ASIC has announced it has commenced civil penalty proceedings in the Federal Court of Australia against a provider of ‘book up’. Book up is a type of credit that allows a customer to buy goods now and pay for them later and is commonly used in Indigenous communities.

The provider runs a general store in remote South Australia, and sells a range of goods to the public including groceries, fuel and second hand motor vehicles. The majority of its customers are Indigenous residents. It does not hold an Australian Credit Licence and is not otherwise authorised to provide credit services.

ASIC alleges that book up customers are required to provide their debit cards and PINs, as well as details about their income, when they purchase goods. The customer’s card is used to withdraw all or nearly all of the customer’s money from their bank account on or around the day they are paid. ASIC says that this amounts to unconscionable conduct.

ASIC also alleges that the provider charged customers more for buying second hand vehicles on book up, which essentially amounts to payment of a fee.