high if your assets are low. 

Access to your bank account and screen scraping

The way the MoneyMe loan approval process works has raised concerns among consumer rights groups that regularly hear from people in financial distress.  

As with so many online lenders these days, it’s all automatic – and in this case, potentially invasive. MoneyMe asks for your bank account login details and checks the assets and liabilities in your account using technology from a firm called Proviso (owned by the credit rating agency Illion, which is in turn owned by the Ireland-based credit rating agency Experian). 

This is also known as screen scraping, and it’s a controversial practice that financial counsellors say is outdated and unsafe. MoneyMe also gives you the option of mailing in bank statements, though it advises that the application process will take longer. 

In addition to looking at your bank account, a MoneyMe spokesperson tells ����Vlog that interest rates are based on a borrower’s Equifax credit profile, “consistent with standard industry practice, including major banks”. The weaker the profile, the higher the interest rate.

A MoneyMe spokesperson tells ����Vlog that its screen-scraping provider is a service “widely used by the industry to assist with the affordability assessment as part of responsible lending checks”.

It’s all made to be as frictionless as possible, but maybe a bit of friction isn’t a bad thing where borrowing money is concerned – especially when you don’t have a lot of it to begin with.

Read more: ASIC aims to put an end to Cigno as loan provider’s legacy lives on

High fees and interest rates

As with many other non-bank lenders that promise quick money (or ‘same day loans’), MoneyMe loans are generally expensive. For loans up to $15,000 there’s a loan establishment fee of $395, which increase to $495 for loans up to $70,000. In both cases, there’s also a $10 monthly fee. 

All of this is on top of the interest you’ll pay, which can apparently range from 5.99% (or a 6.70% comparison rate, which factors in the fees) to 24.49% (25.90% comparison rate). We’ve also seen reports of MoneyMe comparison rates of 26.99%. MoneyMe declined to answer our questions about its range of interest rates.

Paying 25% interest per year on any loan makes it very pricey. If you borrowed $5000, you’d end up paying back approximately $7517 if you paid it off in three years. If it took you five years to clear your debt, you’d be paying back almost twice as much as you borrowed, or $9405. 

If you paid off a $70,000 loan at 25% interest over five years, you’d end up paying around $123,856. These are only estimates – the exact amounts would depend on a number of variables for each customer. 

Loans at these rates for people who can’t pay off the principal can spell financial disaster. 

Collective warning from consumer advocates

MoneyMe’s lending practices have been a cause for concern among consumer rights groups.

After hearing concerns about MoneyMe’s approach to approving loans, we contacted three of Australia’s most prominent consumer advocacy organisations – Financial Counselling Australia (FCA), the Financial Rights Legal Centre (FRLC) and the Consumer Action Law Centre (Consumer Action). 

Director of casework at FRLC, Alexandra Kelly says the organisation receives 10 to 20 calls a month from MoneyMe customers who find themselves falling behind on loan repayments or have other issues, which is a lot of calls about the same lender.  

“It is difficult to say whether the volume of calls is reflective of their market share, or a sign of problems with their lending,” Kelly says. “We can say, anecdotally, that some clients have struggled to access appropriate hardship solutions on their own and have had difficulty engaging with MoneyMe.”

The lender’s automated loan approval process raises particular concerns. “They may be ‘risk rating’ consumers – whereby high interest rates and fees are charged because they know these consumers have less ability to shop around and get better priced credit. The theory is that they charge these higher fees to account for riskier credit,” Kelly says. 

She acknowledges that MoneyMe duly discloses its fees and interest rates on its website and contracts and that its practices are not as problematic as other lenders the organisation has dealt with, but figuring out what the information means in practical terms would be difficult for many customers. 

“Having monthly ongoing fees and establishment fees – or annual fees for credit cards – on top of a higher than usual interest rate is expensive credit,” Kelly says.

Compounding fees and interest means you can be paying interest on an increasingly larger amount of money as fees and interest add to the amount borrowed.  

“Few consumers would have the awareness to review their credit contract and understand the compounding nature of monthly fees and annual fees and how this can increase the effective interest rate, and then use this information to shop around to get better deals,” says Kelly. 

“For many, they may not be able to shop around.” 

The most worrisome issue for Kelly and the FRLC is MoneyMe allegedly retaining access to clients’ bank account details after the initial screen scraping. 

We have had many clients allege they were, at time of financial crisis, notified via push notifications to increase their credit

FRLC director of casework Alexandra Kelly

“Having monthly ongoing fees and establishment fees – or annual fees for credit cards – on top of a higher than usual interest rate is expensive credit,” Kelly says.

Compounding fees and interest means you can be paying interest on an increasingly larger amount of money as fees and interest add to the amount borrowed.  

“Few consumers would have the awareness to review their credit contract and understand the compounding nature of monthly fees and annual fees and how this can increase the effective interest rate, and then use this information to shop around to get better deals,” says Kelly. 

“For many, they may not be able to shop around.” 

The most worrisome issue for Kelly and the FRLC is MoneyMe allegedly retaining access to clients’ bank account details after the initial screen scraping. 

“Most consumers will not be aware they have allowed this access via their contract.It is information that could easily be misused by a lender to decline hardship, or to target advertising for increases to credit limits,” says Kelly. 

“We have had many clients allege they were, at time of financial crisis, notified via push notifications to increase their credit.” 

When asked about this, the MoneyMe spokesperson said the business “does not access bank statements for marketing purposes”.

Read more: Buy now, pay later products like Afterpay finally regulated

‘Superficial’ lending checks

Consumer Action lawyer Cat Miller has assisted many MoneyMe clients who took on loans that were out of sync with their financial circumstances. 

“We’ve had quite a few contacts from people who have had loans with MoneyMe that weren’t affordable in our view,” Miller says. Miller cites the case of a client on a disability support pension who was approved for a MoneyMe business loan, though he didn’t have a business. He used the money to buy a car but couldn’t keep up with the repayments. 

“It had a pretty significant impact on him in terms of his ability to pay his bills and afford food. The loan was not suitable for him and it caused real hardship. He didn’t have a business and the only verification they seemed to do was checking he had an ABN,” Miller says. 

The MoneyMe clients that Consumer Action hears from have generally been unable to access credit from mainstream lenders – something that’s true for clients of other non-bank lenders as well. 

