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In an address at the Australian Finance Industry Association (AFIA) Risk Summit, Kirkland provided an overview of the work ASIC is doing to protect consumers who use credit.
Predatory lending was a key focus of the address. Cost-of-living pressures have made borrowers more susceptible to falling victim to dodgy practices.
The commission’s 2025 plan explicitly outlines predatory lending and includes means of mitigating issues.
A review in March found that there were some lenders that were entering into unsuitable contracts. Others were found to have failed to identify an appropriate target market and distribute their products accordingly.
Some lenders that ASIC is currently taking legal action against include:
- Oak Capital for allegedly engaging in unconscionable conduct designed to avoid the National Credit Code.
- Diamond Wheels, Keo Automotive, and a former director for allegedly providing unlicensed car loans to consumers, many of whom paid an excessive interest rate.
- Money3 Loans for allegedly failing to consider the financial circumstances of vulnerable consumers, including First Nations people, when providing car finance, resulting in customers entering into highly unsuitable loans.
- Swoosh Finance for alleged breaches of responsible lending and design and distribution obligations.
Other lenders were found guilty of breaching responsibilities, such as Green County, Rent4Keeps, and Harvey Norman.
ASIC also mentioned the RAMS case for which it alleges systematic misconduct.
Brokers in the spotlight
Following the crackdown on predatory lending, ASIC has set its sights on brokers who play an integral part in providing credit to consumers.
According to Kirkland, while the industry is largely compliant, there are still a few outliers that spoil it for the vast majority of reputable brokers.
“While this sector attracts a relatively low level of consumer complaints, we are conscious that misconduct by brokers will not always be obvious to their customers,” said Kirkland.
“And our track record of regulatory action indicates that the sector is not immune from misconduct.”
ASIC is continuing to monitor the actions of brokers and is collaborating with aggregators to “gather data on patterns of lending involving brokers.”
Between July 2019 and December 2024, ASIC cancelled the credit licences of 22 brokers, banned 14 from engaging in credit activities, and imposed criminal sentences on 11 individuals or companies.
[Related: Are ‘predatory’ lenders giving the private credit market a bad name?]
