Pay day lender Nimble, which advertises “smart little loans” to customers at high interest rates, must refund more than $1.5 million to at least 7000 customers following a major investigation by the Australian Securities and Investments Commission (ASIC).
ASIC identified “significant deficiencies” in Nimble’s compliance with the responsible lending laws when providing loans of short duration to consumers.
Nimble has previously come under fire for its “fluffy” advertising targeted primarily at young people, with confusion surrounding the conditions of the short-term loans.
ASIC’s investigation found Nimble had not properly assessed the financial circumstances of consumers before providing them loans, and “failed to recognise” where consumers had obtained repeat loans.
The company also “failed to make proper inquires” of consumers’ requirements and objectives, and inquiries that were made were of a general nature and resulted in not enough information for Nimble to fully understand the consumer's needs.
ASIC deputy chair Peter Kell says this is a significant outcome for financially vulnerable consumers.
“This outcome is a further example of ASIC's strong focus on the payday lending sector, Kell says. "This remains a high priority area for ASIC, and we expect the industry to continue to lift its game."
In addition, Nimble is required to make a $50,000 contribution to Financial Counselling Australia and engage an independent external compliance consultant to review their current business operations, as part of the ASIC undertaking.
In a statement, Nimble chief executive Sami Malia said the company “regrets any inconvenience” to affected consumers and has worked with ASIC to fix the issues through system enhancements.
“Nimble has identified and promptly resolved these issues, Malia says. "They affected around 1.2 per cent of loans written during the period from 1 July 2013 to 22 July 2015."
“These application assessment issues were entirely unintended and were resolved in collaboration with ASIC. There has been no adverse findings against Nimble.”
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