media release (24-209MR)

ASIC sues south-west Sydney car dealership for alleged unlicensed lending

Published

ASIC has commenced proceedings in the Federal Court against Diamond Wheels, Keo Automotive and a former director for allegedly providing unlicensed car loans to consumers, many of whom paid an excessive interest rate.

ASIC alleges Lansvale Motor Group (operated by Diamond Wheels Pty Limited) and Keo Automotive Pty Ltd offered unlicensed car loans with principal, interest and other fee payments. In many instances, ASIC is concerned consumers were charged roughly double the amount of interest that could lawfully be charged.

ASIC also alleges Ken Keomanivong was involved in the contraventions by Diamond Wheels and Keo Automotive as he played a central role in arranging and administering the loans.

ASIC alleges this conduct resulted in consumers being denied important protections under the Credit Act.

ASIC Deputy Chair Sarah Court said, ‘ASIC is concerned that consumers with these loans were significantly overcharged and that their contracts missed key information. Consumers who apply for loans must be able to understand what they are paying for.

‘Ensuring consumers are afforded the protections of the credit legislation remains a priority for ASIC. This is the first civil proceeding we have taken to address lending practices by car dealerships. Car dealers offering finance should be on notice that ASIC is looking closely at how they are operating.’

ASIC seeks declarations, civil penalties and injunctions for the alleged contraventions, including injunctions against Ken Keomanivong preventing him from being involved in credit activities.

Background

Diamond Wheels, trading as Lansvale Motor Group, is a well-known and relatively large new and used car dealership located on the Hume Highway in the south-west of Sydney. Diamond Wheels has been a family run business since around 1995.

Ken Keomanivong was a director of Diamond Wheels from March 1995 to July 2024. He has been a director of Keo Automotive since August 2019.

Neither Diamond Wheels nor Keo Automotive has ever held an Australian Credit Licence, nor been effectively authorised to engage in credit activities.

Between at least 24 September 2018 and 17 November 2019, Diamond Wheels entered into credit contracts with consumers for new and used vehicles. From 21 January 2020, DCP Capital Pty Ltd (DCP Capital), trading as Keo Finance, entered into credit contracts with consumers but the loan funds were provided by Keo Automotive. Between 24 September 2018 and 5 December 2019, Diamond Wheels received payments in relation to approximately 271 credit contracts, and between 6 December 2019 and 30 April 2024 Keo Automotive received payments in relation to approximately 335 credit contracts.

Downloads

Concise statement (PDF 1 MB)

Originating application (PDF 412 KB)

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