ASIC Report – Payday Lenders

ASIC has released Report 805 – Falling Short: Compliance with the small amount credit contract obligations. This report summarises ASIC's observations from its review of lenders issuing small amount credit contracts (SACCs). ASIC commenced the review in light of the changes to the law in 2022 and 2023 under the Financial Sector Reform Act 2022 (FSR Act).

ASIC's key concerns related to providers of SACCs not meeting their obligations by:

• Entering into SACCs that were unsuitable for the consumer;
• Failing to identify an appropriate target market and distribute products within that target market.

ASIC remains concerned about any signs that SACC lenders may be using business models designed to avoid the addition requirements the FSR Act imposes on SACCs.