CASH CONVERTERS FORCED TO REPAY $11M ON LOANS

Written on the 9 November 2016 by Nick Nichols

CASH CONVERTERS FORCED TO REPAY $11M ON LOANS

THE corporate watchdog has forced pay-day lender Cash Converters International (ASX:CCV) to repay borrowers $11 million after finding the company had failed to adequately assess the ability to repay loans.

Cash Converters has been issued with an enforceable undertaking to refund consumers $10.8 million on about 118,000 loan contracts. It has also paid a $1.35 million penalty for the infringements issued by the Australian Securities and Investments Commission.

ASIC says the infringements relate to small loans issued by Cash Converters through its website, arguing that the company 'failed to make reasonable inquiries into consumers' income and expenses, particularly in situations where the small amount loan was presumed by the credit legislation to be unsuitable'.

It says Cash Converters had not properly assessed the expenses of the borrowers through verification by bank statements, instead relying on its own internal calculations of likely expenses.

In a statement to the ASX, Cash Converters says it is will pay back 'certain customers' who had applied for small-sum loans between July 1 2013 and June 1 2016 in accordance with ASIC's findings.

The company has already made provisions for the $12 million in refunds and infringement penalties in its accounts.

Earlier this year, Gold Coast-based lender Nimble was forced to repay 7000 customers $1.5 million after a similar probe by ASIC into its activities.

Others in the firing line include BMW Finance, which paid $391,000 for breaching responsible lending and repossession laws, and Westpac (ASX:WBC) which paid $1 million following issues surrounding credit card limit increases.

"ASIC is seeking to protect financially vulnerable consumers, many of whom are recipients of welfare payments, from falling victim to unsuitable payday loans," says ASIC deputy chairman Peter Kell.

"Payday lending is a high priority area for ASIC, and we will continue to pursue lenders who do not follow their responsible lending obligations."

Under the enforceable undertaking, Cash Converters has engaged an independent expert to review its operations and compliance practices.

Cash Converters' shares were trading more than 6 per cent higher at 35c by the midday session following today's announcement.

 


Author: Nick Nichols

Latest News

THE 2017 MELBOURNE TOP 50 COMPANIES REVEALED: NUMBERS 40 TO 31

Our countdown to the 2017 Top 50 Melbourne companies continues with the next 10 on the list from 40 to 31, which f...

CANNABIS COMPANY SECURES PERMITS FOR NEW PLANTS TO BEGIN CULTIVATION

MEDICAL Cannabis company Cann Group Limited (ASX: CAN) will receive its first plant material and start cultivation of...

CHARTER HALL SNAPS UP SALAMANDER BAY CENTRE FOR $174M

RETAIL investment trust Charter Hall (ASX: CQR) has purchased the regional Salamander Bay Centre in New South Wales f...

$12 MILLION OFFICE SALE UNDERPINS MILTON REVIVAL

ONE of Milton's well known office buildings has sold for $12.88 million, supporting the resurgence of the popular...

Related News

AFTERPAY GOES TRANS-TASMAN WITH TRADE ME DEAL IN NEW ZEALAND

AFTERPAY Holdings Ltd (ASX: AFY) has entered into an agreement with New Zealand trading site Trade Me Group Ltd (A...

STARTUP SUCCESS BOILS DOWN TO PERSONALITY, SAYS EXPERT

THOSE who own startups will know that there are many essential qualities of a good entrepreneur; their tenacity, fina...

SLATER AND GORDON TAKES SPOTLESS TO COURT

SPOTLESS Group (ASX: SPO) has been hit by a class action launched by Slater and Gordon (ASX: SGH) in the Federal C...

TOPSHOP GOES INTO ADMINISTRATION AMID VOLATILE RETAIL MARKET

TOPSHOP has become the latest in a string of retailers blasted by the volatile retail market, as the iconic fashio...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter