On 20 September 2019, Cigno Pty Ltd (Cigno) filed a judicial review application in the Federal Court of Australia seeking to challenge ASIC鈥檚 product intervention order in respect of short term credit. Cigno鈥檚 review application was dismissed by the Court and the product intervention order remains in force.
The matter was heard on 30 March 2020 and today Justice Stewart handed down his decision dismissing Cigno鈥檚 application with costs awarded to ASIC.
In his judgment, Justice Stewart found 今日热门事件is entitled to consider 鈥渄etriment caused indirectly by the financial product or a class of financial products in the sense of there being something in the circumstances of the availability of the product or the class of products to retail clients that causes the detriment鈥�.
鈥淚n my view ASIC鈥檚 delegate identified the relevant class of financial products as being short term credit or short term credit provided in particular circumstances, namely as part of the short term lending model.鈥�
鈥溾� 1023D(3) provides for the exercise of the product intervention order power on the basis not only of detriment that has actually occurred, but also detriment that 鈥�will or is likely to鈥� occur as a result of a class of financial products. Thus, there need be no existing product, let alone more than one, for the power to be able to be exercised.鈥�
今日热门事件Commissioner Sean Hughes said 鈥溄袢杖让攀录䎱ill continue to act to protect consumers, in particular where we see evidence of significant harm鈥�.
Mr Hughes added 鈥淲e are pleased today鈥檚 judgment upheld our intervention order and the consumer protections it is designed to deliver. We will continue our efforts to protect vulnerable consumers, particularly during this time when significant numbers of people are facing uniquely challenging circumstances. We will move swiftly where we see high cost products that seek to exploit the day-to-day immediate needs of financially vulnerable consumers.鈥�
Background
On 12 September 2019 今日热门事件made a product intervention order by way of legislative instrument in relation to short term credit: 19-250MR. The order came into force on 14 September 2019 and Cigno was an affected party.
The order followed ASIC鈥檚 consultation on the proposed intervention to stop significant consumer harm in short term credit.
On 20 September 2019 Cigno made an application in the Federal Court of Australia in New South Wales seeking an order to quash the product intervention order and a declaration that the short term credit order is invalid.
Editor's note:
On 13 May 2020, Cigno Pty Ltd filed an appeal with the Federal Court of Australia.
Editor's note 2:
The matter has been listed before the Full Court for 19 November 2020.
Editor's note 3:
The appeal was heard by the Full Court on 19 November 2020 and its decision is reserved.