Financial Services and Credit Monthly Update September 2025

CONSUMER CREDIT

ASIC flags concerns over lenders’ hardship responses

The Australian Securities and Investments Commission (ASIC) has published Report 815, reviewing progress made by lenders in improving support for customers experiencing financial hardship. The report follows ASIC’s 2024 review (Report 782), which identified widespread deficiencies in hardship practices across the sector.

While lenders have made notable improvements (such as clearer hardship messaging, better identification of hardship notices, and reduced information burdens), ASIC remains concerned about the overall quality of responses. Some lenders continue to apply standardised approaches rather than tailoring assistance to individual circumstances. ASIC has required certain lenders to submit action plans and, in some cases, obtain independent assurance of implementation. ASIC will continue monitoring lenders’ compliance and progress, particularly as cost-of-living pressures persist for many consumers.

Treasury consults on merits review rules for Help to Buy Scheme

The Treasury has conducted a consultation on the proposed Help to Buy Regulations 2025 (Cth), which set out the merits review framework for decisions made under the new Help to Buy Scheme. The scheme, administered by Housing Australia, will assist up to 40,000 eligible households to purchase homes with a government equity contribution, reducing the required deposit and mortgage size. The draft regulations specify which decisions by Housing Australia can be reviewed by the Administrative Review Tribunal. The consultation ran from 15 to 26 September 2025.

DIGITAL ASSETS

ASIC grants licensing relief for stablecoin distributors

On 18 September 2025, ASIC issued a new class order, ASIC Corporations (Stablecoin Distribution Exemption) Instrument 2025/631 (Instrument 2025/631), providing licensing relief for intermediaries distributing a named stablecoin (AUDM) issued by an Australian financial services (AFS) licensee. The exemption removes the need for intermediaries to hold separate AFS, market, or clearing and settlement facility licences when offering services related to eligible stablecoins.

To qualify, intermediaries must make the product disclosure statement (PDS) available to clients where one has been prepared. The instrument follows ASIC’s consultation in late 2024 (CP 381), which proposed updates to Information Sheet INFO 225 on digital assets. ASIC is finalising those updates and expects to publish revised guidance shortly. The relief will take effect upon registration and complements broader government reforms on payment stablecoins currently under development.

On 25 September 2025, ASIC proposed a number of amendments to Instrument 2025/631, aiming to extend class exemptions to intermediaries distributing a second stablecoin (AUDF) issued by an AFS licensee. The proposed changes would update Instrument 2025/631 to add a second named stablecoin and make minor consequential and clarification changes. Submissions on the proposed amendments close on 2 October 2025.

Consultation on new licensing regime for digital asset platforms

The Federal Government has released draft legislation proposing a new regulatory framework for digital asset platforms that hold crypto and other digital assets. The draft introduces two new financial products under the Corporations Act 2001 (Cth) (Corporations Act) - “digital asset platform” and “tokenised custody platform” - bringing them within the scope of financial services laws.

Operators of these platforms will be required to hold an AFS licence and comply with existing and targeted obligations, including conduct standards and transparency requirements. Smaller low-risk platforms (i.e. those holding less than $5,000 per customer and facilitating under $10 million in annual transactions) will be exempt. The regime will not apply to digital asset issuers or non-financial use cases. Consultation is open until 24 October 2025.

FINANCIAL ADVICE

ASIC warns advisers ahead of qualifications deadline

ASIC has issued a warning to financial advisers and AFS licensees ahead of a 1 January 2026 deadline, urging immediate review of adviser qualifications recorded on the Financial Advisers Register. Advisers who have not met the qualifications standard under s 921B(2) of the Corporations Act may be barred from providing personal advice to retail clients from that date.

As of mid-September, 3,459 of the 15,432 advisers listed had not met the standard, with 1,371 potentially eligible for the experienced provider pathway but not yet confirmed by their licensees. Additionally, 1,143 advisers must complete specified commercial and taxation law courses to continue offering tax (financial) advice services. ASIC has updated its point-in-time dataset to assist licensees in verifying adviser status. Licensees must correct inaccurate register entries within 30 business days or risk penalties.

