NCPA Frustrated By ASICs Misleading Actions
Feb 16 2016
Frustration at Continual Problems with ASIC's Approach to Lenders
FRUSTRATION WITH TRYING TO 'GET IT RIGHT'
The recent Media Release by ASIC has prompted NCPA's CEO Phil Johns, to comment on the frustrations of dealing with ASIC's continual 'misleading actions' when dealing with lenders in the Small Amount Credit Contract (SACC) industry. It was reported by ASIC that its investigation into Fair Go Finance's 'Flexi Loan' product identified attempts to avoid the consumer protections under the NCCP Act.
However, a recent article in The Adviser, reported comments by NCPA chief executive Phil Johns that, "the Flexi-Loan product saved customers money in the majority of cases."
“Fair Go Finance, like all of NCPA’s members, is a responsible lender and ASIC’s investigation in this case found no issue with our member’s responsible lending processes,” Mr Johns said.
The article reported further that, "Fair Go Finance, like all of our members, consulted legal counsel" as Members tried to ensure that the loans it offered were, "safe for consumers and met ASIC’s standards".
"Mr Johns said the case is simply a differing of legal opinion on the interpretation of the NCCP Act between lawyers. Even though Fair Go still believes the legal advice they received is correct and that the product is legal, they took the commercial decision to simply comply with ASIC’s wishes,” he said.
Licenced lenders and their legal advisers must navigate a huge volume of legilsation, more than banks providing home loans, just to provide a loan of even $100. This ASIC investigation of Fair Go Finance highlights the continual frustration felt by licenced lenders as they strive to 'get it right' only to have ASIC's legal team come up with a different interpretation.
FRUSTRATING USE OF WRONG TERMINOLOGY
Further in the article, The Adviser reports that, "What the NCPA finds “frustrating”, Mr Johns said is the continued use of the term ‘payday loan’ to describe the product it was investigating when it was not a payday loan."
“First and foremost, the concept of payday lending, where credit is required to be paid back on a borrower’s next payday, was made illegal in March 2013,” he said.
“For ASIC as a financial services regulator, operating amongst knowledgeable professionals, who know the correct terminology, we find it not only frustrating, but misleading."
CLICK HERE to read the full artcle by The Adviser.