Posted on 16 Apr 2020
Slater and Gordon is investigating a class action against Cigno Loans after it was revealed the payday lenders charged vulnerable Australians exorbitant interest and fees, leaving them drowning in debt.
The leading class actions firm is investigating Cigno Loans and its related entities after they used predatory loan practices to target people who would not have been able to meet loan repayments. They were then hit with a raft of fees and interest , sometimes resulting in interest bills of more than 990 per cent of the original loan amount, in some cases.
The pay day loans typically began as relatively small amounts – often between $100 and $2000 – but many instances included fees, charges and interest rates resulting in the repayable becoming exorbitantly high.
Slater and Gordon Associate William Zerno said the repugnant lending practice and loan products were banned by the Australian Securities and Investments Commission (ASIC) in 2019.
Cigno Loans’ bid to have this ban overturned was yesterday rejected by the Federal Court.
“In one reported case, a Cigno Loans customer obtained short-term credit for $120. By the end, she was liable to repay almost $1200,” Mr Zerno said.
“These kinds of payday loans seem to be targeted towards some of 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.
“Our investigations, and the hard work done over a long period of time by advocates in the space, indicates strongly that Cigno set up a corporate structure designed to evade the operation of the National Consumer Credit Protection Act and other consumer protections that would have put firm limits on the fees and interest that could have been charged.
“While our investigation is still ongoing, so far there looks to be a strong argument that these practices were unconscionable and would have broken Australia's consumer protection and credit laws had it not been for Cigno's corporate structure. Consumers have a right to seek redress if they suffer financial losses because of unconscionable conduct by corporations they engage with.”
“Slater and Gordon will be working hard in the coming weeks to reach out to people who were victims of these aggressive pay day loan practices.”
For more information, slatergordon.com.au/cigno
Media Contact Therese Allaoui (03) 9602 6844 / 0428 994 937