FINANCIAL PRODUCTS

ASIC renews relief for basic deposit and insurance product distribution

ASIC has remade a legislative instrument that continues to exempt AFS licensees from appointing authorised representatives when distributing basic deposit or general insurance products. The new instrument, ASIC Corporations (Basic Deposit and General Insurance Product Distribution) Instrument 2025/520, replaces the previous 2015 version and extends the relief until 27 August 2030.

The exemption is intended to reduce compliance costs for providers while maintaining consumer protections under the Corporations Act. ASIC assessed the instrument as operating effectively and received one supportive submission during its May 2025 consultation. The relief does not alter licensees’ obligations to consumers, who retain the same protections as if dealing directly with the provider.

ASIC renews relief for pre-2013 managed investment schemes

ASIC has remade its relief instrument governing pricing discretion for managed investment schemes registered before 1 October 2013. The new instrument, ASIC Corporations (Managed investment product consideration) Instrument 2025/629, replaces the expiring 2015 version (ASIC Corporations (Managed investment product consideration) Instrument 2015/847) and will remain in force for five years.

The updated instrument simplifies documentation requirements for discretionary pricing decisions and reduces prescriptive elements. It also extends relief to schemes with interests quoted on a financial market operated by Cboe Australia Pty Ltd, following stakeholder feedback advocating for market-neutral drafting.

The relief applies to schemes that have not opted into the newer 2023 framework under ASIC Corporations (Discretions for Setting the Issue Price and Withdrawal Price of Interests in Managed Investment Schemes) Instrument 2023/693. The instrument aims to provide certainty and flexibility for responsible entities in setting issue and withdrawal prices under specified conditions.

FINANCIAL SERVICES

ASIC extends disclosure relief

• ASIC has issued a new legislative instrument, ASIC Corporations (Financial Services Guide, General Advice Warning and Advertising Related Relief) Instrument 2025/234, consolidating and extending relief previously provided under three separate instruments that were due to sunset on 1 October 2025. The new instrument continues exemptions relating to financial services guides, general advice warnings, and advertising by product issuers. The consolidation replaces ASIC Corporations (Advertising by Product Issuers) Instruments 2015/539, ASIC Corporations (General Advice Warning) Instrument 2015/540, and ASIC Corporations (Financial Services Guides) Instrument 2015/541, which were subject to the automatic 10-year sunset provision under the Legislation Act 2003 (Cth). The new instrument ensures continuity of current regulatory settings.

• ASIC has issued a new legislative instrument, ASIC Corporations (Electronic Disclosure) Instrument 2025/447, consolidating and extending relief for digital financial services disclosures until 1 October 2030. The instrument replaces two earlier instruments (ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647 and ASIC Corporations (Removing Barriers to Electronic Disclosure) Instrument 2015/649), which were due to sunset in October 2025. The relief allows financial services providers to deliver disclosures electronically, including publishing documents online and notifying clients of their availability. It also relaxes requirements around document length, formatting, and provision of hard copies. Minor amendments have been made to update references and extend the relief to Cash Settlement Fact Sheets.

• ASIC has remade its relief instrument for deposit product disclosure, extending exemptions for authorised deposit-taking institutions (ADIs) until 1 October 2030. The new instrument, ASIC Corporations (Deposit Product Disclosure) Instrument 2025/509, continues relief previously granted under Instrument 2015/683. The instrument exempts ADIs from having to update PDSs each time interest rates change, provided the PDS clearly explains where current rates can be found and that this information is simple and convenient to access. It also removes the requirement to include termination values in periodic statements, though ADIs must disclose any early termination fees or restrictions in the PDS.

FINANCIAL SYSTEM

Cutting red tape

Treasurer Jim Chalmers has tasked the Council of Financial Regulators (CFR) with coordinating a review of financial sector regulation, including input from the Australian Competition and Consumer Commission (ACCC), the Australian Taxation Office (ATO), the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Financial Security Authority. The CFR has also been instructed to prioritise harmonising data collection and conduct stakeholder consultation on other priority areas. The Federal Government plans to revise regulators’ statements of expectations, promote the “tell-us-once” principle for government interactions, and conduct sector-specific regulatory deep dives.

