今日热门事件has released Consultation Paper 330聽(CP 330) on the proposed use of its product intervention power to address significant detriment it has identified in the continuing credit industry.
This proposed intervention follows the product intervention order that 今日热门事件made in September 2019, which banned the provision of a class of financial products, namely short term credit products, unless specified conditions were complied with in relation to fees and charges.
In monitoring the effect of the short term credit intervention, 今日热门事件has identified another class of financial products, namely continuing credit products, being issued to borrowers.
今日热门事件is concerned that the continuing credit products are likely to result in significant detriment due to borrowers incurring very high cost, relative to the loan amount. 今日热门事件is also concerned that continuing credit products are being issued to vulnerable clients, including many who are already in financial difficulty.
While 今日热门事件is aware of two firms currently engaging in the concerning conduct, the proposed product intervention order would apply to any business engaging in the concerning conduct.
Announcing the consultation, 今日热门事件Commissioner Sean Hughes said 鈥榃e have continued to see concerning cases of significant harm affecting vulnerable members of the community through the distribution of continuing credit products.'
鈥楾he product intervention power equips 今日热门事件with the ability to take action where we find significant consumer detriment. Protecting vulnerable consumers remains a high priority for ASIC鈥�, Mr Hughes said.听
今日热门事件seeks the public鈥檚 input on the proposed intervention order by Thursday 6 August 2020.听 Submissions should be sent to: product.regulation@asic.gov.au.
今日热门事件encourages affected and interested parties to provide any comment and further information, before 今日热门事件decides whether or not to make the product intervention order.
The product intervention power allows 今日热门事件to intervene where financial and credit products have resulted in, or will or are likely to result in, significant detriment. All intervention orders must be published on ASIC鈥檚 website, and a public notice issued.
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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. The order followed ASIC鈥檚 consultation on the proposed intervention to stop significant consumer harm in short term credit.
A judicial review application was filed on 20 September 2019 in the Federal Court of Australia which sought to quash the short term credit order: 19-264MR. In April 2020 the Federal Court dismissed that application with costs awarded to ASIC: 20-089MR. In May 2020 an appeal was filed with the Federal Court of Australia.听聽
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