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.