The Federal Government has also released correspondence from 38 Commonwealth regulators outlining more than 400 proposals to reduce regulatory burden and boost productivity. Around 150 of these suggestions involve actions that could be implemented without legislative or budgetary changes. The initiative stems from the Economic Reform Roundtable, where regulators were invited to identify opportunities to streamline compliance.

ASIC has released its first Regulatory Simplification report, revealing it has removed over 9,240 pages of regulatory content since January 2025. The initiative is part of a broader effort to streamline regulation and reduce compliance burdens, while maintaining consumer protections. Key changes include a redesigned ASIC website, pilot regulatory roadmaps for small-company directors and financial advisers, and the consolidation of 23 legislative instruments. ASIC has also transitioned more paper-based processes to email and will allow electronic signatures on all forms from 1 October 2025. ASIC is now seeking public feedback on its simplification initiatives, with submissions open until 15 October 2025.

APRA finalises updates to Banking Act exemption instruments

On 17 September 2025, the Australian Prudential Regulation Authority (APRA) released its response to consultation on minor proposals concerning instruments under section 66 of the Banking Act 1959 (Cth) (Banking Act). The proposals addressed exemption and determination instruments that are either approaching their sunset date or require revision to reflect current regulatory practice. Following the consultation, APRA finalised the relevant legislative instrument and published a response letter along with non-confidential submissions.

Section 66 of the Banking Act restricts the use of certain banking-related terms by entities not authorised as banks. The updated instruments clarify exemptions and determinations relevant to this restriction. No major policy changes were introduced.

ASIC urges lift in private credit standards following sector review

ASIC has released Report 814, a review of Australia’s private credit funds sector, calling for improved standards across the rapidly growing $200 billion industry. The report, commissioned from sector experts Richard Timbs and Nigel Williams, outlines both sound and concerning practices observed in the market. Key issues flagged include opaque fee structures, related party transactions, governance shortcomings, valuation inconsistencies, and unclear disclosure terminology.

The review follows ASIC’s earlier discussion paper on capital markets and aligns with findings from recent surveillance activity, which led to stop orders against three credit funds (see “Disputes and Enforcement” section for more details). The regulator will issue further guidance in November, alongside its surveillance findings and regulatory roadmap.

INSURANCE

Draft legislation released to ban genetic test results in life insurance

The Federal Government has released draft legislation proposing a ban on the use of adverse genetic test results in life insurance underwriting. The move aims to ensure Australians are not deterred from undergoing genetic testing due to concerns about insurance eligibility or pricing.

The exposure draft follows consultation with medical professionals, researchers and community stakeholders. It is intended to support broader investment in genetic research and technology, particularly in the diagnosis and treatment of cancers and heritable conditions. The proposed legislation would prevent life insurers from using unfavourable genetic findings when assessing applications or setting premiums. Consultation closes on 12 October 2025.

Review of Cyclone and Terrorism Insurance Act

The Federal Government has announced a review of the Terrorism and Cyclone Insurance Act 2003 (Cth), focusing on the effectiveness of the reinsurance pools operated by the Australian Reinsurance Pool Corporation. This marks the first statutory review of the cyclone reinsurance pool since its inception in 2022.

The review will assess whether the cyclone and terrorism pools are achieving their intended objectives, including affordability of insurance premiums and appropriate incentives for risk mitigation. It will also examine governance, administration, and resourcing arrangements.

Small business marine property insurance will remain excluded from the cyclone pool, with modelling indicating minimal affordability benefits and potential cost increases. A consultation paper for the review and actuarial modelling have been published on the Treasury website. Submissions are open until 11 November 2025.

