ASIC has commenced civil penalty proceedings in the Federal Court against Sunshine loans Pty Ltd (Sunshine Loans) for collecting over $320,000 in fees ASIC alleges it was prohibited from charging when providing Small Amount Credit Contracts (SACCs).
ASIC alleges Sunshine Loans charged these fees to consumers when they sought to reschedule or amend the payments of their contracts over 9,000 times, in circumstances where ASIC alleges the fees were prohibited under the National Credit Code.
ASIC Deputy Chair Sarah Court said ‘In 2020, ASIC undertook a targeted review of SACC market participants to ensure consumers with these small loans were only being charged fees permitted under the Code. This project was especially important during the COVID-19 pandemic, noting the high cost of these loans and the financial vulnerability of consumers that need them.
‘Small amount loans are often taken out by financially vulnerable consumers to cover everyday expenses. These fees then increase consumers’ debt and can contribute to financial hardship. This case is one of a number of matters taken recently by ASIC to ensure that consumer protections in the Credit Code are enforced, and ASIC will be seeking Court orders and penalties if it is successful in the proceedings’ concluded Ms Court.
ASIC alleges that between July 2016 and November 2020, Sunshine Loans entered into over 670,000 contracts which included an amendment or rescheduling fee that is not permitted by the Code.
Sunshine Loans ceased charging the amendment or rescheduling fees in November 2020, shortly after ASIC intervention, without admission of liability.
The matter has yet to be listed by the Court.
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Background
Sunshine Loans operates online and offers small amount credit contracts of up to $2000.
In November 2021, ASIC commenced proceedings against SACC provider Ferratum Australia, for allegedly charging prohibited fees and overcharging customers (21-287MR).
Consumers who believe they have been charged a prohibited fee by a SACC lender should approach the lender and request a refund. If they are not satisfied with the response, they may lodge a complaint with the Australian Financial Complaints Authority (www.afca.org.au).If you need help, consumers can call the National Debt Helpline for free on 1800 007 007.
Moneysmart has information about loans and alternatives and where to find help with managing debt.
Editor's note:
The first case management hearing has been listed for 18 July 2022.
Editor's note 2:
A further case management hearing was listed for 20 September 2022.
Editor's note 3:
On 20 September 2022, the matter was adjourned until 28 November 2022.
Editor's note 4:
A hearing for an interlocutory application has been set down for 6 February 2023.
Editor's note 5:
The matter has been set down to trial on 17 July 2023 to run for five days.
Editor's note 6:
ASIC filed an Amended Originating Process and an Amended Concise Statement on 7 February 2023.
Editor's note 7:
A case management hearing for a separate question was listed for 19 April 2023.
Editor's note 8:
A Case Management Hearing & Interlocutory Hearing was listed for 1 June 2023.
Editor's note 9:
An Interlocutory Hearing was listed for 3 July 2023.
Editor's note 10:
Sunshine Loans made an application for hearing of certain separate questions before the Full Federal Court. On 1 June 2023, the application was refused. Download the reasons.
Editor's note 11:
Sunshine Loans made an application for leave to appeal the decision of 1 June 2023. On 27 June 2023, the application for leave to appeal was refused. Download the reasons.
Editor's note 12:
A case management hearing was listed for 12 July 2023.
Editor's note 13:
The hearing of this matter proceeded before Justice Derrington in the Federal Court at Brisbane on 17 July 2023 with the evidence concluding on 20 July 2023. The matter was then adjourned for the parties to file and serve written closing submissions, and listed for the hearing of closing arguments on Monday, 4 September 2023.
Editor's note 14:
A further hearing for the continuation of closing arguments was listed for 11 October 2023. ASIC filed a Second Further Amended Originating Process and a Second Further Amended Concise Statement on 5 September 2023.
Editor's note 15:
Closing arguments by both parties concluded on 11 October 2023. Judgment was reserved.