The regulator invites stakeholders to comment until Aug. 31
The Australian Securities and Investments Commission is seeking public feedback on product intervention orders designed to stop predatory lenders.
ASIC has recently released Consultation Paper 371, titled "Product intervention orders: Short term credit facilities and continuing credit contracts" (CP 371), seeking feedback on proposals to extend the existing product intervention orders.
The current product intervention orders, which were implemented on July 15, 2022, aim to safeguard consumers by prohibiting the provision of short-term credit and continuing credit contracts that involve unreasonably high fees charged to retail clients. These fees surpass the cost caps set by the National Credit Code, ASIC said in a news release.
Unless extended, the product intervention orders for short-term credit and continuing credit contracts are set to expire on Jan. 15, 2024.
The consultation paper presents the regulator’s analysis of the impact of the existing product intervention orders for short term credit and continuing credit contracts. According to ASIC, these orders have proven effective in mitigating the risk of significant harm to retail clients arising from the issuance of these products in conjunction with high cost services.
ASIC is inviting stakeholders to provide feedback on the paper until 5 pm on Aug. 31.
The regulator body will continue to monitor the markets for short term credit and continuing credit contracts and will take appropriate regulatory action as deemed necessary.
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This consultation builds upon previous actions and consultations conducted by ASIC concerning short-term credit and continuing credit contracts.
On Dec. 9, 2021, ASIC published Consultation Paper 355, titled "Product intervention orders: Short term credit and continuing credit contracts" (CP 355), which outlined proposals for the short-term credit product intervention order and the continuing credit contracts product intervention order.
On July 15, 2022, ASIC implemented the product intervention orders for short-term credit and continuing credit contracts. The regulator found that these products had resulted in, and were likely to result in, significant harm to retail clients when provided alongside high-cost services.
Last month, ASIC announced it was taking action against a property investment group for allegedly operating multiple unlicensed investment schemes.
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