PAYMENTS

Payments system reform passes Senate

The Treasury Laws Amendment (Payments System Modernisation) Act 2025 (Cth) received assent on 19 September 2025. The legislation updates the regulatory framework for Australia’s payments system, expanding the definitions of “payment system” and “participant” to capture emerging technologies such as digital wallets and buy now pay later services. The reforms empower the Reserve Bank of Australia to regulate a broader range of payment platforms and introduce a new ministerial power allowing the Treasurer to designate certain systems for additional oversight where national interest concerns arise, including national security risks.

ACCC renews authorisation for AusPayNet’s IAC Framework rules

On 11 September 2025, the ACCC granted a new substitute five-year authorisation to Australian Payments Network Limited (AusPayNet), enabling AusPayNet and members of the Issuers and Acquirers Community (IAC) Framework to continue applying certification, suspension and termination provisions under the framework’s regulations.

The IAC Framework governs clearing and settlement of card and ATM transactions between banks, covering networks such as Visa, Mastercard, American Express and eftpos. The authorised provisions relate specifically to corporate governance, including criteria for membership, and rules for suspending or terminating participants.

The ACCC’s determination ensures continuity of these governance mechanisms, which underpin the integrity of interbank payment systems. The authorisation does not extend to other aspects of the framework. The final determination is available on the ACCC’s public register.

ASIC consults on renewal of non-cash payment relief

ASIC has proposed to remake ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211, which is due to sunset on 1 April 2026. The instrument provides targeted exemptions from financial services laws for certain low-risk non-cash payment products, including travellers’ cheques, loyalty schemes, road toll facilities, prepaid mobile services, and non-reloadable gift cards.

ASIC considers the instrument to be operating effectively and intends to remake it for a further five years to preserve its ongoing effect. The relief includes exemptions from licensing, conduct and disclosure obligations under the Corporations Act, subject to alternative requirements for some products. It also exempts AFS licensees from needing specific authorisations when advising on or arranging use of these facilities. The instrument was originally introduced to consolidate multiple class orders pending broader payments reform. ASIC will revisit the relief once that reform process concludes. Submissions on the proposal close on 8 October 2025.

ACCC authorises industry shift to stronger card payment encryption

On 25 September 2025, the ACCC authorised a coordinated industry effort to upgrade encryption standards across Australia’s card payments system. The ACCC’s determination permits AusPayNet and members of the IAC to collaborate on migrating from the legacy Triple Data Encryption Standard (3DES) to the more secure Advanced Encryption Standard (AES).

The authorisation allows participants to enter into agreements and share information to monitor progress, report issues, and develop solutions, exclusively for the purpose of facilitating the migration. AES is widely recognised as faster, more efficient, and more secure than 3DES, making it a preferred long-term solution for protecting sensitive payments data. The ACCC has granted the authorisation for eight years.

PRUDENTIAL

APRA outlines nine productivity-focused regulatory actions

On 4 September 2025, APRA published two letters sent to Treasurer Jim Chalmers and Finance Minister Katy Gallagher detailing nine regulatory initiatives aimed at enhancing productivity while safeguarding financial system stability. The actions span banking, insurance, and cross-industry reforms, with several consultations already underway.

Key measures include simplifying the licensing regime for banks, revising capital requirements for life insurers, and adjusting reinsurance settings for general insurers. APRA also plans capital modelling and proportionality reforms for banks, with implementation expected in the second half of 2025. Broader initiatives include reducing duplicative rules (consultation planned for early 2026), streamlining data reporting (completion by December 2027), and improving coordination in payments regulation, subject to government timing.

SUPERANNUATION

ASIC flags gaps in super fund financial reporting and audit quality

ASIC has published its first report on the financial reporting and audit of superannuation funds for the year ended 30 June 2024, revealing inconsistent practices and shortcomings across 60 registrable superannuation entities (RSEs) and five audit files. The review found varied approaches to categorising unlisted investments under fair value hierarchy, with limited disclosure, which made comparisons difficult and valuations opaque.

Some RSEs failed to separately disclose sponsorship and advertising expenses, citing narrow interpretations of materiality. Audit files reviews showed insufficient evidence supporting investment valuations, with auditors relying heavily on fund managers’ figures and applying high materiality levels that reduced audit scrutiny.

