Following a significant ASIC investigation, payday lender Nimble Australia Pty Ltd (Nimble) will refund over 7,000 customers more than $1.5 million after ASIC had concerns that Nimble was failing to meet its responsible lending obligations.
ASIC identified significant deficiencies in Nimble’s compliance with the responsible lending laws when providing loans of short duration to consumers.
ASIC’s probe found that:
- Nimble had not properly assessed the financial circumstances of many consumers before providing them with loans. Nimble relied on algorithms which did not properly take consumers’ financial information into account.
- Nimble failed to consistently recognise where consumers had obtained repeat loans from payday lenders within a short period of time. Even where repeat loans were properly identified, Nimble did not take sufficient or appropriate steps as required by law before providing a loan to the consumer.
- Nimble failed to make proper inquiries of consumers’ requirements and objectives, and inquiries that were made were of a general nature and resulted in not enough information for Nimble to fully understand the consumer’s needs.
‘This is a significant outcome for financially vulnerable consumers,’ said ASIC Deputy Chair Peter Kell.
‘This outcome is a further example of ASIC’s strong focus on the payday lending sector. This remains a high priority area for ASIC, and we expect the industry to continue to lift its game.’
As part of its undertaking to ASIC, Nimble is required to:
- pay more than 7,000 consumers in excess of $1.5 million through a consumer remediation program overseen by Deloitte Touche Tohmatsu;
- make a $50,000 contribution to Financial Counselling Australia; and
- engage an independent external compliance consultant to review their current business operations and compliance with the consumer credit regime and report back to ASIC.
Consumers should expect to be contacted shortly as the remediation process must be completed within six months.
ASIC encourages all participants in the consumer credit industry to take note. All credit licensees need to consider the individual situation of each borrower. Further, automated processes need to be rigorously and continually tested to ensure that the licensee who uses them is complying with their responsible lending obligations.
Consumers who believe that they entered into an unsuitable loan with Nimble are encouraged to contact Nimble in the first instance. If they are not satisfied by Nimble’s response, consumers can lodge a complaint with the Credit and Investments Ombudsman. ASIC’s MoneySmart website has useful guidance on how payday loans work and alternative credit options.
ASIC acknowledges that Nimble has made significant changes to their system and processes since the ASIC investigation commenced.
Download the Enforceable Undertaking
