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‘Predatory’ payday lender hit with class action investigation
A compensation law firm is investigating a class action against a short-term loan facilitator after it was revealed the payday lenders led vulnerable Australians to drown in debt.
Naomi Neilson
Slater and Gordon is investigating Cigno Loans and related entities after it was discovered the payday lender set up their corporate structure to evade the usual operation of National Consumer Protection Act, which would have put firm limits on fees and interests charged.
The payday loans began small but many included fees, charges and interest rates which resulted in the repayable fee becoming “exorbitantly high”. The Australian Securities and Investments Commission has banned these practices and Cigno Loans recently lost out on overturning this ban in the Federal Court.
Slater and Gordon associate William Zerno said: “In one reported case, a Cigno Loans customer obtained short-term credit for $120. By the end, she was liable to repay almost $1,200. These kind of payday loans seem to be targeted towards some of the most vulnerable sectors of our society, who often will have the least ability to absorb massive interest charges, and the least ability to challenge these kinds of onerous lending terms.”
While the investigation is still ongoing, Slater and Gordons said there looks to be a “strong argument” that the practices were unconscionable and broke consumer protection laws.
“Consumers have a right to seek redress if they suffer financial losses because of these unconscionable conduct by corporates they engage with,” Mr Zerno said.
“Slater and Gordon will be working hard in the coming weeks to reach out to people who were victims of these aggressive payday loan practices.”
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
