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Payday lender Nimble forced to refund $1.5m to customers

Wednesday, 23 Mar 2016 08:12:12 | Thuy Ong And Michael Janda

A Nimble advertisement for small payday loans (YouTube: Nimble Money)

Payday lender Nimble Australia will refund $1.5 million to more than 7,000 customers after an ASIC investigation raised concerns it did not meet responsible lending obligations.

ASIC's probe found that Nimble failed to consistently recognise where consumers had taken out repeat loans from payday lenders, and failed to make proper inquiries about borrowers' financial circumstances and needs.

The corporate watchdog found Nimble was "failing to meet its responsible lending obligations".

ASIC's deputy chair Peter Kell said it is a significant outcome for financially vulnerable customers.

"This remains a high priority area for ASIC, and we expect the industry to continue to lift its game," he said in a statement.

Nimble settled the matter with ASIC by agreeing to refund in excess of $1.5 million to 7,000 affected customers, as well as making a $50,000 contribution to Financial Counselling Australia.

The payday lender also agreed to engage an external compliance consultant to ensure that it complies with consumer credit laws, and will have to report back to ASIC.

'No adverse findings against Nimble'

In a statement, Nimble said only a "small number of customers" were affected, and it has cooperated with the regulator.

"Nimble has identified and promptly resolved these issues," said the company's chief executive Sami Malia in a statement.

"They affected around 1.2 per cent of loans written during the period from 1 July 2013 to 22 July 2015.

"There have been no adverse findings against Nimble."

Nimble said it will refund fees paid on the affected loans.

Payday lenders under heavy scrutiny

The sector has been under pressure from the regulator after Four Corners reported on widespread irresponsible lending within the sector.

It has also been hit by the withdrawal of funding from Australia's big four banks.

ASIC defines payday lending as a loan of up to $2,000 that must be repaid within 16 days to one year.

External Link: Nimble is known for its quirky ads

Data compiled by ASIC found the payday lending industry loaned $831 million in the 2014-15 financial year, with an average loan size of $568.

ASIC said its agreement with Nimble stipulates that the refunds must be completed within six months.

The regulator said any consumers who feel they entered into an unsuitable loan with Nimble should contact the company in the first instance and then the Credit and Investments Ombudsman if they are unsatisfied with Nimble's response.

AustraliaPlus


 

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