ISCOVER
The Federal Court has rejected the majority of claims made by the Australian Securities and Investments Commission (ASIC) against a car lending provider.
The financial services regulator has failed to convince the Federal Court that car lender Money3 Loans breached the National Consumer Credit Protection Act 2009 (NCCP) multiple times.
A court case first lodged in 2023 revealed that the regulator had alleged that, between May 2019 and February 2021, Money3 breached responsible lending laws and failed to properly assess whether certain borrowers (including First Nations peoples) could meet their repayment obligations before entering into loan contracts for the purchase of second-hand vehicles.
In its case, ASIC alleged that as a result of the credit contracts, Money3 – which provides personal loans and consumer vehicle finance through direct, broker, and dealer channels – earned profits, including interest, and loan application or establishment fees on the loans, at the expense of consumers.
Delivering the judgment on Friday (5 September), the court rejected several of ASIC’s allegations that the car finance provider failed to assess whether the loan contracts were unsuitable for borrowers and entered them into unsuitable loans.
However, the court did find that Money3 failed to make reasonable inquiries about or verify each borrower’s living expenses based on bank statement transaction data for five consumer loans. In addition, the court found that on one of these loans, Money3 also failed to make reasonable inquiries about whether the borrower’s requirements included a request to finance the application and broker fees.
Beyond these specific contraventions, the court rejected several allegations made by ASIC.
For example, the court found that ASIC failed to prove that Money3’s use of its own internal product guide expense figures and its overall training and compliance policies were arbitrary, or that responsible lenders would have used alternative benchmarks.
The court also rejected ASIC’s expert evidence on these matters and deemed it unreliable due to its reliance on undisclosed “minimum expectations” of the lending industry.
Furthermore, the judge stated that ASIC did not establish that Money3’s training materials were inadequate, nor that its policies and procedures, including those for updating documents and monitoring compliance, were insufficient to meet its statutory obligations.
The court dismissed claims related to the company’s systems and data management, concluding that ASIC had not shown any systemic failure in the area.
The court also rejected ASIC’s claims that Money3 failed to take reasonable steps to ensure its representatives complied with credit legislation, or that its representatives were not adequately trained and competent.
Specialist finance provider Solvar, the parent company of Money3, said it would address the findings that were found in favour of ASIC, going forward.
The chair of Solvar, Stuart Robertson, said: “It is reassuring that the court found that Money3’s staff are adequately trained and competent to engage in credit activities authorised by our credit licence.
“Furthermore, the Court found that Money 3’s internal benchmarks for assessing suitability of potential customers were appropriate and in compliance with responsible lending obligations. We will address the limited findings in favour of ASIC as we strive for our teams to operate at best practice.”
The managing director and CEO of Solvar, Scott Baldwin, added: “Solvar is committed to ensuring the well-being of its customers and workforce. We are liaising with community and consumer groups to work toward best practice. We also actively participate in external networks and industry forums to engage about issues raised, and impacting customers.”
Commenting on the case outcome, ASIC chair Joe Longo said: “ASIC took this case after receiving numerous complaints, including from consumer advocates. We were concerned that consumers on social security payments were entering into potentially unsuitable loans. We are currently considering the judgment.
“Responsible lending laws exist to ensure that credit providers do not enter consumers into loans that will cause them detriment in the long run. These laws are an important part of Australia’s consumer protection framework. Even though we may not ultimately be successful in every case we run, it is important ASIC take action to enforce the law where it is concerned a breach has occurred.”
A case management hearing has been listed for 30 October 2025.
[Related: ASIC sues Money3 for alleged responsible lending breaches]
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