ASIC contacted 17 RSEs for further information and issued comment forms to four auditors. ASIC has also signalled continued surveillance and potential enforcement action for significant breaches of the Corporations Act. This report, REP 816 Accounting for your super: ASIC's review into the financial reporting and audit of super funds, is the first in a series examining audit and reporting quality in 2024–25, with further reports on auditor independence and broader audit practices due in October 2025.

AML/CTF

DFAT issues advisory on proliferation financing risk

The Australian Sanctions Office (ASO) has released an advisory note outlining obligations and best practices for regulated entities to identify and mitigate proliferation financing risks. The note emphasises the need for financial institutions to integrate sanctions compliance into broader anti-money laundering and counter terrorism financing frameworks, particularly ahead of new obligations under the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth) (AML/CTF Act) commencing 31 March 2026.

The advisory note identifies high-risk sectors, including digital currency exchanges, maritime operators, and academic institutions, and outlines known methodologies used to exploit Australia’s financial system, such as fraud linked with North Korea, misuse of dual-use goods, and trade-based money laundering. It also details relevant international obligations under United Nations Security Council Resolutions and recommendations from the Financial Action Task Force, with specific attention to Iran and North Korea.

AUSTRAC highlights financial red flags in child exploitation cases

AUSTRAC has issued a reminder to financial services providers of their role in detecting transactions linked to child sexual exploitation, coinciding with National Child Protection Week.

AUSTRAC also flagged the rise of “sextortion”, where minors are coerced into sending sexualised images and then extorted for money or favours. Since mid-2022, Operation Huntsman has led to the closure of over 3,000 bank accounts linked to such payments. AUSTRAC’s financial crime guide outlines behavioural patterns and transaction types that may indicate exploitation to assist financial services providers in spotting red flags.

DISPUTES AND ENFORCEMENT

ASIC eases complaints reporting for small banks

ASIC has granted a no-action position allowing small banks to report internal dispute resolution (IDR) data annually instead of every six months. The change, effective immediately, applies to the January–February 2026 and 2027 submission windows under ASIC Corporations (Internal Dispute Resolution Data Reporting) Instrument 2022/205.

The adjustment follows recommendations from the Council of Financial Regulators’ review of small and medium-sized banks, which identified regulatory cost burdens as a barrier to competitiveness. ASIC has adopted the position ahead of formal system changes expected in 2027. The no-action letter outlines the banks eligible for relief and confirms that ASIC will not take enforcement action for non-compliance with the reporting requirement during the specified periods. However, the letter does not prevent third parties from pursuing legal action.

ASIC finalises approach to breach and complaints disclosures

ASIC has finalised its approach to publishing IDR and Reportable Situations (RS) data, following consultation on CP 383 Reportable situations and internal dispute resolution data publication. It will proceed with firm-level publication of IDR data via a public dashboard later this year, but will limit RS disclosures to aggregate-level reporting.

The decision reflects feedback from 47 submissions, with ASIC citing concerns about the maturity of the RS regime and recent changes to breach reporting obligations. The IDR dashboard will include privacy safeguards, comparative data, and explanatory material to aid interpretation. It will complement existing firm-level external dispute resolution data published by the Australian Financial Complaints Authority (AFCA). The RS dashboard, required under legislation, will be released in October 2025.

AFCA consults on new life insurance approach documents

On 8 September 2025, AFCA launched a public consultation on two new Approach documents concerning life insurance complaints. The first outlines AFCA’s interpretation of the duty to take reasonable care not to make a misrepresentation, while the second addresses non-disclosure and misrepresentation obligations under life insurance contracts. Both documents reflect amendments to the Insurance Contracts Act 1984 (Cth) that took effect in 2021 and apply to non-superannuation complaints under AFCA’s Rules. The consultation period runs until 10 October 2025.

