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The Federal Court ruled that the south-west Sydney-based Diamond Wheels Pty Ltd, trading as Lansvale Motor Group, and Keo Automotive Pty Ltd provided car loans to consumers without a credit licence and charged consumers unlawful and excessive interest charges.
It was also found that Ken Keomanivong, a director of Keo Automotive and former director of Diamond Wheels, was liable for his involvement in the conduct of those companies, as he played a central role in setting up the unlawful loan businesses and arranging the hundreds of loans the companies provided.
Keomanivong was a director of Diamond Wheels from March 1995 to July 2024, and has been a director of Keo Automotive since August 2019.
The Australian Securities and Investments Commission, which initially brought the proceedings, alleged that these contraventions stripped consumers of vital protections under credit laws. In many instances, ASIC alleged that this led to interest charges nearly twice the legal limit.
Diamond Wheels, Keo Automotive and Mr Keomanivong have admitted the contraventions, following 19 months of litigation.
Consumer protections 'not optional'
Now trading as Lansvale Motor Group, Diamond Wheels has been operating as a new and used car dealership since around 1995, and is one of Australia’s largest family-owned motor dealerships.
Although neither Diamond Wheels nor Keo Automotive have ever held an Australian Credit Licence, nor have they been authorised to engage in credit activities, the companies provided car loans to consumers at different times between 2014 and 2024.
ASIC’s case against Diamond Wheels relates to its conduct from September 2018.
Between then and December 2019, the company acted as the credit provider under 205 credit contracts and received almost 6,000 unlawful payments under those contracts.
Following this, from January 2020 to August 2023, ASIC said that Keo Automotive provided credit to consumers under 119 loan contracts. Between December 2019 and April 2024, it received almost 18,000 unlawful payments under those contracts, as well as under many of the contracts entered into by Diamond Wheels.
Diamond Wheels and Keo Automotive engaged in these credit activities without holding an Australian Credit Licence authorising them to do so.
ASIC Chair Sarah Court said: “Consumer protections under the credit laws are not optional. This is the first civil proceeding ASIC has commenced to address unlicensed credit activities by a car dealership, and it sends a clear warning: dealers that offer finance without the proper licence can expect ASIC scrutiny and enforcement action.”
A further hearing on penalty and other relief is scheduled for 20 August 2026.
Predatory lending under the spotlight
The ongoing case against Diamond Wheels and Keo Automotive forms part of a commitment made by ASIC to stamp out predatory lending in Australia.
A review by ASIC in March 2025 found that some lenders had entered into unsuitable contracts or had failed to identify an appropriate target market for their products and distribution strategies.
Another case that ASIC has been pursuing is against Money3 Loans, which the Federal Court has ordered to pay $1.55 million in penalties.
The court found that the specialist lender had breached responsible lending obligations on five loans written between May 2019 and February 2021.
[Related: Fraud headlines ‘paint industry with one brush’, brokers warn]
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