The Australian Securities and Investments Commission (ASIC) has issued a warning to payday lenders, raising concerns about potential breaches of consumer protection laws. Following a recent review, ASIC indicated that some lenders may not be adequately safeguarding borrowers with small loans. The core issue revolves around lenders potentially entering unsuitable contracts with consumers and failing to properly identify and target appropriate markets for their loan products. This oversight could expose vulnerable individuals to financial risk and hardship.
ASIC’s review revealed a troubling trend where some lenders might be steering consumers towards alternative credit options, some of which carry significantly higher risks. The watchdog emphasized its disappointment in discovering this practice, highlighting the need for stricter adherence to responsible lending practices.
