ASIC extends intervention orders against predatory lenders

ASIC has prolonged its product intervention orders for short-term and continuing credit contracts in a bid to protect vulnerable retail investors.

The orders, which were first implemented in July 2022, will now be extended until 1 October 2032, or until they are revoked.

According to ASIC, these short-term credit and continuing credit contracts were originally aimed at vulnerable retail clients who were facing financial difficulties and needed loans for basic living expenses.

Many of these clients had already been declined for regulated credit. These products charged significant fees, which further burdened them.

"Since the orders came into effect, they have reinforced consumer protections by preventing the provision of short-term credit and continuing credit contracts that involve unreasonably high fees," ASIC said.

"These exceeded the cost caps imposed by the National Credit Code."

As a result, these orders have been effective in reducing the risk of significant harm resulting from these types of products, ASIC added.

ASIC deputy chair Sarah Court said that extending these product intervention orders ensures continued protection in the market against these high-cost lending products.

"Predatory lending practices targeting vulnerable consumers is an ongoing priority of ASIC, and we will continue to intervene to address this type of conduct," she said.