ASIC has accepted a Court Enforceable Undertaking (CEU) from Northern Territory-based pawnbroking business Lend NT Pty Ltd and its sole director Laddawan Te Maro after investigating concerns Lend NT was engaging in unlicensed credit.

Lend NT and Ms Te Maro admitted that Lend NT contravened sections 29 and 32 of the National Credit Act by providing Drive Away Loans to consumers.

Drive Away Loans were set up as pawnbroking arrangements. Consumers provided their motor vehicle as security for a Drive Away Loan but were permitted to retain their motor vehicle during the Drive Away Loan term. This meant that Lend NT was not operating within the scope of its pawnbroking license, and therefore the Drive Away Loans were not exempt from regulation under the National Credit Act.

Consumers were also not afforded the consumer protections available under the National Credit Act, including the right to access hardship assistance and to make a complaint to the Australian Financial Complaints Authority.

The CEU requires Lend NT and Ms Te Maro to implement a remediation program. The program applies to all consumers who entered a Drive Away Loan and will compensate 58 customers with approximately $49,685 in redress, consisting of remediation payments which include a refund of prohibited fees, charges and interest charged.

The program will be overseen by a remediation consultant who will report to ASIC on its progress and Lend NT’s compliance with it.

ASIC Deputy Chair Sarah Court said, 'ASIC considers Lend NT failed to comply with the requirements of the credit laws. We are encouraged that Lend NT has recognised that it engaged in unlicensed credit conduct and has agreed to the program that will see affected consumers compensated.’

While consumers will be invited by Lend NT to participate in the remediation program, consumers who think they might have been affected by Lend NT’s conduct are encouraged to immediately register for the program by calling or emailing Lend NT using the details below.

Consumers can find useful information on financial counselling and how to manage finances by visiting ASIC's Moneysmart website.

Additional information

Court enforceable undertakings register

Background

This matter came to ASIC’s attention in July 2023 after receiving a complaint from a financial counselling organisation based in the Northern Territory.

Lend NT provided DA Loans between 10 September 2019 and 13 January 2024. The maximum amount lent under a DA Loan was $8,000 over a two-year term, with interest calculated and charged at 2.5% per week (130% pa). Consumers would provide their motor vehicle as security for the DA Loan pursuant to a Pawn Ticket but were permitted to keep their motor vehicles during the term of the DA Loan, with a GPS tracker attached.

The Remediation Program

The program is free for all consumers who entered a DA Loan.

Lend NT will proactively contact affected consumers. Consumers can also get more details about the program by contacting Lend NT:

• Telephone: +61 8 8924 2600 from 8:30am to 5:00pm, Monday to Friday (excluding public holidays ACST)
• Fax: +61 8 8941 0012
• Email: staborada@huntnt.com.au
• Address: C/-Hunt & Hunt Lawyers, GPO Box 3645, Darwin NT 0801

Consumers can choose to participate in the program. If consumers are not satisfied with the remediation offered, they may be eligible for free legal assistance from a community legal agency (Community Legal Centres Australia) or they can contact a financial counsellor (Financial Counselling Australia) for free financial counselling regarding their concerns.

ASIC’s unlicensed credit work

ASIC has a particular focus on unlicensed credit across the credit industry as these are key consumer protection provisions. This includes preventing lenders from unlawfully attempting to exploit exemptions in the National Credit Code like the pawnbroking exemption, to avoid credit from being regulated to the disadvantage of vulnerable consumers. Some outcomes are listed below:

• ASIC commenced civil penalty action against Gogetta Equipment Funding Pty Ltd (GoGetta) for unlicensed credit conduct. ASIC also accepted a CEU from GoGetta to remediate affected consumers. On 4 October 2021, the GoGetta remediation program was finalised. GoGetta remediated 926 affected consumers by providing a total of $10,529,520.92 in remediation payments, arrears and future contractual payment waivers (20-183MR).
• In April 2023, Cash Lender Pty Ltd’s (Cash Lenders) and its former director were charged in relation unlicensed credit activities by issuing pawn tickets which were in fact credit contracts as they allowed Cash Lenders to take debt recovery action against consumers for any unpaid debt(23-100MR).
• Cigno Pty Ltd (Cigno) and BHF Solutions Pty Ltd (BHF Solutions) were found to have engaged in unlicensed conduct. ASIC successfully took action against Cigno and BHF Solutions, with the Federal Court finding that both companies engaged in credit activities without holding an Australian credit licence (23-188MR).
• ASIC wins Federal Court case against Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) for providing ‘No-Upfront Charge Loans’. The Court found that Cigno Australia and BSF Solutions engaged in credit activity without an Australian credit licence and charged consumers prohibited fees. The directors of the companies were also found to have been involved in the unlicensed activity and other Credit Act breaches (24-111MR).
• In September 2024, ASIC sued Diamond Wheels Pty Ltd, Keo Automotive and a former director in the Federal Court for allegedly providing unlicensed car loans to consumers, many of whom paid an excessive interest rate. The matter is ongoing (24-209MR).

In September 2022, ASIC published Regulatory Guide 277 Consumer remediation (RG 277). This guide sets out our guidance on review and remediation conducted by Australian financial services (AFS) licensees and Australian credit licensees. The aim is to provide a clear consumer-centred remediation framework for licensees to apply and key principles for conducting a remediation effectively, honestly, and fairly. It does not expressly apply to entities that engage in unlicensed activities, but it may provide some useful guidance in the event of unlicensed credit activities.