Coast payday lenders face court action
THE corporate regulator is taking court action against Gold Coast payday lenders they say charged massive interest on small loans while holding no credit licence.
On Wednesday the Australian Securities and Investments Commission said it had filed proceedings in the Federal Court alleging Cigno and associated company BHF Solutions breached the National Consumer Credit Protection Act 2009 (National Credit Act).
ASIC said Cigno and BHF between October 18, 2019 and March 31, 2020 had contravened section 29 of the National Credit Act by providing credit without holding an Australian credit licence.
The regulator said the two companies operate a lending model providing small amounts of credit to a large number of borrowers and charging "substantial fees" on the money borrowed.
It said the Credit Act requires companies engaging in specific credit activities to be licensed or authorised.
ASIC is asking the court for declarations that the companies breached the Credit Act and permanent and interim injunctions under section 177 restraining both companies from providing credit or engaging in credit activities.
A court date is yet to be set.
Cigno counts former ACT Brumbies rugby player Mark Swanepoel as sole director while Brenton Harrison is the sole director of BHF Solutions.
Originally published as Coast payday lenders face court action