ASIC sues former Super Rugby player Mark Swanepoel, payday lenders Cigno Australia and BSF Solutions
The financial services watchdog has launched legal action in the Federal Court against Gold Coast based payday lenders after they allegedly provided credit without a licence.
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The financial services watchdog has launched legal action in the Federal Court against Gold Coast based payday lenders after they allegedly provided credit without a licence.
ASIC is suing Cigno Australia Pty Ltd, its director Mark Swanepoel as well as BSF Solutions Pty Ltd and its director Brenton James Harrison.
Mr Swanepoel is a former Super Rugby halfback.
ASIC alleged the entities did not hold an Australian credit licence when they provided short-term credit to more than 100,000 people between July and December last year and charged substantial fees.
It further alleged BSF gave $34m in loans and both BSF and Cigno Australia charged more than $70m in fees without credit licences.
Mr Swanepoel and Mr Harrison were involved in the unlicensed activity and Credit Act breaches, ASIC alleged.
Cigno Australia and BSF Solutions were both contacted for comment.
The national corporate regulator said it was concerned customers were charged excessive fees above the amounts permissible under the Credit Act.
This included some affected customers who were hit with fees of more than 600 per cent of their total loan amount.
ASIC deputy chair Sarah Court believed the credit model was designed to bypass consumer protection laws, allowing the companies to impose hefty fees to consumers, including those who were vulnerable and faced financial distress.
“ASIC has brought this matter to court to stop what we consider to be a harmful lending model and to protect consumers from excessive fees and charges,” Ms Court said.
It is seeking for Cigno Australia and BSF to be banned from engaging in credit activities or accepting fees or charges on loan agreements under a “no upfront charge loan model” as well as penalties and declarations.
ASIC is also seeking for Mr Harrison and Mr Swanepoel to be banned from any future business engaged in credit activity.
A date for the first case management hearing is yet to be scheduled.
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