Banned Gold Coast payday lender BHF Solutions flouts ASIC ban

The corporate regulator won’t act against this banned Gold Coast payday lender, despite the company continuing to lend money to vulnerable Australians.

THE corporate regulator won’t act against a banned Gold Coast payday lender despite the company continuing to lend money to vulnerable people from Western Australia.

A bank statement obtained by the Bulletin show BHF Solutions lent money to a Warburton teenager more than four months after being banned by the Australian Securities and Investments Commission.

BHF Solutions was one of four companies to receive a Product Intervention Order (PIO) last year. The other companies were Cigno Pty Ltd, Gold-Silver Standard Finance Pty Ltd and Myfi Australia Pty Ltd.

The PIO bans a model of “predatory” lending in the short-term credit industry. ASIC said the loan scheme caused “significant consumer detriment” via charges that were 10 times the original amount borrowed.

ASIC has clamped down on a payday lending model used by Cigno Pty Ltd

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The model works through one party acting as short-term credit provider while another charges other additional fees as broker, thus getting around obligations under the National Consumer Credit Protection Act 2009 preventing lenders charging more than 24 per cent annual interest.

Cigno is currently fighting the PIO in the Federal Court in NSW where a hearing is scheduled for March 30.

Warburton teenager Letisha West said she was called by a representative of Cigno this year to ask if she wanted to borrow money.

She agreed to borrow money and on February 10 this year $150 was placed into her account by BHF Solutions.

The Bulletin has seen the transaction statement which confirms the money was paid.

Ms West took the money out despite having repaid 10 times the amount she borrowed on a previous occasion.

ASIC has acted against payday lenders after finding clients have been charged 10 times the amount they have borrowed.

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The Warbuton area is an indigenous Australian community where levels of financial literacy are low.

The Bulletin called ASIC for comment and was told it is “well aware” of lending by BHF Solutions. But the spokesman stopped short of stating it would be taking enforcement action against the company.

“Since the PIO came into force BHFS has changed its model of lending,” the spokesman said.

“Since our original PIO ASIC has been clear in its intention and will continue to monitor and investigate any complaint to assess whether that order might have been breached and take action where any such breach is detected.”

Warburton Community services manager Damian McLean said the situation was “disgraceful”.

He said the payday companies were able to heap fees and charges on clients in addition to the capped interest by maintaining the fiction that “they introduce people to the lender and don’t loan money”.

Mr McLean said he had no confidence in ASIC to stamp out the payday lenders.

“Our experience with ASIC is it is the biggest koala park around,” he said.