A broker will refund $477,900 to 2000 consumers after the corporate regulator found it had charged consumers a brokerage fee when it was not allowed to.
Fast Easy Loans, which acted as a broker to lender Easy Finance Loans, was found to have unlawfully charged customers a brokerage fee that was over certain state and territory interest rate caps.
The Australian Securities and Investments Commission found this meant Fast Easy Loans had carried out credit activities without a credit licence.
Fast Easy and Easy Finance ran under a business model where consumers interacted with both a broker and a payday lender simultaneously, with the entities having the same owners, directors and premises.
They used this model in order to be able to charge consumers an amount in excess of state and territory interest rate caps.
But ASIC deputy chairman Peter Kell said ASIC will work to prevent such a business model where consumers are over charged.
“Our message to the industry and those who advise payday lenders is clear; if you set up business models to avoid the small amount loan cap, ASIC will take action,” Kell said.
Fast Easy agreed to refund affected consumers in Queensland, New South Wales, and the Australian Capital Territory any amount paid in brokerage fees above the interest rate caps of 48 per cent by November.