SocGen fined $3.88m for futures market gatekeeper failures

Societe Generale Securities Australia Pty Limited (SocGen) has been fined $3.88 million by the Markets Disciplinary Panel (MDP) for failing to prevent suspicious trading activity in the ASX 24 electricity and wheat futures markets. The penalty follows an ASIC investigation which found that two SocGen clients placed 33 orders between May 2023 and February 2024 designed to “mark the close”, which is a tactic used to influence daily settlement prices.

Despite repeated warnings from ASIC throughout 2023, SocGen did not take timely action to stop further suspicious orders. The MDP found the firm’s compliance and surveillance functions lacked the necessary oversight, training, and tools to detect manipulative behaviour. SocGen, the second-largest participant in the ASX 24 Market, did not contest the breaches and has paid the penalty. This marks ASIC’s fifth enforcement action in 15 months targeting manipulation in energy and commodities derivatives markets.

ASIC cancels and suspends credit licences over AFCA breaches

ASIC has cancelled three Australian credit licences and suspended one for failing to maintain membership with AFCA, a legal requirement under the National Consumer Credit Protection Act 2009 (Cth). The actions were taken between 25 July and 29 August 2025. ASIC cited various breaches, including failure to lodge annual compliance certificates, non-payment of industry levies, and ceasing credit activities. AFCA is required to notify ASIC when a member is expelled or withdraws. Licensees may seek review of ASIC’s decisions through the Administrative Appeals Tribunal.

Federal Court fines Open4Sale directors $2.8m for fundraising breaches

The Federal Court has imposed $2.8 million in penalties on two directors of Open4Sale Global Ltd (Open4Sale) for breaching fundraising disclosure laws. Between March 2019 and July 2023, the company raised over $1.3 million from 83 investors without providing compliant disclosure documents.

Managing director Simeon La Barrie was fined $2 million, with the Court citing his “disgraceful” conduct and defiant attitude. Evidence showed he transferred over $1.4 million of investor funds to accounts linked to him, using some for personal expenses. Australian director Ewald Hafer was fined $800,000, having received nearly $138,000 in commissions while continuing to solicit investments despite knowing disclosure obligations were unmet. Both directors have been disqualified from managing corporations, La Barrie for 12 years and Hafer for 8 years, and are restrained from future non-compliant fundraising for the same periods. The Court declined to impose penalties on Open4Sale itself.

Latitude and Harvey Norman lose appeal over misleading advertising

The Full Federal Court has dismissed appeals by Latitude Finance Australia (Latitude) and Harvey Norman Holdings Ltd over misleading advertising of a 60-month interest-free payment offer. The campaign, which ran nationally from January 2020 to August 2021, failed to disclose that consumers needed to apply for a Latitude credit card and would incur monthly account service fees and, until March 2021, establishment fees.

In a unanimous decision, the Full Court found the appeals “barely arguable” and criticised the delay caused by the applications. The Court rejected arguments that consumers would naturally question the offer’s simplicity, affirming that the promotional message was misleading and that consumers were entitled to rely on its accuracy. The matter will return to court for a hearing on remedies, where ASIC will seek penalties, adverse publicity orders, an injunction, and costs. The original proceedings were commenced by ASIC in October 2022.

Revolut fined for late AML/CTF reporting

AUSTRAC has issued Revolut Payments Australia Pty Ltd (Revolut) with a $187,800 infringement notice for failing to submit international funds transfer instructions (IFTIs) on time, as required under the AML/CTF Act. The penalty follows Revolut’s self-disclosure of the reporting failures and its subsequent remedial action. Revolut, which operates as a remittance service provider, paid the infringement notice in full. AUSTRAC has identified remittance services, including payment platforms, as posing a high and stable money laundering risk in its 2024 national risk assessment.

High Court to hear ASIC appeal in Block Earner case

The High Court has granted ASIC special leave to appeal a Full Federal Court decision that found digital asset provider Block Earner did not require a financial services licence to offer its fixed-yield crypto product. From March to November 2022, Block Earner offered the “Earner” product, allowing users to earn fixed returns from digital assets. The appeal will test the scope of what constitutes a “financial product” under the law, particularly in relation to interest-earning and asset conversion products.

