It accuses two dealers of offering unlicensed car loans with inflated interest rates
The Australian Securities and Investments Commission (ASIC) has initiated legal action in the Federal Court against Diamond Wheels, Keo Automotive, and a former director, alleging they provided unlicensed car loans at excessively high interest rates.
According to ASIC, Lansvale Motor Group, operated by Diamond Wheels and Keo Automotive, offered loans without proper licensing, with some consumers being charged interest rates nearly double the legal limit. The regulator alleges that these practices resulted in consumers missing out on crucial protections under the National Consumer Credit Protection Act.
ASIC claims that Ken Keomanivong, a former director of Diamond Wheels and current director of Keo Automotive, was directly involved in the alleged misconduct by facilitating and managing the loan arrangements.
“ASIC is concerned that consumers with these loans were significantly overcharged and that their contracts missed key information,” said Sarah Court, ASIC deputy chair, commenting on the filing of the case. “Consumers who apply for loans must be able to understand what they are paying for.
“Ensuring consumers are afforded the protections of the credit legislation remains a priority for ASIC. This is the first civil proceeding we have taken to address lending practices by car dealerships. Car dealers offering finance should be on notice that ASIC is looking closely at how they are operating.”
We are suing south-west Sydney car dealership Lansvale Motor Group and Keo Automotive for allegedly providing unlicensed credit, in many instances charging roughly double the lawful amount of interest https://t.co/clqBaHw5GK pic.twitter.com/tdEtTHhQ7q
— ASIC Media (@asicmedia) September 23, 2024
ASIC is seeking declarations, civil penalties, and injunctions, including an order preventing Keomanivong from participating in credit activities.
Diamond Wheels, trading as Lansvale Motor Group, has been a family-owned dealership in Sydney’s southwest since 1995. Keomanivong served as its director from March 1995 until July 2024 and has been the director of Keo Automotive since August 2019.
Neither Diamond Wheels nor Keo Automotive has ever held an Australian Credit Licence or had proper authorisation to engage in credit activities, ASIC said.
Between September 2018 and November 2019, Diamond Wheels entered into credit contracts for new and used vehicles. From January 2020 onwards, Keo Automotive, through DCP Capital, trading as Keo Finance, provided loan funds for vehicle purchases. Over this period, Diamond Wheels and Keo Automotive facilitated over 600 credit contracts, despite allegedly lacking the necessary licences.
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