ASIC has acknowledged the recent payment of $60,000 by Capitalcorp Finance and Leasing Pty Ltd (Capitalcorp) to the Indigenous Consumer Assistance Network (ICAN). Capitalcorp made the payment as part of a package of solutions in response to concerns raised by ASIC.

ASIC examined approximately 130 personal loans arranged by Capitalcorp for Indigenous borrowers living primarily in remote locations in Queensland and South Australia. The majority of these loans were arranged between 2005 and 2006 and were used by borrowers to purchase second-hand vehicles.

‘Many of these borrowers were dependent on Centrelink payments for their income and were unable to meet the repayments on the loans arranged by Capitalcorp,’
said Mr Greg Kirk, Senior Executive Leader of ASIC’s Deposit Takers, Credit and Insurance team.

‘It’s essential that finance brokers, especially those dealing with vulnerable consumers, ensure they place borrowers into loans they are able to repay’, said Mr Kirk.

In response to ASIC’s inquiries, Capitalcorp has also acted to:

• implement more rigorous procedures to accurately disclose the income, expenses, assets and liabilities of low-income consumers to credit providers;
• improve standards regarding disclosure of information to consumers;
• upgrade its internal audits; and
• upgrade its training of staff.

Further information is available from ASIC.