A Brisbane-based digital lender has been slapped with two infringement notices by ASIC for its false and misleading repayment estimate calculator.
The corporate watchdog took action against Jaracanda Finance, which offered loans up to $15,000, typically for 12 to 36 months, because it was concerned that the credit licensee’s repayment estimate calculator:
- used an annual percentage rate that was significantly less than the rate that applied to most consumers who entered a credit contract with Jacaranda, and
- was advertising loans at an annual percentage rate that Jacaranda did not offer.
“ASIC was concerned that consumers were relying on the estimated repayments that the calculator generated when deciding whether to apply for a loan and would use this information to determine whether a loan was appropriate for them,” said Sarah Court, ASIC deputy chair. “This information was misleading and could have led consumers to apply for a loan that was more costly than they had expected.”
Lenders are required to ensure that the information on their websites accurately reflects the credit product being offered, Court said.
Jacaranda removed the repayment calculator from its website in September after ASIC commenced its investigation.
The lender also paid $26,640 in compliance with the infringement notices on Feb. 8. Payment of an infringement notice is not an admission of guilt or liability.
To find out the specific reasons for ASIC’s concerns, access the infringement notices published on the Credit and ASIC Act infringements notices register.