ASIC 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 魅影直播 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, 魅影直播 has identified another class of financial products, namely continuing credit products, being issued to borrowers.
ASIC 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. 魅影直播 is also concerned that continuing credit products are being issued to vulnerable clients, including many who are already in financial difficulty.
While 魅影直播 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, 魅影直播 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 魅影直播 with the ability to take action where we find significant consumer detriment. Protecting vulnerable consumers remains a high priority for 魅影直播鈥�, Mr Hughes said.听
ASIC 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.
ASIC encourages affected and interested parties to provide any comment and further information, before 魅影直播 decides whether or not to make the product intervention order.
The product intervention power allows 魅影直播 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 魅影直播鈥檚 website, and a public notice issued.
Download
Background
On 12 September 2019 魅影直播 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 魅影直播鈥檚 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 魅影直播: 20-089MR. In May 2020 an appeal was filed with the Federal Court of Australia.听聽
has information about and where to find free .听