media release (22-182MR)

ASIC makes product intervention orders for short term credit and continuing credit contracts


ASIC has made product intervention orders by way of legislative instruments imposing conditions on the issuing of short term credit and continuing credit contracts to retail clients.

Today’s release follows ASIC’s public consultation through Consultation paper 355: Product intervention orders: Short term credit and continuing credit contracts (CP 355) which outlined ASIC proposals to make these orders.

ASIC’s orders, which come into force on Friday 15 July 2022, reinforce consumer protections by prohibiting the provision of short term credit and continuing credit contracts which involve unreasonably high fees charged to retail clients, in excess of the cost caps in the relevant exemptions in subsections 6(1) and 6(5) of the National Credit Code (Code).  

ASIC Commissioner Sean Hughes said ‘ASIC identified significant detriment and harm especially to vulnerable consumers. ASIC has again exercised its powers to prevent borrowers being charged excessive fees to obtain these products.

These intervention orders will protect retail clients from predatory lending practices, and to prevent credit providers charging unreasonable fees in relation to small amounts of credit. This remains an area of concern for ASIC and will remain a priority especially as credit conditions tighten.’  

ASIC continues to monitor the short term credit and continuing credit contracts markets and will take further regulatory and enforcement action as necessary, to address the risk of significant detriment and harm arising from the design and operation of these or similar products.



This action follows previous ASIC’s consultations and action in relation to short term credit and continuing credit contracts.

In July 2019 ASIC released Consultation Paper 316 on the first proposed use of its product intervention powers in relation to significant detriment identified in the short term credit market: 19-177MR. On 12 September 2019 ASIC made a product intervention order by way of a legislative instrument in relation to short term credit: 19-250MR. The order came into force on 14 September 2019.

A judicial review application was filed on 20 September 2019 in the Federal Court of Australia by Cigno Pty Ltd (Cigno) which sought to quash the short term credit order: 19-264MR. In April 2020 the Federal Court dismissed that application with costs awarded to ASIC: 20-089MR. In May 2020 an appeal was filed by Cigno. On 29 June 2021 the Full Federal Court dismissed the appeal and awarded ASIC costs.

In July 2020, ASIC also released Consultation Paper 330 on the proposed use of its product intervention power to address significant detriment identified in the continuing credit industry (20-159MR). In November 2020, ASIC sought further feedback through Addendum to CP 330, after changes were made to the proposed draft order to provide certain exclusions for buy now pay later arrangements and certain fees charged by licensed providers of non-cash payment facilities (20-274MR).

The short term credit product intervention order lapsed in March 2021. ASIC did not seek to extend it or to continue with ASIC’s proposed use of its product intervention powers in relation to the continuing credit industry because of an ambiguity in the product intervention provisions in the Corporations Act 2001.

On 24 June 2021, the Treasury Laws Amendment (2021 Measures No.4) Act 2021 was passed which removed the ambiguity and ensured ASIC’s ability to use its product intervention powers to intervene in relation to the costs of a financial and credit product.

This action continues ASIC’s work to address predatory lending practices in this space.

On 29 September 2020, ASIC commenced proceedings against Cigno and BHF Solutions Pty Ltd (BHF Solutions) seeking declarations and injunctions alleging that both the companies had engaged in unlicensed credit activities in contravention of the National Credit Act in relation to their continuing credit product (20-226MR). On 23 June 2021, the Federal Court dismissed ASIC’s application, finding Cigno and BHF Solutions did not contravene the National Credit Act (21-144MR). ASIC appealed the Federal Court decision in July 2021 (21-179MR).  On 27 June 2022, ASIC was successful in its appeal before the Full Federal Court, which reversed the outcome in the Federal Court in June 2021 (22-158MR).

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