In 2019, ASIC
received a new product intervention power as part of the Federal Government's
response to the Financial
System Inquiry. This power allows ASIC to
intervene, including to ban or set restrictions on financial and
credit products in the interest of consumer protection. This
applies even if there is no demonstrated or suspected breach of any
law, allowing ASIC to address apparent deficiencies in the
statutory law, in the interest of protecting
consumers.
It didn't take long for ASIC to put its new power to use
against unlicensed lenders who sought to circumvent the
National Credit Code on the basis of a technicality.
In September 2019, ASIC targeted an unlicensed lender offering
short term loans which met the Code exemption criteria, but which
were coupled with separate side agreements from a related entity
that provided for the of balance fees and charges as services from
the related entity. Now in August 2020, ASIC again proposes to use
the same
