CEO Phil Johns Welcomes Indepth Media Coverage Of Recent ASIC Media Release
Feb 10 2016
CEO Phil Johns Welcomes Indepth Media Coverage Of Recent
ASIC Media Release Regarding Fair Go Finance
NCPA is pleased to help give more expansive media coverage to the recent media release regarding Fair Go Finance and how the problems identified by ASIC have arisen even though Fair Go had extensive legal opinion about their product before going to market. Phil Johns feels that the coverage given in the recent article "ASIC fines payday lender $34,000 for exceeding fee caps" by Nathan Lynch (Head Regulatory Analyst for Thomson Reuters) has given voice to the previously unacknowledged issue with regard to ASIC finding problems with SACC lenders.
The following extract from the article presents this issue:
"Sources in the payday lending industry said the matter was another worrying example of ASIC taking action against a small lender on "questionable grounds" knowing that the lender would not be able to afford to defend the action. Regulatory Intelligence understands that Fair Go Finance had secured legal advice prior to launching the Flexi Loan product that stated that its product was compliant with the NCCP Act. Based on the prohibitive costs associated with defending the legal action, however, Fair Go Finance made a decision to pay the fine and withdraw the product from the market.
The article further discusses that:
"...this was a worrying trend as small lenders simply did not have the resources to defend ASIC litigation in the courts. He said lenders were often acting on the basis of legal advice when developing products only to find that ASIC took a more conservative view of the law than their lawyers. In most cases he said SACC providers lacked the resources to challenge ASIC in the courts."
The pdf of the full article is available at the bottom of this page.