Payday lender Nimble Australia will repay $ 1.5 million to more than 7,000 customers after an ASIC investigation raised concerns that it was failing to meet its responsible lending obligations.
- ASIC found failures to properly assess borrowers’ financial situation
- Over 7,000 clients will receive a total of over $ 1.5 million
- Nimble says “no adverse findings” against him
- Four Corners investigated payday loans
The Australian Securities and Investments Commission investigation found that Nimble failed to consistently recognize where consumers had taken repeat loans from payday lenders.
He also found that Nimble did not conduct a proper investigation into the financial condition and needs of borrowers.
Overall, the company’s watchdog found that Nimble was “not meeting its responsible lending obligations.”
ASIC Vice President Peter Kell said this was an important outcome for financially vulnerable clients.
“This remains a high priority area for ASIC, and we expect the industry to continue to improve its game,” he said in a statement.
Nimble solved the problem with ASIC by agreeing to reimburse more than $ 1.5 million to 7,000 affected clients, as well as by making a contribution of $ 50,000 to Financial Counseling Australia.
The payday lender has also agreed to hire an outside compliance consultant to ensure they are following consumer credit laws and will be required to report to ASIC.
“No adverse finding against Nimble”
In a statement, the online and mobile app-based lender said only “a small number of customers” were affected and that it had cooperated with the regulator.
“Nimble quickly identified and resolved these issues,” company chief executive Sami Malia said in a statement.
“They received around 1.2% of the loans taken out during the period from July 1, 2013 to July 22, 2015.
“There was no adverse finding against Nimble.”
Nimble said he would reimburse the fees paid on the affected loans.
Payday lenders under close scrutiny
The industry has come under pressure from the regulator after Four Corners reported widespread irresponsible lending within the industry.
It was also affected by the withdrawal of funding from the four big Australian banks.
The ASIC defines the payday loan as a loan of up to $ 2,000 that must be repaid within 16 days to a year.
Data compiled by ASIC revealed that the payday lending industry lent $ 831 million in fiscal year 2014-2015, with an average loan of $ 568.
The association representing the industry estimates that it has nearly a million customers.
National Credit Providers Association chief executive Phil Johns has said any unscrupulous gamer will not last long.
“Any lender that focuses on sales and not on compliance will be out of business in five years,” he predicted.
“It is clear that under principled legislation, lenders must adopt the most conservative view of the law, not necessarily the rule of law.”
ASIC said its agreement with Nimble states that repayments must be made within six months.
The regulator said any consumer who feels they have taken an inappropriate loan with Nimble should contact the company first, and then the credit and investment ombudsman if they are unhappy with Nimble’s response.