Court hits lender with $3.5m unfair-terms penalty

CashnGo admitted that terms in its standard-form SACC contracts were unfair and that it had failed to issue legally compliant default notices to thousands of customers.

It consented to ASIC’s proposed orders, including the $3.5 million penalty, which is to be paid by instalments over two years.

Automated withdrawals in focus

The proceedings centred on what ASIC described as CashnGo’s unscheduled-withdrawals practice, which was activated when a borrower missed a repayment.

CashnGo admitted its default and authority terms allowed its automated systems to monitor a customer’s bank-account balance, repeatedly attempt to recover missed payments as money became available, and make debits outside the scheduled repayment cycle.

Customers were not told in advance of the timing, frequency, or amount of the proposed withdrawals and could not opt out of the practice. The court found those arrangements were unfair.

ASIC noted that CashnGo entered into more than 201,000 SACCs containing the terms between April 2022 and May 2025, involving more than 85,000 consumers.

From 9 November 2023 to 30 June 2026, the lender also admitted making 190,546 SACCs containing unfair terms and, over the same period, further admitted at least 658,000 contraventions by applying or relying on the default and authority provisions in its debt-recovery activity.

ASIC chair Sarah Court said the conduct deprived consumers of meaningful control over money entering their accounts.

“By monitoring consumers’ accounts and withdrawing consumers’ funds without notice shortly after they were deposited, CashnGo denied consumers control over their own finances, which is unacceptable conduct,” Court said.

“Many consumers were likely already experiencing financial difficulty and may have been left without enough money for essentials including food, rent and day-to-day living expenses.

“This case demonstrates that ASIC will take action where lenders use unfair contract terms which may harm consumers.”

Court highlights consumer harm

Justice Jackman found CashnGo’s collection arrangements provided the lender with far-reaching influence over how and when customers’ available funds were used after default.

“CashnGo obtained and exercised a substantial degree of practical control over the timing, amounts and frequency by which overdue repayments were recovered from consumers following default,” Justice Jackman said.

“This had the practical effect of allowing CashnGo to subordinate other calls on a consumer’s funds to the consumer’s obligation to repay CashnGo which could leave consumers without funds to pay for essential needs such as food, accommodation, or medical expenses.”

The court found the lender’s unscheduled-withdrawal practice could, and on some occasions did, leave consumers with less than $5 in their bank accounts.

Justice Jackman also rejected any characterisation of the matter as isolated operational error, finding the misconduct was rooted in the lender’s systems.

“The contraventions were serious and ‘not the result of isolated conduct by junior employees. They arose from systems, contractual terms and practices of CashnGo’s senior management and directors,’” Justice Jackman said.

Further, Justice Jackman held that the contraventions “occurred in connection with the provision of SACCs to consumers seeking access to relatively small sums of money on an urgent basis and who may have been unable to obtain credit from mainstream lenders”.

“CashnGo expressly marketed its products to consumers who required funds quickly and to consumers with poor credit histories. In those circumstances, the unfair contract terms and the Unscheduled Withdrawals Practice operated against consumers, some of whom were likely to be vulnerable to financial hardship arising from unexpected and ongoing withdrawals from their bank accounts,” he said.

Contract overhaul ordered

The court ordered CashnGo’s default and authority terms to be void in all current SACC consumer contracts from 14 September 2026.

From that date, CashnGo must introduce replacement terms that provide consumers the ability to opt out of its unscheduled-withdrawals practice.

The lender must also publish a website notice explaining the changes made to affected contracts.

CashnGo has additionally been permanently restrained from applying or relying on the unfair terms, or future clauses substantially similar to them, in SACCs with consumers.

[Related: ASIC sues loan agency over alleged unconscionable conduct]