Submission to ASIC Consultation on Cigno Model
Joint Submission from the Financial Counselling Sector re ASIC Consultation Paper 330 Using the product intervention power: Continuing credit contracts
The financial counselling sector supports ASIC using its product intervention power to impose a total cost cap in relation to the Cigno continuing credit model. This will ensure fees and charges by credit providers and their associated entities cannot exceed the maximum under the continuing credit exemption as set out in the National Consumer Credit Protection Act regulations.
The proposed industry-wide PIO would prevent Cigno, or any entity using a similar business model, from charging exorbitant fees through a mix of loan and service agreement charges (the Cigno model). The current model being used by Cigno causes significant harm to people and we urge ASIC to intervene as quickly as possible.
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