“A lot of people are in financial stress, and when they take out loans that are unaffordable, it just compounds it,” says Miller. 

Miller says MoneyMe’s responsible lending checks seem superficial. 

“They should be asking clients for information about their income and expenses and then taking reasonable steps to verify it. That’s what the legal requirement is,” they say. 

“They should be looking at bank statements and payslips and asking for evidence of what their expenses are. In a lot of cases, I don’t think that’s been done. I think if they were doing more thorough checks, they wouldn’t be able to approve as many loans.”

Responding to these concerns, the MoneyMe spokesperson says the business has “a comprehensive responsible lending framework in place and services a customer segment with strong credit profiles. Each application is reviewed on its individual merits, subject to an affordability assessment.”

Read more: Harvey Norman and Latitude Finance’s appeal shut down in court

Non-bank lenders on notice 

The Australian Securities and Investments Commission (ASIC) has its eye on the non-bank lending sector. 

A report in September this year revealed that ASIC had talked to several non-bank lenders about their hardship practices, including La Trobe Financial, Bluestone Mortgages, Firstmac, Plenti and Volkswagen Financial Services. (ASIC has collected data on MoneyMe but didn’t engage with the business.)

In May this year, ASIC filed legal action against the non-bank home loan manager Resimac for its poor response to hardship cases. Following ASIC’s action, non-bank lenders are set to adopt a new code of conduct for financial hardship practices.

The MoneyMe spokesperson says customers experiencing financial hardship can access support through phone, email, and live chat and that the lender’s hardship approval rates are above the industry average.

Financial Counselling Australia senior advocate Deb Shroot says the experiences of financial counsellors who hear from MoneyMe clients paint a different picture. 

“The biggest concern is that MoneyMe is not very flexible with the hardship provisions they offer to clients having trouble paying their debts. Instead, they have a cookie-cutter approach. They don’t have a dedicated hardship phone line for financial counsellors or clients to call, and it can take a really long time for people to get a response to a request for a hardship plan. MoneyMe’s approach is inadequate and needs addressing,” Shroot says. 

Along with other advocates, Shroot is concerned about the entire sector. 

“These non-bank loans are a very expensive form of credit, and a lot of the non-bank lenders charge hefty fees and interest rates,” she says. 

“The loans are quick and easy, and financial counsellors urge people to be very careful of using them because it’s easy to fall into a debt trap that is very hard to get out of.”

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The $20 million penalty recently handed down by the Federal Court against Captain Cook College comes at the tail end of the outsized VET FEE-HELP loan scandal.��

VET FEE-HELP (VFH)��was launched by the federal government in 2009 to help disadvantaged people earn diplomas in higher level vocational education and training (aka VET). It was later replaced by VET Student Loans in 2017. Courses on offer included diplomas in management, business, early childhood education, salon management and more.��

Sadly, the initiative was met with a level of callousness and greed that could test one’s faith in human nature. Captain Cook College is just one of the many online educators caught bilking the federal government, and making life tougher for people who were already struggling.��

Like the other offenders, the business received tens of millions of taxpayer dollars through the VFH program. As a condition for the funding, Captain Cook College was required to have safeguards built into its enrolment and withdrawal processes to ensure students were engaging with the courses and not taking on debt and ending up empty-handed.

In September 2015, the business deliberately dispensed with these safeguards and continued to charge thousands of people who had signed up but never taken part.��

About 5500 of them racked up debts totalling over $60 million. Nearly all of them never completed any part of an online course, and around 86% of them never even logged in. For years, the business menaced these would-be students with threats about owing thousands to the government.��

Their debts, along with other victims of the VFH loan fiasco, eventually had to be waived by the government.��

“Captain Cook College’s conduct not only cost taxpayers tens of millions of dollars, but it also caused distress to the thousands of consumers enrolled in their courses who, for many years, were told they had significant debts to the government,” says Australian Competition and Consumer Commission (ACCC) Chair, Gina Cass-Gottlieb.��

The court also imposed penalties of $10 million on Captain Cook College’s parent company, Site Group International Limited (Site), and $400,000 on Blake Wills (Site’s former COO).��

Both knew about and were involved in the unconscionable conduct. But there seems to have been little contrition – the business unsuccessfully appealed its initial legal loss in July 2021 all the way to the High Court. It entered into voluntary administration in March this year.

No shortage of dodgy education and training businesses��

The lure of government funding set loose a feeding frenzy among unscrupulous operators. Along with Captain Cook College, the ACCC has brought successful legal action against Unique International College, the Empower Institute, the Australian Institute of Professional Education, Acquire Learning, and the Phoenix Institute of Australia.

One common theme is that these businesses targeted remote Indigenous communities and low socio-economic areas in full knowledge that many who signed up would never complete a course. Charging them anyway was part of the grand plan. Almost all these operations went out of business as a result of legal action.����

It all started to come undone in May 2017 when the ACCC won a $4.5 million against Acquire Learning and Careers for false and misleading conduct in the way it signed up disadvantaged and vulnerable students, which included commissions and bonuses for the telemarketers who reeled in the most. It was the second-largest consumer protection penalty to date, but this was just the beginning.��

The Justice in the case commented that the tactics “resembled those of an unscrupulous fly-by-night operation” rather than a market-leading provider of student recruitment services, which is how the business described itself.��

Preying on disadvantaged communities

A new record was set when the Empower Institute got nailed with a $26.5 million penalty in September 2019 for unconscionably targeting remote Indigenous communities and low socio-economic areas, making various false or misleading claims, and often throwing in a free Google Chromebook as an inducement.

Just about anybody could have the job of convincing people to sign up to courses, which cost up to $15,000. Door-knocking was a standard procedure.

But it didn’t end well for the business. In addition to the penalty, the Empower Institute was ordered to reimburse the federal government more than $56 million.��

Then ACCC chair Rod Sims put it plainly: “Empower misled many vulnerable and disadvantaged consumers who had poor English language literacy or numeracy skills, and others who could not even use a computer and did not have access to the internet.” He called the tactics “appalling”. The court went with the phrase “callous indifference”.��

‘Difficult to imagine worse conduct’��

Next came Unique International College, which was hit with a $4.1 million penalty in October 2019.�� Free laptops (paid for by your tax dollars) were on offer if you came aboard, yet many among Unique’s target demographic didn’t have an internet connection. Door-to-door sales was also part of the marketing strategy.��

Referring to one affected individual, the judge said “This was the exploitation of an obviously very vulnerable person for financial gain. It is difficult to imagine unconscionable conduct which could be worse.”

