ASIC sues over latest incarnation of payday lender model
The corporate regulator is suing a new Gold Coast payday lending scheme that allegedly involved $70 million in fees on almost $34 million in loans.
The action in the Federal Court targets, if its claim is successful, financial penalties against two entities and their directors, who include a former Super Rugby halfback. Injunctions are also sought, if there is a successful outcome.
Mark Swanepoel in his playing days.
The Australian Securities and Investments Commission lawsuit marks the latest in almost a decade of litigation between the regulator and such borrowing systems, and members of the Swanepoel family.
The companies targeted on Tuesday were Cigno Australia and BSF Solutions, for alleged involvement in providing credit without a licence.
Cigno Australia director Mark Swanepoel, 33, and a former Super Rugby player, and BSF Solutions Brenton Harrison, 35, who gives his address as in the Gold Coast hinterland, are also named as respondents in the civil lawsuit.
Comment was being sought from the men, and they are yet to file a defence to ASIC’s claim. Accounts last year for Cigno Australia’s parent company said ASIC warned a banning order would impact their product, so the subsidiary had taken “legal advice from Piper Alderman” solicitors and ensured with BSF Solutions that they traded legally.
ASIC’s lawsuit alleged the system was designed to avoid regulation under national credit laws that provide protection from charging excessive fees.
Its filing on Tuesday cited examples of large fees for some customers: one person allegedly borrowed $250 over 57 days and was charged $840.53 in fees.
The system worked with BSF entering deals with more than 100,000 customers between July and December last year to lend money,
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