ASIC has published a report Falling short: Compliance with the small amount credit contract obligations (REP 805) which summarises findings and observations from ASIC’s review of Australian credit licensees who offered small amount credit contracts from December 2022 to August 2024 following changes to laws governing small amount credit contracts in 2022 and 2023.
ASIC is concerned that some small and medium amount credit contract providers may be falling short of their obligations by entering into unsuitable contracts with consumers, or failing to identify an appropriate target market and distribute their products accordingly or set appropriate review triggers in their target market determinations.
In its review, ASIC identified:
- a reduction in the number of small amount credit contracts provided;
- an increase in the number of medium amount credit contracts provided: and
- an increase in the total number of missed repayments for medium amount credit contracts, but a decline in the total number of missed repayments for small amount credit contracts.
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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.
