The Australian Securities and Investments Commission (ASIC) said Thursday that it has filed civil penalty proceedings against Ausfinancial Pty Ltd, trading as Swoosh Finance, in the Federal Court.
Swoosh Finance: ASIC Alleges Breach of Responsible Lending Obligations
ASIC alleges the lender breached responsible lending obligations and failed to comply with design and distribution obligations (DDO).
According to ASIC, Swoosh entered loans with 11 consumers between October 2019 and October 2024 without adequately assessing their financial circumstances.
ASIC claims many of these borrowers faced financial difficulties, with signs of distress such as negative bank balances, credit defaults, and frequent use of wage advance services.
ASIC Deputy Chair Sarah Court criticised Swoosh’s alleged failures, stating, “ASIC alleges Swoosh failed to properly inquire about, and verify, the consumers’ financial situations before offering them a credit contract.
“Many of these borrowers were in challenging socio-economic circumstances and were experiencing financial difficulties. Some of them had frequently used early wage advance services, had multiple existing loans and buy-now/pay-later commitments, and many showed clear signs of financial distress.”
Loans are said to have ranged between $2,000 and $3,000, secured against vehicles, and attracted high fees, including upfront charges of over $400 and annual interest rates of 47%.
ASIC adds that there were further fees imposed on borrowers who defaulted.
Additionally, ASIC says Swoosh failed to review its target market determinations and continued to offer loans despite rising customer complaints.
ASIC stressed the need for ongoing compliance with DDO requirements. They warned that failure to review and update target market determinations could result in significant penalties.
