ASIC has released a report outlining enforcement actions in line with its priorities taken during the October to December quarter 2022 (REP 753).

ASIC says its enforcement priorities fall into three categories: protecting consumers; responding to
emerging issues; and maintaining market integrity. The priorities include poor design, pricing and
distribution of financial products, governance and directors’ duties failures, misconduct in the
superannuation and insurance sectors, misconduct involving crypto-assets and investment scams,
and market manipulation.

ASIC has announced the following recent actions:

ASIC places interim stop order on credit for rent product

ASIC has announced it has issued an interim stop order on One Card Credit Pty Ltd’s (OCC) Scorebuilder and Safetynet loan product because of deficiencies in the target market determination (TMD).

ASIC was particularly concerned that the loan targets consumers looking to use credit to pay their rent. ASIC’s concern was supported by missed repayment information showing that a significant proportion of consumers who had drawn down on the product had missed at least one repayment.

While the TMD explains that particular consumers are excluded from the loan, including consumers who cannot afford the minimum repayments without hardship, are financially vulnerable or are living in public housing, ASIC does not consider that the distribution conditions are sufficient to identify and exclude these consumers.

The interim order stops OCC from dealing in its loan. The order is valid for 21 days unless revoked earlier.

Misleading repayment calculator infringement notices

ASIC has announced it has issued two infringement notices under section 12GX of the Australian Securities and Investments Commission Act 2001(Cth) for a total of $26,640 to credit provider Jacaranda Finance Pty Ltd which Jacaranda has paid without an admission of guilt or liability.

ASIC was concerned that a repayment estimate calculator on Jacaranda’s website may have been false or misleading because:

• the annual percentage rate used in the calculator was significantly less than the rate that applied to most consumers who entered a credit contract with Jacaranda; and
• the calculator was advertising loans at an annual percentage rate that Jacaranda did not offer.

Jacaranda removed the repayment calculator from its website in September 2022 following the commencement of ASIC’s investigation.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.