NIMBLE ORDERED TO REPAY $1.5M TO BORROWERS
Written on the 23 March 2016 by Nick Nichols
PAYDAY lender Nimble Australia has been forced to refund more than 7000 customers a total of $1.5 million following a probe into its activities by the corporate watchdog.
The Australian Securities and Investments Commission says its investigation was triggered by concerns that Nimble was not adhering to responsible lending obligations.
ASIC says the investigation found that Nimble had not properly assessed the financial circumstances of many customers before approving loans, arguing that the algorithms the company relied upon didn't take the financial information of consumers into account.
The Gold Coast-based Nimble, which was previously known as Cash Doctors, was also accused of failing to assess the habits of clients who had sought repeat loans from other payday lenders within a short period of time.
"Even where repeat loans were properly identified, Nimble did not take sufficient or appropriate steps as required by law before providing a loan to the consumer," ASIC says.
As a result, Nimble has been ordered to pay about 7000 consumers more than $1.5 million through a consumer remediation program overseen by Deloitte Touche Tohmatsu.
It also has been ordered to make a $50,000 contribution to Financial Counselling Australia.
ASIC has also ordered that Nimble undertake an independent external review of its systems and processes and to report the findings to the commission.
"This is a significant outcome for financially vulnerable consumers," says ASIC deputy chairman Peter Kell.
"This outcome is a further example of ASIC's strong focus on the payday lending sector.
"This remains a high priority area for ASIC, and we expect the industry to continue to lift its game."
ASIC has acknowledged that Nimble has made significant changes to its processes and systems since the investigation was launched.
Nimble CEO Sami Malia says the company regrets any inconvenience caused to those customers affected and that it has worked 'co-operatively with ASIC to quickly fix the issues through system enhancements'.
"Nimble has identified and promptly resolved these issues," Malia says.
"They affected around 1.2 per cent of loans written during the period from July 1, 2013, to July 22, 2015.
"These application assessment issues were entirely unintended and were resolved in collaboration with ASIC. There have been no adverse findings against Nimble."
Meanwhile, ASIC says consumers are expected to be contacted shortly in relation to the planned refund process which is expected to take six months to complete.
Author: Nick Nichols