$153 million for systematic predation��

The Australian Institute of Professional Education (AIPE) took things to the next level in December 2021. Having received over $210 million from the Commonwealth for approximately 16,000 enrolments, the Federal Court applied a $153 million penalty for its unconscionable tactics, which included doling out free laptops and telling people with limited reading and writing skills that the courses were also free, which they weren’t. The victims were each left with debts of around $20,000.������

At the time the case set yet another record for the highest penalty to date imposed under the Australian Consumer Law. The presiding Justice said: “Substantial penalties are called for when a commercial enterprise systematically predates on both a government education support scheme designed to help disadvantaged members of the Australian community, and consequently, upon those consumers.”��

But the record penalty became a paper tiger. Because AIPE had been liquidated, it was never paid.��

Prior to this legal outcome, AIPE had already been ordered to repay approximately $142 million to the Commonwealth in compensation for funding it wasn’t entitled to. It’s not clear how much of this was ever paid during the liquidation process.

Phoenix Institute penalty sets another new record��

In the case of the Phoenix Institute and its marketing arm Community Training Initiatives, the ACCC’s legal action resulted in a $438 million penalty, shattering the previous record. Once again, free laptops were involved, as well as the false promise that the courses were free. In fact, students affected by the misconduct incurred debts of around $37,000 each. In total, debts incurred under the VFH FEE-HELP scheme arranged by the Phoenix Institute exceeded $350 million.��

Phoenix received around $106 million in Commonwealth funding, yet only nine of Phoenix’s approximately 11,000 students ever finished a course. It claimed another $250 million from the government on top of this, but this was stopped short as legal action commenced and Phoenix went into liquidation.��

“This case involved cynical and calculated systemic unconscionable conduct towards disadvantaged individuals, on an industrial scale,” ACCC Chair Gina Cass-Gottlieb said at the time. The Justice in the case called the numerous contraventions of consumer law “morally abhorrent”.��

Across the board, the magnitude of the wrongdoing was breathtaking. In July 2023, the ACCC announced that around $3.4 billion in VFH debt had been re-credited to over 185,000 students since 2016.��

The majority of that came through the VFH Student Redress Measures, which came into effect in January 2019 and ended on 31 December 2023. Invalid debt can still be waived, but it will likely take more effort and persistence than when this program was running.��

What to do if you believe you still have invalid debt��

As of 1 January 2024, a new multi-step process has been in place for people who still have debt they believe should be waived. The onus is on affected people to take the initiative and follow through, but it’s a process worth pursuing to clear your record and make sure any illegitimate debts don’t continue to haunt you.��

If you are experiencing financial hardship, you can call the on 1800 007 007 for free, confidential and independent information and advice. If you or anyone you know needs support, contact Lifeline on 13 11 14 or at��, or Beyond Blue on 1300 224 636 or at��.

The post ACCC swoops on predatory online ‘educators’�� appeared first on ����Vlog.

Having a loan quickly approved so you can buy a used car can seem like a good thing, until the vehicle stops working and you have to keep making payments.��

It’s a widespread problem that’s getting worse, especially for people who are struggling financially. In March this year, the Australian Securities and Investments Commission (ASIC) announced it was launching a review into the used car finance sector, with a focus on regional and remote locations, including First Nations communities.

In particular, ASIC will scrutinise adherence to responsible lending laws by seven lenders as well as look at how they handle defaults, disputes and hardship cases.��

The action follows a number of cases of used car lenders breaching responsible lending laws, including the recent case of a woman named Emma.��

Money was tight in Emma’s world, but buying a new used car was necessary to get to her job which started at 3.45am. Her previous vehicle had become chronically unreliable; public transportation wasn’t an option; and, at around $60 a pop, an Uber was out of the question.��

She paid $16,000 for what looked like a solid automobile at a used car dealer in a Melbourne suburb. This was well beyond her means, but a financial services firm called Money3 agreed to give her a loan.��

It soon became clear that Emma’s new car had serious problems. “I drove it to work the next day and home, and it was fine. And then I drove to work the next day and it overheated,” Emma tells ����Vlog. “I called the car dealer and said I need to bring the car back. And they said, no, you have to deal with National Warranty.”��

This is a separate business that provides extended warranties for cars, tacked on as part of Emma’s purchase. She was told by National Warranty to take the ailing vehicle to one of their approved mechanics, where she paid for several small repairs to the radiator.��

The car continued to overheat, and Emma was seriously distressed.��

“I was crying and sobbing because now I’m paying for the car, I’m paying for insurance and I’m paying to try and get the car fixed. So I’ve run out of funds.”��

At this point Emma’s then-boyfriend came to the rescue and paid his mechanic $2200 to install a new radiator and cooling system. The car continued to overheat.��

Another mechanic Emma consulted told her the car’s head gasket had to be replaced. A new one would cost $3000, but the mechanic said what she really needed was a reconditioned engine for $6000. She didn’t have the money. Deprived of a working vehicle, Emma lost her job.��

She could no longer make her car loan payments, and she started getting emails threatening repossession.��

“I was just trying to manage my mental health because everything was crashing down on top of me,” Emma says.��

Consumer Action Law Centre intervenes

Emma got in touch with the Consumer Action Law Centre (Consumer Action), a Melbourne-based advocacy organisation, where counsellors walked her through her options for resolving the matter. These started with a letter of demand to the car dealer to take the faulty vehicle back. This was met by a howling silence. “Not a phone call, not an email, not anything,” Emma says.

The expert advice and support was a godsend, but acting on her own wasn’t getting her anywhere.��

Consumer Action lawyer Taylah Alanis decided to officially take on the case, which ended up making all the difference. The focus shifted to whether Money3 had properly checked Emma’s suitability for the car loan, a requirement for businesses that hold a financial services license. Alanis did her own evaluation of Emma’s financial circumstances, and it was clear that Money3’s checks were superficial.��

“It looked like a bit of a tick-the-box exercise. They collected documents, but there was no follow-up to verify or ask additional questions or identify any red flags,” Alanis says.����

This is typical of many of the irresponsible lending cases Consumer Action has dealt with.��

“We often see that lenders will obtain all the documents required, such as bank statements and any other outstanding loans, as well as the borrower’s income,” Alanis says. “But there can be very obvious red flags in these statements that show that the prospective client is living paycheck to paycheck. The documents clearly show that the loans are unsuitable, but lenders are just not verifying income and expenses.”��

����Vlog contacted Money3 for comment but didn’t receive a reply.��

ASIC case against Money3

Emma’s case is not an isolated one. Money3 – which is based in Victoria but offers loans across Australia – is currently involved in legal proceedings brought by ASIC, which has charged the business with failing to undergo thorough lending checks in several instances.����

The regulator has alleged that Money3 failed to properly assess whether a number of borrowers – many of them on low incomes or receiving Centrelink payments – could repay the loans they took out for used vehicles, all for the same amount. Many were indigenous Australians.��

“The consumer loans we are concerned with showed the purchase price of $8000 for a second-hand vehicle with additional fees and warranty adding another $3,000,” ASIC deputy chair Sarah Court said when the case was announced in 2023.��

“An $11,000 loan is a substantial sum for a consumer on a low income to repay without having been properly assessed as to whether they could afford to repay it. In some cases the vehicle broke down, leaving the consumer with an unusable car and a loan that they couldn’t afford, compounding the detriment.”��

Closing submissions for the case were heard in March this year, with a judgment expected soon.��

In May last year, former ����Vlog CEO Alan Kirkland – now an ASIC commissioner – gave a speech focusing on lemon cars and used car financing at the annual Consumer Rights Forum.��

Kirkland told the story of a single parent who secured financing on a car with few responsible lending checks. The car soon ground to a halt. The case pointed to a larger story about “far too many consumers who are being sold poor quality vehicles on dodgy credit arrangements – who end up with no car, no way to get around, and ongoing debts”, Kirkland said.

Hotbed of consumer abuse��

Consumer Action’s Taylah Alanis says the used car dealership sector is a hotbed of consumer abuse.

“We are seeing a lot of egregious behavior by traders, so there’s a lot of bad faith around car sales.”��

But exerting your rights under consumer law after buying a lemon car isn’t easy. You generally have to take the case to a state tribunal and present expert reports attesting to the condition of the vehicle. This costs money. And it can take up to two years to even get an initial hearing. Used car dealers appear to be aware of these obstacles.��

“These traders aren’t interested in informal negotiations and providing a refund,” Alanis says.��

Meanwhile, people with undriveable vehicles are stuck with the ongoing car payments, including insurance and registration.��

In Emma’s case, it took around five months for Consumer Acton to convince Money3 to cancel her loan. In the end, her vehicle was carted away via tow truck, and she was reimbursed for loan repayments she’d already made, totalling�� around $4700. She also received additional compensation for non-financial loss.������

ButMoney3 made no apologies. “The reason they settle is to avoid acknowledging any wrongdoing, to avoid admitting that there has been any breach of responsible lending laws,” Alanis says.��

ASIC says it will publish high-level findings from its review in the second half of this year, followed by a more detailed report.��

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To date, a number of Cigno loan models have been banned after the regulator stepped in, including a product that charged the equivalent of 800% annual interest in fees.

At a Senate estimates hearing in November, ASIC deputy chair Sarah Court described how Cigno has continually manoeuvred to stay a step ahead of the regulator.��

“There have effectively been a number of business models. That’s the issue. Each of these business models has provided loans to consumers in a particular way that [perhaps speaking broadly] has been designed in a way … to use loopholes to avoid having to comply with the important consumer credit protections.”��

“The challenge for ASIC is … there are vulnerable consumers significantly impacted. We go to court. The court makes the finding ‘This is a breach of the law’. The company then re-manifests. It says ‘Oh, here’s another business model’. And again [it’s] very slightly designed to be outside of the provisions of the law,” Court says. “We are resolute in our determination to put an end to these business models.”��

Cigno’s long history of dodgy lending

Cigno Australia has been around for many years offering consumer loans. As an unlicensed and unregulated lender, Cigno couldn’t charge interest, but the company has more than made up for that with high fees.��

The company is headquartered on the Gold Coast in Queensland and is run by former Super Rugby player Mark Swanepoel.��

Cigno Australia has been in ASIC’s sights for a number of years, and has been the focus of several court cases brought by the regulator, one of which Cigno won. But in May 2024, in the most recent case to go through the courts, the Federal Court ruled that Cigno had engaged in credit activity without a licence and charged fees that exceeded the cap on payday loans.

“We took this action because we were concerned that the Cigno Australia and [partner company] BSF Solutions ‘No Upfront Charge Loan Model’ provided short-term loans totalling over $34 million and charged over $70 million in fees to more than 100,000 consumers between July 2022 and December 2022,” deputy chair Sarah Court said at the time of the judgement.��

ASIC is seeking a court-ordered injunction that would prevent Mark Swanepoel and his business partner Brenton James Harrison from being allowed to carry out any business engaged with credit activity into the future. The court has yet to rule on this request or any other penalties.��

Cigno Australia’s social media accounts appear to have gone inactive, with the last Facebook post occurring in 2023. However, ����Vlog has seen evidence of the company still sending emails to former clients.��

While Cigno has appealed the Federal Court ruling against it, ����Vlog can reveal Mark Swanepoel’s brother Ryan Swanepoel, who was not the subject of the Federal Court action, has set up a new business that is using Cigno’s email domain to collect new clients.��

New lender Quickle using Cigno email domain��

In July 2024, Queensland resident Rachel got an email from Cigno informing her of the court’s ruling against it. “The Court has made orders that prohibit Cigno Australia and BSF Solutions from collecting any further fees, charges or other amounts from you,” the email read.��

She was initially relieved, thinking that the company who had provided her with multiple high-fee loans since 2020 was gone.��

“I lived a pretty high flying life until I ran out of money and then I was just borrowing left, right and centre,” says Rachel. “Cigno was terribly easy, so for me, it was a bit of a trap, for sure.”��

