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Tuesday 7 June 2022

22-132MR ASIC sues Sunshine Loans for charging prohibited fees

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.

Last updated: 19/07/2022 12:08