Lender accused of charging ‘exorbitant’ fees received $ 20 million loan from company chaired by former Brisbane mayor | Consumer rights
An investment group chaired by former Brisbane mayor Sallyanne Atkinson has already funded a payday loan deal, BHF Solutions, which the business regulator accused of charging shockingly high fees.
Skybound Fidelis Investment loaned $ 20 million to Gold Coast-based lender BHF Solutions in July of last year, the Australian Securities and Investments Commission said in a lawsuit filed in federal court on Wednesday. Skybound said the loan has been repaid and that it has no ongoing relationship with BHF.
In the lawsuit, the regulator accuses BHF and another Gold Coast company, Cigno, of breaking the law by granting unlicensed credit in arrangements in which customers were required to pay fees totaling up to six times the amount borrowed.
Cigno, which used a business model Asic has previously tried to ban, raised $ 78 million in fees from borrowers between September last year and August this year, Asic said in a statement filed with the borrowers. court.
Cigno, which boasts of offering “emergency cash” loans, is controlled by former rugby union player Mark Swanepoel and owned by members of the Swanepoel family.
Atkinson, an eminent Queensland The liberal, who served as Brisbane’s first female mayor, told Guardian Australia Skybound was no longer involved with BHF or Cigno, but that she did not remember when the relationship ended.
“This loan has been repaid and we no longer have a relationship with them, not because there is something wrong with them, but because everything has been repaid,” she said.
Skybound Managing Director Dean Palmer said in an email: “Please note that Skybound Fidelis no longer provides loan financing to, and has no ongoing relationship with, BHF or Cigno.”
BHF and Cigno have been contacted for comment.
Asic’s lawsuit in federal court is the second time the regulator has tried to shut down companies like Cigno.
In September last year, he used new product intervention powers to ban a deal in which, at the same time as taking out a loan, a borrower agreed to pay a large introductory fee to a company. related company – the business model used at the time by Cigno.
Cigno challenged the ban in federal court but lost. He has appealed the judgment, a hearing to be held in November.
In the lawsuit filed on Wednesday, Asic said Cigno adopted a new business model after the regulator banned the old one.
Cigno now refers potential borrowers to BHF, which is an independent company controlled by Gold Coast man Brenton Harrison.
Asic claims that the fees Cigno charges its tens of thousands of customers exceed the maximums allowed by law.
These fees, which are charged on loans as low as $ 50, include an “account maintenance fee” of $ 5.95 per week and a fee of $ 79 if repayments are not made on time.
He reported that a client who borrowed $ 350 was charged $ 471.30 in fees, while another who borrowed $ 50 was charged $ 300 in fees after defaulting on the loan. .
Consumer Action Law Center Managing Director Gerard Brody welcomed Asic’s latest action against Cigno.
“We are delighted to see Asic take this important step to enforce existing consumer credit protections and prevent Cigno and BHFS from causing further damage by using this unethical lending model,” he said. -he declares.
“Although loans are usually only for small amounts, they impose exorbitant fees that leave some people supposed to owe amounts many times the value of the original loan, in a matter of months. “