ASIC has ordered that Coral Coast Distributors (Cairns) Pty Ltd can no longer sign-up customers into Centrepay credit arrangements in its Urban Rampage stores. The decision comes after ASIC found that those arrangements were unsuitable for consumers in Coral Coast’s target market because they were unlikely to be consistent with their financial situation and placed them at risk of financial hardship.

ASIC Commissioner Alan Kirkland said, “Coral Coast targeted First Nations consumers who received Centrelink payments. After entering into Centrepay credit arrangements at Urban Rampage stores, many of these consumers found themselves without money to pay for essentials. It is unacceptable for businesses to use credit-like facilities in a way that places vulnerable customers into hardship.

“This is ASIC’s first final stop order under the design and distribution obligations regime. Other businesses that use this model should reflect on this decision and consider whether their own practices comply with the law. Addressing harm impacting First Nations Australians is a key priority for ASIC and we continue to work closely with financial counsellors and advocates in regional and remote communities to understand the challenges those communities face. Where ASIC sees conduct that places First Nations consumers at risk of financial harm, we will act to stop it,” concluded Mr Kirkland.

ASIC made the stop order on 24 April 2024.

Background

On 22 February 2024, ASIC made an interim stop order preventing Coral Coast from entering new agreements to pay for goods on credit via Centrepay. The stop order was initially in place for 21 days, before being extended while an ASIC delegate made a final determination.

Coral Coast operates 10 Urban Rampage stores in regional and remote locations across Western Australia, the Northern Territory and Queensland, selling household items.

Coral Coast offers credit through deferred deduction arrangements via Centrepay so it must comply with design and distribution obligations (DDOs) administered by ASIC. DDOs require firms to design financial products, including credit facilities, that meet the needs of consumers, and to distribute those products in a manner that is consistent with the target market. Coral Coast is required to publish a target market determination (TMD) for the credit facility it offers to customers, which involves repayments for goods purchased at its stores by deductions from customers’ Centrelink benefits via Centrepay.

Services Australia is responsible for administering the Centrepay program, including the register of approved businesses. Services Australia has suspended Coral Coast from entering any new credit arrangements involving Centrepay or extending existing Centrepay credit arrangements.

ASIC's Indigenous Outreach Program works across ASIC to provide advice, insights and support to ensure ASIC’s engagement with First Nations peoples is culturally appropriate and sensitive.

First Nations consumers can contact ASIC’s Indigenous Outreach Program on our dedicated Indigenous Helpline on 1300 365 957.

Mob Strong Debt Helpline on 1800 808 488 can assist if you are experiencing financial hardship.

ASIC’s Moneysmart website has further information on managing money for First Nations consumers.

Editor's note:

On 30 April, Coral Coast applied to the AAT for review of ASIC’s decision to issue the final stop order. Coral Coast also applied for a stay of the final stop order decision.

The stay application is listed for a hearing on 3 June 2024.

Editor's note 2:

A decision on the stay application will be delivered on a date to be fixed.

Editor's note 3:

On 12 June 2024, the AAT dismissed Urban Rampage's application for a stay of ASIC's stop order. Read the AAT's reasons for decision.

Editor's note 4:

On 25 June, the matter was listed for a final hearing from 4 to 13 December 2024.

Editor's note 5:

The previous final hearing date of 4 December has been vacated. A new final hearing date has been listed for 30 January (8 days).

Editor's note 6:

The final hearing date of 30 January has been vacated. A new final hearing date has not been listed. A directions hearing has been listed for 7 July 2025.