Have you had loans from Sunshine Loans or Cash Loan Money Centre?
If so, you may be entitled to compensation after ASIC expressed concern that these companies had business models designed to avoid Australia’s consumer protections laws, and were charging customers considerably more than the law allows.
ASIC reports that when customers approached a Cash Loan Money Centre for a payday loan, “they were signed up to an arrangement where the consumer ‘sold’ a household item such as a washing machine or fridge to the business, in return for a sum of money, and simultaneously ‘leased’ the goods back from the business. In practice, the goods never changed hands, and the business never actually saw the household goods, or confirmed the current market value before ‘purchasing’ them from the consumer.”
“Similarly, under the model used by Sunshine Loans, a consumer would approach the business for a payday loan, and enter into an agreement to assign the rights to use their mobile phone or car to the lender for a fee, and then simultaneously lease the rights back.”
Consumer Action is encouraging consumers who have entered into one of these ‘lease’ transactions to consider seeking redress.
Consumers can raise a complaint directly with the lender. If a resolution cannot be reached, consumers can lodge a free complaint with the Credit and Investments Ombudsman.
Victorians who would like further advice on the matter should call Consumer Action Law Centre on 9629 6300 or 1800 466 477.
ASIC’s media release on this matter is available here.