Fed Court decision final ‘nail in the coffin’ for predatory lenders Cigno Australia Pty Ltd and BSF Solutions Pty Ltd
Consumer Action Law Centre is delighted the Federal Court has issued a strong decision that calls out Cigno Australia Pty Ltd, BSF Solutions Pty Ltd and two of the entities’ directors for exploiting loopholes in the credit laws and providing predatory – sometimes harmful – loans to consumers.
Consumer Action CEO Stephanie Tonkin said she was hopeful the decision, which finds the companies and its directors contravened the Credit Act, will be the final ‘nail in the coffin’ for two of the country’s worst predatory loan providers.
Cigno Australia Pty Ltd (Cigno) and BSF Solutions Pty Ltd (BSF) have operated in and exploited the fringes of regulation for years with business models designed to get around important consumer protections. This is not the first legal action that ASIC has had to take to stop the harms caused by the business’ (or related businesses’) activities.
“We consistently hear from the people harmed by these companies’ activities, and the impacts – like families forced to skip on meals to pay eye-boggling fees- are shocking,” Ms Tonkin said.
“I honestly hope these businesses are finally shut down for good, and any future plans to skirt regulation are stopped.”
The Federal Court ordered that Cigno and BSF be ‘permanently restrained’ from demanding, receiving or accepting fees, charges, or other amounts from consumers (including the “Late Payment Fee”) from July 2022 to 3 October 2023. The entities entered into agreements with 150,112 consumers during that period.
The decision is significant also because it bans BSF director Brenton James Harrison and Cigno director Mark Swanepoel from the companies’ activities and makes an ‘adverse publicity order’ to inform impacted consumers of the Court orders implemented.
Consumer Action provides a free online tool to help people stop paying their loans to Cigno.
The Cigno and BSF ‘No Upfront Charge Loan Model’ provided short-term credit to more than 100,000 consumers between July 2022 and December 2022 and continued to charge substantial fees to those consumers without either entity holding an Australian credit licence.
Under those contracts, Cigno and BSF charged fees in excess of $70 million. Some affected consumers were charged fees of more than 600% of their total loan amount.
ENDS
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au
