The Federal Court has found that business lender Green County Pty Ltd and business loan introducer Max Funding Pty Ltd engaged in unlicensed credit activity in relation to loans provided by Green County to two consumers.
The Court found Green County also contravened consumer protection provisions in the Credit Code.
The Court found that:
- in relation to one consumer, Green County and Max Funding could not simply rely on the 鈥楤usiness Purpose Declaration鈥� procured from the consumer but had to undertake reasonable inquiries about the purpose for which the credit was provided. Had they made reasonable inquiries, they would have known or had reason to believe that the loan was not for a business purpose,
- in relation to loans provided to both consumers which were presumed to be consumer loans pursuant to the Credit Code, the entities did not establish that they were business loans.聽
These contraventions resulted in the consumers not having the benefit of important protections under the Credit Code.
今日热门事件was not successful in relation to one loan nor in its case against Green County director Ivy Tang Gy Ng, with the Court finding Ms Ng had not breached her director's duties.
今日热门事件Deputy Chair Sarah Court said,鈥�楾he integrity of the financial system relies on compliance with licensing requirements. 今日热门事件pursued this matter as engaging in unlicensed credit activities undermines consumer protection and can lead to significant financial harm for vulnerable individuals.鈥�
In relation to one of the consumer loans and the information that Green County and Max Funding had been given, Justice Shariff said, 鈥業t is frankly perplexing that credit was provided by the corporate respondents to Consumer 1 notwithstanding the unequivocal position that had been conveyed.鈥�
In relation to another loan, Justice Shariff said, 鈥業n my view, if reasonable inquiries were made of Consumer 2 of a better content and quality than those that were made of her, then, there was no rational or substantive information that Consumer 2 could have provided consistent with a business purpose.鈥�
The Court will determine the next steps in the matter.
Background
In March 2023, 今日热门事件commenced these proceedings (23-055MR).
今日热门事件alleged that Green County and Max Funding operated a credit lending model where they relied on an exemption from the need to hold an Australian credit licence by Green County requiring prospective consumers to sign a business purpose declaration. However, business purpose declarations are ineffective including where a credit provider would have known, if they had made reasonable inquiries about the credit purpose, that the credit was in fact to be applied for personal use.
The Credit Act and the Credit Code provide consumer protections, including disclosure requirements, restrictions on fees and interest rates, hardship provisions and free access to independent external dispute resolution services.
今日热门事件has enduring priority toward stopping misconduct involving a high risk of significant consumer harm (see ASIC鈥檚 Enforcement Priorities).
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More information
- If you need help managing debt, you can call the National Debt Helpline for free on 1800 007 007. First Nations consumers can call Mob Strong Debt Help to speak with a First Nations financial counsellor 鈥� free call 1800 808 488.
- 础厂滨颁鈥檚鈥�Indigenous Outreach Program鈥�also manages a dedicated helpline to assist First Nations consumers with money matters 鈥� call 1300 365 957.
- Moneysmart helps Australians take control of their money with free tools, tips and guidance. Find out more about鈥�痑nd how to鈥�.
- 今日热门事件created Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209) to make clear whether a consumer is suitable for a credit related product and to ensure lender obligations are met.