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Thursday 13 April 2017

17-115MR Book up provider in South Australian Indigenous community ordered to pay $167500 for exploitation of consumers

The Federal Court has today fined Mr Lindsay Gordon Kobelt $167500 for engaging in unconscionable and unlicensed conduct.

Mr Kobelt is the owner and operator of Nobby's Mintabie General Store (Nobby's) in the Anangu Pitjantjatjara Yankunytjatjara Lands (APY Lands) in remote South Australia.

Mr Kobelt provided a form of credit known as 'book up', which allows the customer to buy goods now and pay for them later. Book up is generally an informal arrangement with no set repayment dates or formal documentation. Book up is commonly used in Indigenous communities such as the APY Lands and can play a useful role in certain communities. However, ASIC was concerned that Nobby's book up practices were exploitative as consumers were required to provide their debit cards, PINs and details of their income to Mr Kobelt, who then used the information and cards to withdraw all or nearly all of the customer’s money from their bank account on or around the day they were paid.

On 10 November 2016, the Court found that:

  • Mr Kobelt's system of providing book up was unconscionable; and
  • Mr Kobelt had engaged in unlicensed credit activity when selling motor vehicles on book up (refer: 16-383MR).

On 13 December 2016, the Court made injunctive orders requiring, amongst other things, that Mr Kobelt return all the debit cards in his possession to officers of ASIC who arranged for the return of these cards to affected customers.

ASIC Deputy Chairman Peter Kell said, 'The penalty awarded by the Federal Court should serve as a warning to all those in the credit industry that this kind of exploitation of financially vulnerable consumers has serious consequences.'  

'ASIC is continuing to work with book up providers and Indigenous communities to ensure that all consumers are treated fairly. Behaviour that is unscrupulous or illegal will not be tolerated.'

In handing down today's penalty finding, Justice White said: "Mr Kobelt engaged in the conduct over a long period of time and was, when doing so, pursuing his own personal interests. His unconscionable system has been the means by which he has derived considerable financial profit."

The matter is the subject of an appeal lodged by Mr Kobelt in January 2017. A hearing date for the appeal has not yet been confirmed.


ASIC issued proceedings against Mr Kobelt in May 2014 (refer: 14-119MR). The matter was heard between 9 June 2015 and 2 July 2015.

This action came as a result of work by ASIC's Indigenous Outreach Program (IOP), which is staffed by lawyers and analysts, the majority of whom are Indigenous. The IOP gathers intelligence from Indigenous consumers and their advocates, undertakes surveillance, implements targeted financial literacy programs and works with industry to improve access to appropriate products and services.

Other outcomes affecting Indigenous consumers coming as a result of the work of ASIC and the IOP include:

Money tips for Aboriginal and Torres Strait Islander people can be found here on ASIC's MoneySmart website.

ASIC also offers a dedicated help line to assist Indigenous consumers with financial issues (Phone: 1300 365 957).

Editor's note

Mr Kobelt's appeal against the judgment of the Federal Court given on 13 December 2016 is listed to be heard on 14 and 15 August 2017.

Editor's note 2:

On 14 and 15 August 2017, the appeal was heard by the full Federal Court. The decision has been reserved.

Editor's note 3:

On 15 February 2018, the Full Federal Court handed down its decision, partially allowing Mr Kobelt's appeal. (Refer: 18-047MR).

Editor's note 4:

On 20 March 2018, ASIC applied to the High Court of Australia for special leave to appeal from the orders made by the Full Court on 20 February 2018. On 17 August 2018, the High Court of Australia granted special leave to ASIC to appeal from the orders made by the Full Court on 20 February 2018. A date for the hearing of the appeal is yet to be set.

Last updated: 20/08/2018 02:49