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20-183MR ASIC commences action against GoGetta Equipment Funding Pty Ltd for unlicensed consumer leasing
ASIC has today commenced civil penalty action in the Federal Court of Australia against Queensland-based GoGetta Equipment Funding Pty Ltd (GoGetta) for unlicensed conduct.
ASIC alleges that:
- Between 30 April 2015 and 9 December 2016, GoGetta entered into ten rental agreements with consumers who hired the motor vehicles wholly or predominantly for a personal, domestic or household purpose
- GoGetta did not obtain a declaration from any of the consumers that the vehicle was hired for business purposes
- Each rental agreement was a ‘consumer lease’ to which Part 11 of the National Credit Code (Sch 1 to the National Credit Act) applied, and
- GoGetta contravened the National Credit Act because it did not hold a licence under that Act authorising it to enter into the rental agreements and charge the consumer fees under those agreements.
GoGetta’s conduct meant that consumers were not afforded the consumer protections available under the National Credit Act, including the right to access hardship assistance and to make a complaint to an external dispute resolution (EDR) scheme.
ASIC’s action also includes the acceptance of a Court Enforceable Undertaking (CEU) from SIV Capital Ltd and GoGetta to ensure remediation of affected consumers.
ASIC is seeking pecuniary penalties against GoGetta for contravening:
- Section 29 of the National Credit Act, the prohibition against engaging in credit activities without a credit licence, and
- Section 32 of the National Credit Act, the prohibition against charging a fee from a consumer when engaging in an unlicensed credit activity.
The maximum penalty for a single contravention of each of sections 29 and 32 of the National Credit Act prior to 30 July 2015 was $1,800,000 and prior to 30 June 2017 was $2,100,000.
The first case management hearing is yet to be listed by the Court.
Court Enforceable Undertaking and remediation program
GoGetta is a subsidiary of SIV Capital Ltd (formerly Silver Chef Ltd).
ASIC has also accepted a CEU from GoGetta and SIV Capital Ltd admitting that GoGetta contravened sections 29 and 32 of the National Credit Act on multiple occasions from 1 July 2014.
The CEU requires SIV Capital Ltd and GoGetta to implement a remediation program to compensate customers who entered into a consumer lease for a motor vehicle with GoGetta from 1 July 2014.
SIV Capital Ltd and GoGetta will automatically remediate approximately 207 customers who are at high risk of having entered into a consumer lease, in the amount of around $1.9 million.
All other affected customers, from a pool of over 5,000 customers, will be contacted or invited to have their circumstances reviewed to participate in the remediation program. SIV Capital Ltd has provisioned over $5 million for consumer remediation.
GoGetta will also remove default listings and waive any arrears on affected rental agreements. The remediation program will be overseen by an independent remediation consultant who will periodically report to ASIC on its progress and GoGetta and SIV Capital Ltd’s compliance with the program.
Under the CEU, GoGetta will become a member of the Australian Financial Complaints Authority (AFCA) until completion of the remediation program. If consumers are not satisfied with the remediation offered to them, they can lodge a complaint with AFCA.
The remediation program will be free of cost. GoGetta and SIV Capital Ltd will manage the remediation program and more information will be made available on the GoGetta website at gogetta.com.au.
SIV Capital Ltd is a business equipment finance company.
GoGetta acquired assets, such as engineering equipment, with the intention of making a profit by leasing the assets for business purposes.
This matter came to ASIC’s attention after receiving complaints from GoGetta customers, including through Legal Aid organisations representing vulnerable and disadvantaged consumers
GoGetta ceased accepting applications for motor vehicle leases from 6 October 2017 and has not entered into any new motor vehicle leases from 28 February 2018. On 28 February 2018, SIV Capital announced its decision to exit its entire GoGetta asset financing business and to run-down the GoGetta business.
SIV Capital Ltd sold its hospitality business on 3 December 2019 but has provisioned for customer remediation.
The first case management hearing has been listed for Friday 28 August 2020.
Editor's note 2:
On 7 September 2020, orders were made regarding the timetable of the matter. The matter is scheduled for a further case management conference on 22 October 2020.
Editor's note 3:
On 5 November 2020 Her Honour Davies J made orders for the timetable of the proceeding. The matter has been set down for hearing on liability and penalty on 7 and 8 April 2021.
Editor’s note 4:
On 7 April 2021 the hearing in relation to liability and penalty proceeded before Her Honour Justice Davies in the Federal Court of Australia. Her Honour has reserved her decision.
Editor's note 5:
On 4 October 2021, the GoGetta remediation program was finalised. GoGetta remediated 926 affected consumers by providing a total of $10,529,520.92 in remediation payments, arrears and future contractual payment waivers.