Grab your coffee and kick back with today’s headlines. Here’s the news small business owners need to know on Friday, September 13, 2019.
ASIC cracking down on short term lenders
The Australian Securities and Investments Commission (ASIC) has finally been granted the teeth to take action against predatory lenders who offer short term loans at exorbitant interest rates, oftentimes leaving their customers in the poor house in the process.
Until now, short term lenders have been able to take advantage of loopholes to charge clients punitive rates of up to 1000 per cent for upfront fees and failing to meet loan agreements.
ASIC’s new powers will allow them to pursue short term lenders who have acted in a predatory fashion with penalties including jail time and up to 1.2 million in fines.
Online payday lender Cigno is likely to be the first target of the watchdog.
“ASIC will take action where it identifies products that can or do cause significant consumer detriment,” ASIC Commissioner Sean Hughes told the ABC. “In this case, many financially vulnerable consumers incurred extremely high costs they could ill afford, often leading to payment default that only added to their financial burden.”
Aussies holding on to tax refunds
Rather than heading off on spending sprees to stimulate the economy, Australians are holding onto to their tax refunds according to a recent survey by Westpac. The survey found half of Australia’s taxpayers who are due for tax refunds have already received them, equating to about $3.9 billion worth of stimulus. Yet one in four have said they will keep hold of their money as savings rather than spending their returns, suggesting consumer confidence is in crisis.
“Not only are consumers feeling a little ‘meh’, but Aussies are not sure about what to do with their cash,” CommSec chief economist Craig James told the Australian Financial Review.
The news follows recent reports on household consumption which found household spending had dropped to a low of 1.4 per cent in the past quarter. Retail sales figures have also fallen 0.1 per cent in July.