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Lender found to have charged prohibited fees

by Reporter10 minute read

The Federal Court has found that the non-bank lender entered into more than half a million contracts that included a prohibited fee.

SunshineLoans Pty Ltd – a non-bank lender that used to offer small amount credit contracts (SACCs) but now offers medium amount credit contracts (of between $2,050 and $2,500) – has been found to have entered into over 670,000 contracts that included an amendment or rescheduling fee that is not permitted by the National Credit Code.

In a case brought against the lender by the Australian Securities & Investments Commission (ASIC), the Federal Court found that, between July 2016 and November 2020, Sunshine Loans required the payment of these fees by consumers over 12,000 times and accepted payments on over 8,000 occasions.

The court found that Sunshine Loans received nearly $300,000 from customers, even though the fees were prohibited under the National Credit Code.


It added that it had failed to comply with credit legislation as a result of this conduct.

While the lender denied the alleged contraventions and claimed that the fees in issue were, in fact, fees that were payable on the customers’ default (and therefore permitted under the legislation), the court did not agree.

Sunshine Loans ceased charging the amendment or rescheduling fees in November 2020, shortly after ASIC intervention, without admission of liability.

The parties are to be heard as to the appropriate declarations, injunctions, and civil penalties as a result of the findings of contravention.

Noting the judgment being handed down, the chair of ASIC, Joe Longo, said: “Consumers of SACC loans are some of Australia’s most vulnerable. They often take out these small loans for just a few hundred dollars to cover emergency or essential expenses.

“SACC loans are extremely costly and ASIC is committed to ensuring consumers aren’t charged additional prohibited fees.”

The case is one of several actions ASIC is taking against SACC providers.

In September 2023, ASIC was successful in proceedings against SACC provider Ferratum Australia, for allegedly charging prohibited fees and overcharging customers.

[Related: Federal Court rules against Ferratum Australia]

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