“I just thought finally, as I don’t want to ever have anything to do with them again. It’s terrible to think that they just have been able to continue for so long,” she says.��

However, in August 2024, she received another email asking if she needed help to “break free from this cycle” of�� “skyrocketing bills” and “endless price hikes”. The email said it was from Cigno, and it came from the company’s domain name, but a hyperlink in the email went to the page of another company called Quickle.��

Quickle’s slick website offers Australians who are “short on cash” access to up to $75,000 through its network of loan providers. The company says it doesn’t charge people any fees to act as a go-between between them and the loan provider, but may receive an intermediary fee from the provider themselves.��

����Vlog has not been able to obtain documents detailing Quickle’s loan model, and the company did not respond to requests for more information.��

����Vlog is not suggesting that Quickle or Ryan Swanepoel are engaging in the illegal conduct that was the subject of the recent Federal Court ruling.��

However, Rachel says she is outraged this new entity emailed her using a Cigno email address and a Cigno email footer, and then linked to Quickle’s website.��

“In this financial climate, when people are struggling, I’m appalled that they don’t seem to care,” she says.

Who is behind Quickle?��

Cigno Loans was once a trading entity of Cigno Australia, but its website now says it is a business name of a company called FTA Data Solutions. Quickle’s website also says it is a business name of FTA Data Solutions.��

The director and secretary of FTA Data Solutions is listed as Ryan Swanepoel. Unlike the previous version of Cigno, FTA has been authorised by a credit licensee, Finance & Loans, the director of which is also Ryan Swanepoel.

A search of ASIC documents finds that FTA Data Solutions was first registered in August 2023. Its registered address is a co-working space on the Gold Coast.��

The contact address for the company is listed as the same Gold Coast address as another two companies of which Ryan is the sole director, Swan Management Services Pty Ltd and Swan Group Holdings Pty Ltd.��

Alongside Ryan as director, both Swan Management Services and Swan Group Holdings have listed Mark Swanepoel’s business partner Brenton James Harrison as their company secretary.��

Under questioning at the Senate estimates hearing in November 2024, ASIC executive director Chris Savundra shared the regulator’s awareness of FTA Data Solutions.��

“ASIC is aware of a new credit model being operated through the website Cignoloans.com.au, which appears to be operated by a credit licensee Finance and Loans Proprietary Limited. Its credit representative is FTA Data Solutions Proprietary Limited … We are currently considering that model and its compliance with the National Consumer Credit Protection Act and the ASIC Act,” he said.��

����Vlog sent questions to Cigno Australia and attempted to reach Quickle, but neither business responded.��

ASIC’s whack-a-mole with predatory lending models

The Consumer Action Law Centre (Consumer Action) in Melbourne has been helping clients of Cigno’s challenge their unaffordable and at times, as the Federal Court has found, illegal debts for years. Consumer Action’s director of policy and campaigns Tania Clarke says the number of calls they have received over their support lines relating to Cigno places the company among the most “predatory fringe lenders” on the market.��

Clarke is concerned to hear of a company looking to pick up new clients with Cigno’s emailing system.

Tom Abourizk, head of policy at ����Vlog, says Cigno has made a “mockery” of Australia’s credit laws for years.��

“Over the years, ASIC has used a range of enforcement powers in attempting to stop Cigno in its various forms, but every win has just led to another reincarnation using a slightly different legal structure or company,” he says.��

“The Cigno saga demonstrates that there are too many loopholes in our credit and corporation laws for bad actors to exploit. The complex loopholes in our credit laws need to be closed, and personal liability should be easier to impose.”��

Do you know more about Quickle? Contact ����Vlog Investigative Journalist Jarni Blakkarly at jblakkarly@choice.com.au

The post ASIC aims to put an end to Cigno as loan provider’s legacy lives on appeared first on ����Vlog.

The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 comes after years of campaigns, investigations and advocacy by ����Vlog and other consumer groups to close the loopholes that allowed BNPL to operate outside of the national credit laws.��

“The new laws will greatly reduce the risk of people being signed up to unaffordable BNPL loans that leave them worse off. It also ensures customers can take disputes with BNPL providers to the financial complaints body and have their complaint fairly heard,” says Ashley de Silva, ����Vlog CEO.��

“Consumer groups have been calling for regulation of buy now, pay later for years. We congratulate the government on passing these very important laws that will help make BNPL loans safer and fairer.”��

While passing the legislation, Financial Services Minister Stephen Jones said the reforms would protect Australians from falling into debt spirals.��

“These new laws strike the right balance between giving Australians access to innovative products, and ensuring they are protected from these products’ potential harm,” he said.��

What’s in the bill��

The new laws will require all BNPL providers to hold an Australian Credit Licence and comply with the National Consumer Credit Protection Act 2009.��

That includes the obligation for providers to be members of the Australian Financial Complaints Authority, which provides an independent dispute resolution mechanism for financial complaints.

Advocates didn’t get everything they wanted in the reforms, however.��

For example, BNPL providers will have to ask people about their expenses and income to assess whether they can afford the loan, but they won’t be required to verify that information.��

A long campaign��

����Vlog has been writing about, investigating, and campaigning and advocating on the issue of the unregulated BNPL industry and the loopholes exploited in the legislation since 2021.��

We gave BNPL provider Humm a Shonky Award in 2021 for selling customers into up to $30,000 of debt without properly assessing their ability to repay it.

In 2022 we brought together a global alliance of consumer groups from nine different countries to call for urgent action to regulate the BNPL sector.

Back home, 22 organisations formed the Close Lending Loopholes Coalition and over 23,500 of you joined the campaign in some form.��

����Vlog has consistently joined forces with a wide range of consumer organisations and financial counsellors to express concerns about the way vulnerable consumers were falling into BNPL debts and the lack of options, redress and regulation to help when they did.��

Domenique Meyrick, Co-CEO of Financial Counselling Australia, welcomed the legislation, but said concerns remain for small-amount BNPL accounts.��

“Financial counsellors see the harm BNPL products can cause and these new laws will go a long way to protect consumers from getting into unnecessary debt,” she says.��

“While we welcome this change, we are still concerned about what this will mean for accounts under two thousand dollars. Many people have multiple, small amount accounts and these are getting some into debt spirals.”

