ASIC has warned credit score suppliers and debt administration companies that it’s going to spend the approaching months taking robust, focused motion towards predatory lending, high-cost credit score and misconduct affectiing shoppers in monetary problem.
The warning comes after a just lately launched enforcement and regulatory replace highlighted over $30 million in civil penalties secured by ASIC, in addition to the graduation and finalisation of court docket proceedings towards credit score suppliers within the first quarter of 2023.
ASIC’s enforcement actions for the quarter embrace launching its first court docket proceedings in relation to alleged greenwashing conduct from Mercer Superannuation (Australia) Restricted.
ASIC alleged Mercer was making deceptive statements in regards to the sustainable nature and traits of a few of its superannuation funding choices. The proceedings comply with the issuing of over $140,000 in infringement notices prior to now six months in response to issues about alleged greenwashing.
The monetary companies regulator was additionally profitable in its case towards ANZ Banking Group for breaching the Nationwide Credit score Act. This resulted in ANZ receiving a $10m penalty over its House Mortgage Introducer Program.
ASIC additionally secured a $15m penalty towards GetSwift – the biggest penalty levied to this point towards an organization for breaching steady disclosure obligations – and addressed disclosure and governance failures with court docket proceedings towards TerraCom and the previous Freedom Meals Group.
ASIC deputy chair Sarah Courtroom (pictured above) stated that ASIC was persevering with to sharpen its give attention to credit score suppliers and debt administration companies, together with unlicensed or “fringe” entities.
“Credit score suppliers and debt administration companies that look to make the most of weak shoppers are in our sights and we anticipate additional motion within the coming months towards operators on this space,” Courtroom stated.
“ASIC’s enforcement motion towards predatory lending is just not restricted to court docket motion. We are going to proceed to make use of our full suite of powers to guard shoppers seeking to entry credit score.”
Courtroom stated this might embrace a cease order for breaching the monetary product design and distribution necessities, or a warning to the corporate straight by way of monitoring and surveillance packages.
“Within the first quarter of 2023, ClearLoans was ordered to pay greater than $6m in penalties for failing to behave effectively, actually and pretty when coping with debtors in monetary hardship in addition to different misconduct,” she stated.
“ASIC additionally took motion towards credit score supplier Inexperienced County and issued cease orders on a number of credit score merchandise, together with a credit score for lease product.’
ASIC stated its case towards TerraCom marked the primary time the regulator had taken motion alleging breaches of whistleblower safety legal guidelines.
“The enforcement outcomes of the final quarter mirror that we are going to not hesitate to take swift motion the place we see misconduct that harms shoppers or undermines market integrity. The place acceptable, we may also check new areas of the legislation, as we’re doing with our greenwashing and whistleblower circumstances,” stated Courtroom.
ASIC stated that, along with enforcement motion, it was offering steering to the business to assist firms higher adjust to their obligations and ship higher outcomes for shoppers.
In the meantime, ASIC printed its Indigenous Monetary Companies Framework in February to help constructive monetary outcomes for First Nations folks.
ASIC additionally offered a ultimate replace on compensation for shoppers who suffered loss or detriment due to charges for no service misconduct or non-compliant recommendation. ASIC stated six of Australia’s largest banks and monetary establishments paid or provided a complete of over $4.7bn to affected prospects over the eight years that ASIC monitored the remediation packages.