Background
Venture 5 Group Pty Ltd, trading as CashnGo, provided small amount credit contracts for loans of $300 to $2,000. ASIC alleged that its standard-form contracts contained seven unfair terms concerning default, access to customers’ banking information, indemnities and limitations of liability. CashnGo admitted the contraventions, and the parties submitted agreed facts and proposed orders.
CashnGo relied on two of the terms to monitor defaulting customers’ bank accounts hourly and make unscheduled withdrawal attempts when funds appeared. From 9 November 2023 to 30 June 2026, it made 658,245 such attempts, of which 124,101 succeeded and withdrew about $9.43 million. Available data also indicated that thousands of affected consumers were repeatedly left with expected account balances of $5 or less.
CashnGo separately admitted that, between 11 March 2021 and 6 June 2023, a system update caused required default notices to be omitted from automated emails. That failure affected 53,057 consumers across 67,545 credit contracts and breached the National Credit Code.
The Court’s Holding
Justice Jackman declared all seven challenged terms unfair. The Court ordered the default term and two authority terms void after 14 days and declared the two indemnity terms and two limitation-of-liability terms void from the outset. It also declared that CashnGo committed 190,546 contraventions by proposing and making contracts containing unfair terms and at least 658,245 contraventions by applying or relying on unfair terms. The Court further declared 67,545 contraventions of the Credit Code’s default-notice requirement.
The Court imposed the parties’ agreed $3.5 million civil penalty for the unfair-term contraventions, payable in three instalments through June 2028. Jackman J found the amount sufficient to deter similar conduct without being oppressive, taking account of the conduct’s seriousness, widespread consumer impact, senior-management involvement, CashnGo’s financial position and its cooperation with ASIC.
The Court also permanently restrained CashnGo from relying on the seven terms or substantially similar provisions, ordered replacement terms for affected contracts, required a corrective notice on CashnGo’s website for 90 days, and ordered the company to pay ASIC’s costs of $100,000. ASIC did not pursue its unconscionable-conduct claim.
Key Takeaways
- Using an unfair term can constitute a separate civil-penalty contravention each time the business applies or relies on it, producing substantial exposure even where the underlying contracts are small.
- Automated debt-recovery systems remain subject to consumer-protection law; here, hourly account monitoring and unscheduled withdrawals risked depriving financially vulnerable borrowers of money for essential expenses.
- Cooperation with a regulator may reduce the penalty, but senior-management involvement, continued conduct after proceedings begin and widespread consumer harm weigh strongly toward significant deterrent relief.
Why It Matters
The decision illustrates the reach of Australia’s civil-penalty regime for unfair terms in standard-form financial contracts. Liability arose both from including the terms and from repeatedly using them through an automated collection system, resulting in hundreds of thousands of contraventions.
For consumer lenders, the judgment underscores the need to review not only contractual wording but also the software and operational practices that implement it. The remedies show that courts may combine penalties with retrospective invalidity, contract variation, permanent injunctions and public corrective notices.