Stephanie Tonkin, CEO of Consumer Action Law Centre, says the proof about whether these laws are a success will come in the months and years ahead.��

“Regulating BNPL products couldn’t be more important in a cost-of-living crisis. We observe BNPL being used to afford essentials like food, and easy access to multiple BNPL accounts has intensified the ‘money juggle’ for the many families that we help,” she says.��

“There are compromises in the laws, so we will be monitoring the impacts on consumers to understand how effective these new guardrails will be in stopping the people we help falling into unaffordable debt spirals.”��

The post Buy now, pay later products like Afterpay finally regulated appeared first on ����Vlog.

The watch was pawned at a monthly interest rate of 40%. That’s equal to a 480% annual interest rate – 10 times higher than the 48% limit set out in the Consumer Credit (Victoria) Act 1995.

When George went to pay off his loan and get his watch back, the store was closed. The business had been operating without a licence and had suddenly shut, with all its customers’ goods still inside. George was going to give the watch to his son as a 21st birthday present.

George says he isn’t surprised that his pawnbroking experience turned sour. He believes the industry should be regulated to stop people like him being ripped off.

“If it was the politicians’ goods that were in there all hell would break loose,” he says.

Pawnbroking is under regulated and underreported

The National Consumer Credit Protection Act 2009 says the code “does not apply to the provision of credit on the security of pawned or pledged goods by a pawnbroker in the ordinary course of a pawnbroker’s business”.��

Effectively, that means that pawnbrokers are largely exempt from the Act’s protections, and are instead primarily governed by the states.

This is an “anomaly”, according to Dr Lucinda O’Brien, a researcher at The University of Melbourne’s Centre for Commercial Law. She says it is odd that “this industry is still regulated at the state level when all other similar forms of short-term credit are regulated at the federal level”.

But O’Brien says a lack of information and data on pawnbroking in Australia makes it hard to say what should be done and what needs to change.��

What don’t we know?

The US and the UK both have industry bodies that govern the pawnbroking industry (also known as the pawn lending industry) and there is public data in both jurisdictions that shows the size of the industries and records how they change over time.��

We don’t have those insights here in Australia, but given the cost-of-living crisis and the increasing financial stress people are under, it is reasonable to wonder if the use of pawnbrokers is on the rise in Australia. O’Brien says that in the US and the UK, pawn lending has become more prevalent.

“We know that for a fact, and I think it would be highly likely that if we collected similar data here in Australia, it would show the same thing,” she says.��

But without data, researchers can’t say for sure. What we can look at though is the annual reports from Australia’s largest pawn lending business. Over the past year, revenues at Cash Converters increased by 26%.��

“It makes sense that this is a response to the increasingly extreme levels of hardship that we’ve seen in this country in the last year or so,” says O’Brien.

Cash Converters did not reply to our request for comment.

O’Brien recently co-authored a study on pawnbroking in Australia that called for the government to start gathering and publishing data on what she describes as an “opaque industry”.

“At the moment, we’re forced to go back to reports by consumer advocates published in 1997 and 2000.”

First Nations consumers feeling the pain

A recent report from the Consumer Action Law Centre, Money Yarns, Stronger Futures, found First Nations people are increasingly turning to the “friendly people” at their local pawnbrokers for quick loans against their valued possessions.

The report’s author, Shelly Hartle, says pawnbrokers can have good reputations in local communities. “They’re locals and they’re friendly, and they’re well trained in customer service,” she says.

“They’re the people who will give the money when no one else will, so they’re seen as ‘my mates’ because the buy now, pay later [BNPL] mob or the bank said no.”

The Consumer Action policy officer says that the people she spoke to reported good experiences, such as being offered 12-month extensions on their pawn loans. “That sounds really positive and I’m sure it feels really positive to the individual. When you look at it in terms of credit, that’s just keeping them in the debt cycle and never getting out.”

One person Hartle spoke to had pawned their iPad for less than $500. They made a monthly interest payment of $90 over the next two years. In total, they would have paid between two and four times the value of the original loan in interest alone.

“When a person is in that paycheck-to-paycheck lifestyle, that ability to see the big picture is reduced,” says Hartle.

Work needs to be done with community to get the best outcome

Like Melbourne University’s Dr O’Brien, Hartle believes we need to understand more about the market before any reform takes place.��

“How do we find the balance of protecting consumers and making this unregulated form of credit safer … whilst also ensuring people aren’t caused additional harm because they no longer have access to ready cash?”

Hartle says that more work needs to be done to understand who’s accessing the market, and why. Then work can be done with affected communities to develop the reform that is needed.

“Any changes to legislation or reform for First Nations people, it has to be done with First Nations people,” she says.��

Regulation of BNPL may drive more people to pawnbrokers

The government has introduced new legislation that would regulate BNPL providers like Afterpay, Zip and Humm. ����Vlog has welcomed intervention in this space, but remains cautious about some of the reform’s shortcomings.

One risk is that the regulation sends consumers to other, less regulated, forms of credit – like pawnbroking.��

In an August 2022 investor presentation Cash Converters said, “Regulation risk for unregulated lending sectors (e.g. BNPL) presents opportunities”. In other words, they think they will benefit from the regulation of BNPL products.

“It’s an ongoing challenge for regulators and it’s something that we’ve seen again and again,” says��O’Brien.��

“When a new form of regulation is brought in or regulations are amended, the industry evolves.

“There is a risk if you tighten up regulation in one part of the industry, it’s going to push the most vulnerable people into another area of the industry.”

This can be particularly risky with pawn lending, O’Brien says, because there is overlap in consumers using BNPL products, payday loans, and pawn lending. She adds that vulnerable consumers who are already familiar with pawn lending may increase their reliance on it, while reducing their usage of more regulated services.

So, what can we do?

To help in the short-term, O’Brien suggests users of pawn loans could be given access to the Australian Financial Complaints Authority (AFCA). Currently, pawn users have to go to court if something goes wrong. O’Brien thinks that can be intimidating for lots of consumers, and is not viable for what can be quite a small amount of money.

She says being able to access AFCA “would give them access to some form of redress if the pawn lender they were dealing with did the wrong thing”.

Hartle also says a public inquiry is needed. Her report recommended an independent public inquiry “to examine and assess the current size, operation, business models, conduct and consumer outcomes and the impact that the industry is having, specifically, on the lives of First Nations people and communities”.

