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Payday lender hit with $42,500 penalty

by Staff Reporter7 minute read
The Adviser

One payday lender has received an infringement notice from ASIC for breaching the responsible lending laws.

ASIC said that Abaz, which offers loans nationally through the www.moneyplus.com.au website, has paid a $42,500 penalty for failing to obtain required account statements from consumers.

The responsible lending rules for payday lenders were updated in March 2013.

They include a requirement that lenders must obtain and consider consumers' bank statements from banks that cover at least the last 90 days where income payable to the consumer is credited.

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ASIC said that Abaz had updated its responsible lending policies and procedures to comply with the new requirements and had appointed an independent compliance consultant to review these practices.

Deputy chairman Peter Kell said the aim of the enhanced responsible lending obligations is to prevent payday lenders from providing unsuitable loans.

ASIC can issue an infringement notice when it believes that consumer protection laws have been contravened.

However, the payment of an infringement notice is not an admission of a contravention of the NCCP.

[Related: ASIC takes action against two payday lenders]

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