The Federal Court has ordered Cigno Australia and its director Mark Swanepoel and BSF Solutions and its director Brenton Harrison to pay a combined penalty of $7 million for engaging in credit activity without a licence and charging prohibited fees.
Cigno Australia was ordered to pay $3 million, its director Mr Swanepoel $500,000, BSF Solutions $3 million, and its director Mr Harrison $500,000.
The penalty orders follow the findings of the Federal Court on 24 May 2024 of breaches of the Credit Act by Cigno Australia and BSF Solutions through their use of the No Upfront Charge Loan Model and involvement in those breaches by Mr Swanepoel and Mr Harrison (24-111MR).
ASIC Chair Joe Longo said, 'ASIC has taken regulatory and enforcement action over many years to respond to various business models used by entities connected to Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison. ASIC believes their No Upfront Charge Loan Model was designed to sidestep consumer protections laws and put consumers at risk.
'From July 2022 to May 2024, Cigno Australia and BSF Solutions charged consumers more than $90 million in fees.
'Today's outcome demonstrates ASIC's commitment to protecting Australians from predatory lending practices and holding individuals and companies accountable for their actions.'
In delivering his judgment, Justice Jackman said, 'ASIC submits, and I accept, that the respondents' decision to operate that model denied consumers important protections under the Credit Act and Credit Code. In relation to the No Upfront Charge Loan Model, those protections included limits on the fees and charges that can be imposed for the provision of credit.'
