Queensland car yard lender ordered to pay over $1.2 million after breaching consumer credit laws

The Australian Securities and Investments Commission (ASIC) announced that the Federal Court has fined Cairns-based lender, Channic Pty Ltd (Channic), broker Cash Brokers Pty Ltd (Cash Brokers) and the sole director of both companies, Colin William Hulbert, a total of $776000 for breaching consumer credit laws. The Court also ordered the payment of costs of $420000.

Channic and Cash Brokers both operated from Supercheap, a used car dealership in Cairns which was also owned by Mr Hulbert. ASIC brought civil penalty proceedings after the Indigenous Consumer Assistance Network reported that Channic and Cash Brokers were dealing unjustly with vulnerable Indigenous consumers from the remote community of Yarrabah.

The misconduct involved Cash Brokers assisting consumers to obtain loans from Channic at 48 per cent interest to purchase vehicles from Supercheap, while charging brokerage fees of either $550 or $990, also financed under the loans. Channic did not assess whether the loans were suited to the consumers' requirements.

On 23 March 2017, the Court also awarded a total of $47,699 in compensation to affected consumers.

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