Pawnbroking can have a “devastating impact”

Pawnbroking is a uniquely personal form of credit. While the size of the loan might not be huge, people pawn items that can have enormous personal value: guitars, jewellery, watches.����

“If you’re a musician and you pawn your instrument, it might not have a high resale value, but without it, you can’t do your job, you can’t do the thing that you enjoy doing most in your spare time,” says O’Brien.

“It could have a devastating impact on a person, well beyond the financial impact.”

The pawnbroker George accessed has since re-registered and resumed trading. But George hasn’t got his watch back. He says, “I used to love the bloody thing. I haven’t been able to wear it for a year. I haven’t even been able to see it.”

He says he won’t use pawnbroking again. “Honestly, I wouldn’t go near one ever again. Even if I was struggling that bad, I just, I’d hold off.”

The post In the murky world of pawnbroking, the harms are well hidden appeared first on ����Vlog.

Since Libby lost her son Ben in 2020, she says her life has become much more ritualistic.

“It’s been four years and not a day goes by that I don’t just think about him. I’ve got little shrines to him around the house and visit his plot every week. His hat is placed on top of his pillow and I kiss it every night before I go to bed. These rituals bring me comfort and help me feel close to him,” she says. 

Ben, she says, was the life of the party. He loved cars and bikes and was extremely loyal to his friends. Libby says despite their close relationship, it was only after he died by suicide and she sought copies of his bank statements that she became aware of the financial trouble he was in. 

“There were about five or six loans from payday lenders and then there were a lot of Afterpay [loans] as well,” she says.  

“If he had any issues [with money] he could have come to me, and I know he knew that, but he was an extremely proud young man who just got himself into this debt trap and couldn’t get out of it,” Libby says. 

Now Libby is doing all she can to make sure fewer young people find themselves in the same kind of debt trap her son Ben did. 

Fighting for change 

Libby requested detailed documents from the payday loan providers about Ben’s accounts, but some of these requests were initially denied. It wasn’t until a coroner’s report found that Ben’s debts appeared to play a role in his death that she was able to get a fuller picture of his financial troubles. 

“I went through two years of his statements, it took nights and nights. I watched his life spiral out of control over two years in those pages. I started to see a pattern emerge where he had loans, and he wouldn’t miss a payment because when his money got low, he would just request another loan and they would just approve it, every time,” she says. 

Libby reached out to the Consumer Action Law Centre (CALC) in Melbourne who at the time were helping with the Stop The Debt Trap campaign to advocate for reforms to payday lending laws. 

She spoke to various parliamentarians about Ben’s story and the need for change and eventually, at the end of 2022, those reforms passed parliament. Around the same time, she also took one of the payday lenders to the Australian Financial Complaints Authority (AFCA) alleging irresponsible lending to her son. 

“I said I don’t want money [as compensation], I want an acknowledgement that this is irresponsible lending. I wanted the payday lender to acknowledge that they needed to change what they were doing or this could happen to another young vulnerable person. Providing more loans does not solve debt, it just contributes to it,” she says. 

AFCA would later say they couldn’t proceed with the case as more than two years had elapsed since the loan closed. 

Educating young people 

Claire Tacon, assistant director of financial counselling at CALC, says cases like Ben’s are common among young men who often take out multiple “predatory” payday loans and other credit products and find themselves in difficulty. 

She says the number of young people ringing the National Debt Helpline for financial assistance is very low, though these numbers are higher on the text-based chat functions available online. 

“We need to reach out to young people where they are, we find the online chat is a lot less scary and a lot more familiar for young people who might not want to talk on the phone,” Tacon says. 

As well as advocating to Parliament, Libby has teamed up with the to make a series of easy-to-consume financial help resources available on their , which encourages engagement and help-seeking around a range of topics. 

buy now, pay later products, debt traps, credit cards, scams, tax and superannuation.

Libby says she hopes to get resources in the hands of as many young people as possible and says that if she can make a difference to even one young person’s life it will be a success. 

“There are so many hidden costs, traps and admin fees in these loan products. Ben didn’t miss payments, but he still got caught in this debt trap,” she says. 

“Would it have changed my son’s life if he had this information? I would like to think yes.” 

The post After her son’s death, this mum wants to help young people seek financial help appeared first on ����Vlog.

Putting some of the most predatory lending models on record out of business has been a long-term undertaking for the Australians Securities and Investments Commission (ASIC).

The corporate regulator has been launching court cases against payday lender Cigno Australia and subsidiary BHF Solutions since at least 2020, when Cigno was approving extremely costly loans for about 1000 customers a day.

With each new regulatory intervention from ASIC came a countermove from Cigno to get around it, often by redesigning the loan model to fall just within the bounds of the complicated payday lending rules.��

This unlicensed and unregulated company is well-acquainted with the loopholes in our credit laws that allow its exemption from the National Credit Act. As it exploited these, its customer base grew.��

‘No upfront charge’ model the latest to fall��

Though Cigno and its director Mark Swanepoel have proven a pugnacious litigant, ASIC has notched a number of wins. A Cigno loan called the ‘continuing credit’ model was banned following a court decision in July 2023, freeing customers from further payments.��

An earlier product called the ‘short-term credit’ model was banned for loans issued between 14 September 2019 and 14 March 2021, and after 15 July 2022.��

Most recently, in late May this year, ASIC won a court case that permanently shut down a Cigno product called the No Upfront Charge Loan Model.��

This latest variation involved a loan agreement between the borrower and the Cigno-affiliated BSF Solutions (playing a similar role as BHF Solutions), and a separate account keeping agreement between the borrower and Cigno. Under the account-keeping agreement, Cigno charged sky high account keeping and default fees.��

A loan of $250 to be repaid in 73 days, for example, would attract a minimum of $290 in fees, according to an analysis by the Consumer Action Law Centre (Consumer Action). Any default on a fee payment would cost the borrower $87 each time it happened.��

Excessive fees overstep credit act exemption

The Federal Court ruled that these fees went beyond what payday lenders are allowed to charge.��

By exceeding the cap, Cigno overstepped its exemption from the National Credit Act, which mainstream lenders such as banks have to follow. Cigno was thereby providing credit without a licence, the court found.��

This latest legal win means that around 150,000 of the people who signed up to the ‘no upfront charge’ loan between July 2022 and December 2022 no longer have to make payments. A disproportionate number of these Cigno customers are First Nations Australians.

