Payday lending company, Paid International, has had its credit licence suspended by ASIC due to insolvency, after being ordered to pay almost $1 million in refunds to customers.
In October 2014, as part of an enforceable undertaking (EU) accepted by ASIC, the company agreed to refund customers who were charged excessive loan fees.
An external administrator was appointed to Paid in January 2015 and the company entered into a deed of company arrangement (DOCA) – a binding arrangement between the company and its creditors – in March 2015.
The Deed Administrator has since admitted a total amount of $913,946 of claims in relation to the 6,650 consumers owed a refund under the EU, and anticipates a total dividend of 45 cents in the dollar to be distributed to unsecured creditors including the eligible consumers under the EU.
As at the end of June 2015, $239,308 has been refunded. The company’s credit licence has been suspended by ASIC until 7 April 2016.
ASIC has also cancelled the Australian credit licence of Leadfish, a lead generation company and subsidiary of Paid.
In March, ASIC said it was putting payday lenders on notice after a review into the controversial sector revealed payday lenders were falling short of meeting lending obligations.
In August, the federal government also announced it would be conducting a regulatory review into the payday lending sector.
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