ASIC’s response to Four Corners story ‘A Lender of Last Resort’

ASIC’s Warren Day responds to the Four Corners story that aired on 7 April 2014 ‘A Lender of Last Resort’

Video transcript below:

Last night the ABC’s Four Corners ran a story on people’s experiences with commercial lending.

To clarify: ASIC does not regulate commercial lending arrangements under Australia’s consumer credit protection laws.

Unlike consumer credit providers, commercial lenders don’t have to be licensed to provide or arrange finance.

They are not subject to detailed conduct or disclosure regulation. And they don’t have to be members of an ombudsman scheme.

Sometimes though, we are called on to get involved in private disputes involving commercial loans.

We will assess them – as we do with all information provided to ASIC – but generally we won’t take action on what are essentially private, commercial disputes.

Sometimes it is more appropriate for the police to get involved, especially if there are allegations of criminal conduct such as theft, fraud or intimidation.

Borrowers need to be level-headed in these situations.

There are significant ramifications if you cannot meet the terms of these commercial loans.

If you fail to meet the terms of the contract, you could lose control of your business or home.

ASIC’s priority is to ensure that retail investors and consumer credit borrowers — the mums and dads – are confident and informed.

With this, we recommend borrowers get independent legal advice before entering into any such contracts.

ASIC’s more detailed response to Four Corners is on our website.

Thanks for watching.