No oversight on payment collection

Cigno customers no longer have to make payments on the other banned loans either, but there’s a catch.��

Since it’s unlicensed, the company doesn’t have to report on the status of outstanding loans to ASIC, meaning there’s no oversight on whether Cigno is still demanding payment on banned loans.��

ASIC deputy chair Sarah Court acknowledged the long battle the regulator has waged against Cigno and its affiliates following the win in May, saying ASIC “has taken enforcement action over many years to respond to various business models” connected to the companies.��

$34 million provided in credit, $70 million received in fees��

With payday loans, also called short-term credit, the business lends you the money in short order without having to check on your financial situation.��

Licensed creditors such as banks, on the other hand, have to make sure you’re in a position to pay the money back and provide hardship arrangements if you can’t.��

Because they’re unlicensed, payday lenders are not allowed to charge interest. They more than make up for this with high fees. For borrowers, these amount to the same thing.��

In the case of the ‘continuing credit’ model, some people paid fees that would have equated to 800% per annum. For licensed lenders, annual interest rates are generally capped at 48% including fees and any other charges.��

In the case of the ‘no upfront charge’ model, the numbers make the high cost of Cigno credit staggeringly clear. During the sixth months in 2022 that were the focus of the ASIC investigation, Cigno and BSF Solutions provided $34 million in credit. They then charged fees of $70 million on these loans, or more than double the total amount loaned.��

In some cases, customers were charged six times what they borrowed, an equivalent annual interest rate of 600%.����

Consumer group will keep the pressure on

Consumer Action has made stopping Cigno Australia and BSF Solutions a priority. The organisation has heard from many Cigno customers whose need for quick cash has landed them in a deep financial hole.

Last year, the organisation designed to help Cigno loan customers break free from making further payments.��

Following the ASIC win in May, Consumer Action CEO Stephanie Tonkin said “we consistently hear from the people harmed by these companies’ activities, and the impacts – like families forced to skip on meals to pay eye-boggling fees – are shocking”.

“I honestly hope these businesses are finally shut down for good, and any future plans to skirt regulation are stopped.”

Cigno and BSF Solutions attempted to put a hold on the enforcement of the recent Federal Court ruling, which was dismissed. A hearing is scheduled for late June to consider further actions against the companies, including financial penalties.��

The post Another predatory Cigno loan model banned for good appeared first on ����Vlog.

The corporate regulator has slapped a stop order on a retailer that pushes unaffordable purchases on First Nations consumers who rely on Centrelink payments.��

The Urban Rampage retail brand, which is owned by Coral Coast Distributors (CCD), has stores in 10 remote and regional locations in the Northern Territory, Western Australia and Queensland.��

They trade in clothes, as well as hardware and homeware goods, and their customers are often First Nations consumers who pay through the Centrepay deductions system.��

Companies can apply to join Centrepay and, if approved, can authorise automatic payments from Centrelink clients.��

Advocates have long raised concerns about the Centrepay system being hijacked by questionable companies selling non-essential goods.��

The system has also been exploited by businesses cynically focusing on genuine needs, such as the failed funeral insurance provider, the Aboriginal Community Benefits Fund (ACBF) also known as Youpla.

Stop order��

ASIC’s interim stop order prevented Urban Rampage from accessing customers through Centrepay for 21 days, giving the retailer time to negotiate before a final determination is made. In April, ASIC’s stop order was made permanent.

ASIC deputy chair Sarah Court says the regulator took action after receiving a number of complaints from financial counsellors about Urban Rampage targeting customers in financial hardship.����

“Urban Rampage describes its target market as consumers who predominantly reside in remote Aboriginal communities, are low-income recipients of Centrelink payments, do not have immediate funds to purchase household goods and do not otherwise have access to credit,” she says.��

“ASIC is concerned that CCD’s Target Market Determination did not adequately detail eligibility criteria, including how the financial capacity of consumers is to be determined.”��

A Target Market Determination is a document detailing who the intended market of a product is, including financial situation and their likely needs.��

ASIC says deficiencies in Urban Rampage’s documentation may reflect an inability to ensure their credit facilities are suited to the needs of their customers.��

Long-running complaints��

Wangkumara and Barkandji woman Lynda Edwards from Financial Counselling Australia (FCA) says the organisation has seen countless examples of remote consumers being taken advantage of by “scandalous” operators like Urban Rampage.��

“Advocates are very clear, we need bad businesses like this off Centrepay permanently. We need to look at what has happened to Centrepay and why it is being allowed for things that are not necessities,” she says.��

“These are really bad businesses targeting First Nations people. The government has got to start doing something to protect Centrelink recipients.”��

Boandik woman Bettina Cooper, a financial counsellor and strategy lead at Mob Strong Debt Help, says the advocacy group welcomes ASIC’s intervention.��

“ASIC’s intervention is a positive step to stop businesses’ exploitative practices, especially those harming our most vulnerable First Nations brothers and sisters on Centrelink in remote communities,” she says.��

“Having seen the harm done to First Nations consumers through our consumer advocate allies, we support ASIC’s stop orders and will wait with interest to see what happens next. We know of consumers with hundreds of dollars in credit at Urban Rampage stores, but not enough money in their accounts to feed their families.”��

Cooper adds that businesses’ access to Centrepay is a privilege and not a right. She calls for the government to take swift action against businesses accessing payment from Centrepay that exploit consumers.

“Some businesses see Centrepay as a guaranteed way to make money, without considering if the consumer can afford their product or service,” Cooper says.��

In a statement to ����Vlog sent following the publication of this article, the retailer said they had never failed a Centrepay audit since joining the program in 2016.

“Centrepay has been around since 1999 and there have been instances of unscrupulous operators contravening Centrepay’s business terms. We are not one of those operators,” an Urban Rampage spokesperson says.

“We have always strived to ensure we are on top of all compliance and regulatory matters and even engaged cultural consultants to help us improve our services in Indigenous communities.”

The post Outback retailer stopped from causing financial harm to First Nations consumers appeared first on ����Vlog.