The Federal Court today ordered Lightspeed Finance Pty Ltd and its director Mark James Fitzpatrick pay a total $220,000 for failing to give effect to on an Australian Financial Complaints Authority (AFCA) determination.
The Court found Lightspeed Finance, a credit assistance provider, failed to give effect to an AFCA determination and that, as Lightspeed Finance’s director, Mr Fitzpatrick was knowingly involved in this breach of the National Credit Act.
ASIC Deputy Chair Sarah Court said, ‘When an external dispute resolution decision is made, ASIC expects the determination will be carried out. Complying with AFCA determinations is a critical part of a licensee’s obligations and ensures that consumers have access to a dispute resolution system that works.’
On 4 December 2018, AFCA made a determination against Lightspeed Finance following a consumer complaint about an unaffordable loan. AFCA determined that Lightspeed Finance pay a loan debt (including interest) owed by the client to a lender, prior to the client repaying Lightspeed the initial loan amount.
On 12 July 2019, AFCA made a second determination in favour of the same consumer, reducing the consumer’s liability even further. Both determinations were accepted by the consumer and were binding on Lightspeed under the AFCA rules.
The $220,000 payment ordered by the court includes $20,000 in penalties, $150,000 in compensation and $50,000 for ASIC’s costs.
In making the orders, Justice Derrington observed that Lightspeed and Mr Fitzpatrick failed to meet the obligations of Lightspeed’s credit licence by refusing to comply with AFCA’s determinations, a central part of Lightspeed’s agreement to be bound by AFCA’s external dispute resolution scheme.
Since 13 March 2019, greater penalties apply for failures to co-operate with AFCA, which include a maximum penalty of $10.5 million for a company and $1.05 million for an individual.
