ASIC has issued two infringement notices to credit provider Jacaranda Finance Pty Ltd (Jacaranda) in further action to protect consumers against poor conduct by credit providers.
Jacaranda is a credit licensee that, at the relevant times, offered loans up to $15,000, typically for 12 to 36 months. ASIC was concerned that a repayment estimate calculator on Jacaranda’s website may have been false or misleading because:
- the annual percentage rate used in the calculator was significantly less than the rate that applied to most consumers who entered a credit contract with Jacaranda; and
- the calculator was advertising loans at an annual percentage rate that Jacaranda did not offer.
ASIC Deputy Chair Sarah Court said, ‘ASIC was concerned that consumers were relying on the estimated repayments that the calculator generated when deciding whether to apply for a loan and would use this information to determine whether a loan was appropriate for them. This information was misleading and could have led consumers to apply for a loan that was more costly than they had expected.
‘ASIC will continue to promote the confident and informed participation of consumers in the financial system, by requiring lenders to ensure that the information on their websites accurately reflects the credit product being offered,’ concluded Ms Court.
Jacaranda removed the repayment calculator from its website in September 2022 following commencement of ASIC’s investigation.
Jacaranda paid $26,640 in compliance with the infringement notices on 8 February 2023. Payment of an infringement notice is not an admission of guilt or liability. The specific reasons for ASIC’s concerns are set out in the infringement notices which have been published on the Credit and ASIC Act infringements notices register.
ASIC encourages promoters of financial products and credit products to review ASIC’s Regulatory Guide 234 Advertising financial products and services (including credit): Good practice guidance which provides useful information to help promoters comply with their legal obligations not to make false or misleading statements or engage in misleading or deceptive conduct.
ASIC encourages Australians to shop around when considering loans and credit. ASIC’s Moneysmart website contains information on personal loans and how to repay a loan sooner using the personal loan calculator.