Money3 ordered to pay $1.55m penalty after ASIC action
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The news: The Federal Court has ordered non-bank lender Money3 to pay a $1.55 million penalty for breaching responsible lending obligations.
The context: During the process of providing five car loans entered into between May 2019 and February 2021, Money3 was found to have not made reasonable inquiries about, or verify, each borrower’s living expenses. In one situation, the court found Money3 did not make reasonable inquiries about the borrower’s requirements and objectives for the loan.
ASIC began proceedings against Money3 in May 2023. Costs will be determined at a future date.
Money3 Loans is a subsidiary of Solvar.
What they said: “This penalty reflects the contraventions the Court found in relation to Money3’s misconduct,” ASIC chair Joe Longo said.
“Responsible lending cases like this one are challenging but important to take on, given the seriousness of the allegations raised by consumer advocates and the alleged impacts on individuals involved,” he said.
Justice McElwaine said the matters “justify significant pecuniary penalties as a specific deterrent to Money3 to ensure that they are not repeated, but also generally so that all licensees understand the importance of the inquiry and verification steps”.
Solvar CEO and managing director Scott Baldwin said in a statement to the ASX that the company respects the decision of the Federal Court.
“Since the period in question Money3 has invested further in governance, complaints, hardship and underwriting practices lifting group capabilities and setting a stronger foundation from which to grow,” he said.
“Money3 remains committed to providing finance for under serviced consumers typically enabling them access to a used vehicle improving their ability to participate in society.”
The sources: ASIC media release, ASX
