Cigno and ASIC submission

Written on the 6 August 2020 by SAFCA

Thank you to everyone who contributed case studies about Cigno. FCA have drafted a submission which will be sent to ASIC today, and SAFCA have put their name to the document.

I will share a copy of the submission next week. At the time of typing FCA were making some final adjustments.

This is a joint submission to ASIC about Cigno, supporting the proposed use of their product intervention power to stop Cigno using the current loophole that avoids the credit laws.

The submission is due on Thursday (today).  About the submission:

As many would be aware, ASIC is currently consulting on their proposal to use the ASIC Product Intervention Power to the ban the latest continuing credit contract lending model, most commonly being used by Cigno and associate company BHF Solutions. This is the model under which all loans involving Cigno appear to have been issued since mid-September 2019, when ASIC banned the previous model used by Cigno.

Case studies I received from our members have not been used as the submission is concentrating on the present ASIC consultation and our case studies would involve the old lending model Cigno was using, that was banned by ASIC's first intervention.  CALC are considering the idea of pushing for civil proceedings against Cigno for unconscionable conduct and/ or breaches of responsible lending laws, particularly if the new ban is implemented and they continue to operate. If it looks like going that way our case studies will support this project.