Payday loans. Sketchy micro-financing that skirts the border of ethics and relies on entrapping the poor and desperate in a seemingly endless cycle of interest and repayment in order to thrive.
But with a flash app, a sleek, modern-design, and a hefty advertising budget, Nimble became practically a household name over the course of 2015, as its ads began cropping up all over the shop.
Unfortunately for them, it wasn’t just consumers who suddenly started paying attention to them. The Australian Securities and Investments Commission began watching on as well.
The small loans with exorbitantly high interest rates have brought the company unstuck, with the ASIC ruling that Nimble has to refund $1.5million in repayments to more than 7,000 consumers who were given loans they, by all rights, should not have been afforded.
The consumer watchdog ruled that Nimble had “significant deficiencies” in its loan-approval process, and had failed to adequately assess certain customers’ financial situations. Instead, they simply relied on a rather simplistic algorithm that did not take external variables – such as customers taking repeat payday loans from multiple sources in a short amount of time – into account.
The ASIC ruled that Nimble needs to refund the money within a period of six months, as well as make a $50,000 donation to Financial Counselling Australia, and engage an external compliance consultant to go over the ins and outs of how they conduct their “business.”
Nimble chief executive Sami Malia issued a statement confirming the decision:
“Nimble has identified and promptly resolved these issues. They affected around 1.2 per cent of loans written during the period from 1 July 2013 to 22 July 2015. These application assessment issues were entirely unintended and were resolved in collaboration with ASIC. There has been no adverse findings against Nimble.”
Yep. Because all no-fault findings carry mandatory $50k donations to an organisation dealing with the direct fallout of your “issues” as standard.
Nimble’s advertising campaign was heavily criticised by industry pundits for encouraging customers to use the service as a means of paying household bills, rather than utilising service provider’s financial hardship provisions.
Source: News.com.au.
