ASIC is taking its Cigno and BSF payday lending case back to the Full Federal Court, saying that a $7 million penalty falls short.
The Australian Securities and Investments Commission (ASIC) is appealing the Federal Court’s $7 million penalty order against payday lenders Cigno Australia and BSF Solutions.
The appeal targets April 2026 orders requiring Cigno Australia and its director Mark Swanepoel and BSF Solutions and its director Brenton Harrison to pay a combined $7 million after the court found they ran a high‑cost lending model without an Australian credit licence and imposed fees banned under national credit laws.
ASIC has already secured findings that both men were directly involved in the contraventions, including the unlicensed credit activity and breaches of the Credit Act.
In announcing the appeal, the regulator highlighted the gap between the penalty and the money drawn from customers.
ASIC said the lending model run by Cigno Australia, BSF Solutions, and their directors “charged consumers more than $90 million in unlawful fees” and that the choice to operate without a licence meant borrowers were denied “important rights and protections under the credit legislation”.
It added that “the respondents had not engaged in any remediation program to address the consumer harm caused by charging the unlawful fees”, reinforcing ASIC’s concern that the court’s orders “provide insufficient deterrence”.
ASIC confirmed that the case would now go before the Full Federal Court on a date still to be fixed.
Clarifying how penalties should be set
As well as seeking a higher overall sanction, ASIC is asking the Full Court to clarify two legal points that go beyond the Cigno dispute.
The first question is when a company or director can rely on having obtained legal advice to argue for a reduced penalty without actually putting that advice before the court.
ASIC wants guidance on how far contraveners can lean on generic references to external advice without full disclosure of what was said.
The second issue goes to how the “benefit obtained” from wrongdoing should be measured when a court is assessing penalties.
The primary judge treated benefit as profit, but ASIC will argue that the starting point should be gross revenue from the misconduct.
The regulator’s position is that using gross revenue better reflects the scale of an unlawful business model.
How the Cigno model worked
The appeal follows a long enforcement campaign targeting Cigno’s “No Upfront Charge Loan Model”.
ASIC launched civil penalty proceedings in October 2023, alleging Cigno Australia and BSF Solutions were effectively providing regulated credit without a licence and using a fee structure that sidestepped statutory price caps.
In May 2024, the Federal Court agreed, finding that Cigno Australia and BSF Solutions had engaged in credit activity without a licence and charged prohibited fees and further confirmed that Swanepoel and Harrison were involved in those breaches.
ASIC said the scheme advanced about $34 million in short‑term loans to more than 100,000 customers between July and December 2022 and generated “tens of millions” of dollars in associated fees.
According to ASIC, many borrowers were charged amounts far beyond what the Credit Act allows, with some consumers facing total fees of more than 600 per cent of the original loan.
One example put before the court involved a customer who obtained a $200 loan over two months and paid $177.75 in fees to Cigno and BSF.
That same borrower later took out a further $600 loan and paid an additional $703 in fees.
On 20 April 2026, the Federal Court imposed civil penalties totalling $7 million: $3 million each on Cigno Australia and BSF Solutions and $500,000 on Swanepoel and Harrison personally.
[Related: ASIC sues loan agency over alleged unconscionable conduct]
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