ASIC takes two payday lenders to task
Good to Go Loans and Web Moneyline take products offline following ASIC "concerns".
Two payday lenders have stopped offering a loan product after the Australian Securities and Investments Commission (ASIC) raised concerns that the loan skirted around regulations. Lenders providing short-term loans that fall within the definition of a Small Amount Credit Contract (SACC) must comply with the restrictions established by ASIC to protect consumers.
Lenders Moneyline and Good to Go Loans both offered the loan product, called OACC2, on terms which fell outside ASIC's definition of a SACC. However, on the same day that consumers entered into the loan contract, "almost all" agreements were modified to repay the loan at a higher regular repayment amount over a shorter period of time.
Both lenders "may have charged above the cap on fees and charges had the loans been construed as small amount credit contracts as defined under the National Credit Act" ASIC said in its statement.
The lenders are required to write off all outstanding OACC2 loans including debts which have arisen as a result of these loans; notify the credit reporting bodies that the loans have been settled so consumers' credit reports can be updated and not enter consumers into new OACC2 loans.
"ASIC will continue to take action to protect financially vulnerable consumers, many of whom are recipients of welfare payments, from falling victim to unsuitable payday loans," said ASIC deputy chairman Peter Kell.
If you have an outstanding debt from an OACC2 loan from either Good to Go or Moneyline taken out between 18 May 2014 and 20 May 2015 you are not required to make any more payments towards it. You will be contacted shortly by your respective lender.