The Commerce Commission has commenced High Court proceedings against Quadsaa Pty Ltd (trading as Pretty Penny and PPL) alleging that it has breached the lender responsibility principles contained in the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
The Commission’s proceedings relate to Pretty Penny’s conduct between September 2016 and June 2017. In that period Pretty Penny offered loans of between $50 and $550 for terms of between 1 and 92 days with an annual interest rate of 365%, or 1% per day with interest compounding daily.
The Commission alleges that Pretty Penny failed to exercise the care, diligence and skill of a responsible lender, as required by the lender responsibility principles, in that it:
- failed to make inquiries so as to be satisfied of the borrowers’ requirements and objectives
- failed to make inquiries so as to be satisfied of the borrowers’ ability to repay without substantial hardship
- failed to exercise care, diligence and skill in text, email, radio and internet advertising
- failed to ensure loan agreements were not oppressive, including interest rates
- failed to ensure it did not induce borrowers to enter into agreements by oppressive means.
The Commission seeks declarations that Pretty Penny’s conduct breached the CCCFA, injunctions preventing Pretty Penny from lending without taking specified steps to ensure it meets its legal obligations, and compensation for affected borrowers.
The Commission has received 76 complaints or enquiries about Pretty Penny since March 2017.
