The Federal Court has ruled against Sunshine Loans, a small amount lender, for including an amendment or rescheduling fee in more than 670,000 contracts, a practice not permitted under the National Credit Code.
Between July 2016 and November 2020, the company imposed these fees more than 12,000 times, ultimately collecting nearly $300,000 from consumers illegally.
ASIC Chair Joe Longo highlighted the vulnerability of consumers who typically resort to small amount credit contract (SACC) loans for emergency expenses.
“Consumers of SACC loans are some of Australia’s most vulnerable,” Longo said. “They often take out these small loans for just a few hundred dollars to cover emergency or essential expenses. SACC loans are extremely costly, and ASIC is committed to ensuring consumers aren’t charged additional prohibited fees.
Following ASIC’s intervention, Sunshine Loans ceased charging the disputed fees in November 2020, although they did not admit liability.
Consumers affected by similar prohibited fees are encouraged to contact their lender for refunds or escalate their complaints to the Australian Financial Complaints Authority (AFCA) if dissatisfied with the response.
Support and additional resources are available through the National Debt Helpline and Moneysmart for those needing assistance with loans and debt management.
Sunshine Loans, primarily operating online, now offers medium amount credit contracts ranging from $2,050 to $2,500.
This case follows ASIC’s successful proceedings in September against another SACC provider, Ferratum Australia, for related offenses, indicating a tightening regulatory scrutiny over the small loans industry in Australia.
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