The review will cover the practices of seven lenders and pinpoint improvement opportunities
The Australian Securities and Investments Commission (ASIC) has announced a review of the motor vehicle finance sector to improve consumer outcomes, particularly for those in regional and remote areas, including First Nations communities.
The review, set to begin this month, will examine lenders', brokers', and other intermediaries' compliance with regulatory requirements. ASIC will assess how lenders manage loan defaults, hardship practices, and dispute resolution processes within the industry.
ASIC will scrutinise the practices of seven lenders and identify additional brokers and intermediaries for review as the project progresses. If it finds misconduct, ASIC will take enforcement action to protect consumers.
The regulator has emphasised that misconduct in used car finance, mainly when it affects vulnerable consumers, remains a key enforcement priority for 2025. ASIC has ongoing legal proceedings against car finance company Money3 Loans Pty Ltd for alleged breaches of responsible lending obligations. Additionally, it has taken action against car dealership Diamond Wheels, Keo Automotive, and a former director for allegedly providing unlicensed car loans with excessive interest rates. Further investigations into the sector are underway.
ASIC stated that the project seeks to strengthen industry-wide compliance, improve consumer experiences, and reduce potential harm to borrowers. The regulator said its focus on regional and remote consumers, particularly First Nations peoples, aligns with its broader commitment to addressing financial misconduct impacting Indigenous communities.
ASIC will release initial high-level findings in the second half of 2025, followed by a more detailed public report. According to ASIC, improving consumer protection remains a strategic priority, with particular attention to misconduct affecting First Nations people. Further information on ASIC's approach to Indigenous financial services and its reconciliation efforts is available on its website.
