Smart50 finalist, Paid International, has been fined $30,600 by the Australian Securities and Investment Commission for misleading representations in its online advertisements.
The lender was listed fourth in last year’s Smart50 and hit the headlines again this month when it revealed plans for an initial public offering.
Paid International stated that it offered ‘instant decisions’ and loan approvals ‘within minutes’ for small amount loans on websites operated by Paid International at firststopmoney.com.au, loanspronto.com.au and paydayplus.com.au.
ASIC was concerned the ads were false or misleading because the lender’s assessment of a loan application was not ‘instant’ or completed ‘within minutes’.
In some instances, loan applications took up to 72 hours to be assessed.
ASIC deputy chairman Peter Kell said credit licensees, such as Paid International, must make reasonable enquiries about the consumer, verify their financial situation and assess the suitability of the loan for that particular consumer before providing them with a loan.
Kell said it is not appropriate or possible for a small amount lender or any other credit licensee to make an instant decision or approve a loan ‘within minutes’ if they are complying with their obligations.
“This is another example of a small amount lender making statements on its website that indicate a concerning lack of awareness about the responsible lending laws, and an apparent disregard for their responsibility to avoid making misleading statements in their advertising,” he said in a statement.
‘ASIC is committed to ensuring lenders adhere to their obligations, to help reduce the risk that overcommitted consumers find themselves in a debt spiral.’
Tim Dean, chief executive of Paid International, told SmartCompany the websites involved in the fines are no longer in operation and haven’t been for “many months”.
“It’s a past issue,” he says.
“As a business we take steps to make sure everything we do is compliant, we work with ASIC in all instances and this is an example of that.”
Dean says Paid International is committed to “absolute compliance” with responsible lending laws while providing fast credit solutions.
Dean says when Paid International was informed wording on its website advertisements was inconsistent with those obligations it immediately corrected the advertising text so it remained compliant with its regulatory requirements and accurately represented the company’s lending practices.
In addition, Paid International developed and implemented systems to ensure it would not reoccur and welcomes the resolution of the matter through the payment of infringement notices to ASIC.
“These issues happen from time to time and we take the view we always learn from everything that happens,” Dean says.
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