The Full Federal Court had earlier sided with Block Earner, overturning a Federal Court finding of unlicensed conduct. ASIC now seeks clarity on the regulatory perimeter for digital and traditional financial products. The High Court’s grant of leave is conditional on ASIC covering Block Earner’s appeal costs. A hearing date is yet to be set. Block Earner is the trading name of Web3 Ventures Pty Ltd, an AUSTRAC-registered digital currency exchange.

Mayfair 101 director handed 15-year ban

James Mawhinney, director of the Mayfair 101 Group (Mayfair 101), has been banned from promoting or raising funds through financial products for 15 years, following final orders made by the Federal Court in proceedings brought by ASIC. The injunctions extend interim restraints in place since August 2020, bringing the total prohibition period to 20 years.

Justice Button found Mawhinney had shown a “cavalier attitude to compliance” and a “willingness to adopt a reckless approach” to financial services. The Court concluded that his operations exposed investors to substantial risk, which ultimately materialised in heavy losses. Mawhinney was found to have failed to consider how investor obligations would be met, instead relying on raising further funds. The Court declined ASIC’s request to restrain Mawhinney from transferring assets overseas. The decision follows earlier findings that Mayfair 101 companies breached the law and misled investors through deceptive advertising.

Federal Court partially upholds ASIC case against Money3

The Federal Court has ruled on ASIC’s responsible lending case against car finance provider Money3 Loans Pty Ltd (Money3). ASIC alleged that Money3 breached credit laws by failing to properly assess five loans made to borrowers primarily reliant on Centrelink payments between May 2019 and February 2021. The Court found Money3 did not make reasonable inquiries into borrowers’ living expenses using bank transaction data, and in one case failed to assess a borrower’s requirements and objectives.

However, ASIC’s broader claims were rejected. The Court found Money3 had not entered borrowers into unsuitable loans, nor failed to ensure its representatives were adequately trained or compliant with credit legislation. ASIC’s criticism of Money3’s internal expense guide was also dismissed, with the Court declining to endorse benchmarks like the Household Expenditure Measure. A case management hearing is scheduled for 30 October 2025. ASIC commenced proceedings in May 2023.

ANZ admits misconduct across government and retail services

On 15 September 2025, Australia and New Zealand Banking Group Limited (ANZ) agreed to pay $240 million in penalties following admissions of unconscionable conduct and widespread failures across its institutional and retail banking divisions. The penalties relate to four separate proceedings brought by ASIC, which will now be considered by the Federal Court.

In its institutional dealings, ANZ admitted to misleading the Australian Government during a $14 billion bond issuance and overstating bond trading volumes by tens of billions of dollars over nearly two years. Retail misconduct included failing to respond to 488 customer hardship notices, misrepresenting savings interest rates, and charging fees to thousands of deceased customers.

The proposed penalties comprise $125 million for institutional matters, including a record $80 million for unconscionable conduct, and $115 million for retail matters. ANZ has completed partial remediation programs and acknowledged failures in managing non-financial risk. The full extent of some impacts, including those involving deceased estates, remains unknown.

ASIC issues stop orders against credit funds

ASIC has imposed interim stop orders on three registered managed investment schemes over concerns with their Target Market Determinations (TMDs).

Three of the orders relate to funds operated by La Trobe Financial Asset Management Limited (La Trobe). The first affects the La Trobe US Private Credit Fund, which invests in senior secured loans to unrated US middle market companies. ASIC found the fund’s TMD lacked clarity on investment timeframes and suggested an unsuitable portfolio allocation given the fund’s elevated risk. The fund, registered in May 2024, held $215.8 million in net assets as at 31 December 2024, with $8.2 million raised in Class B units.

The second and third orders targeted the 12 Month Term Account and 2 Year Account offered by the La Trobe Australian Credit Fund. ASIC cited deficiencies in the TMDs, including inadequate distribution conditions. These orders were revoked on 24 September 2025 after La Trobe amended the TMDs for these products.

Separately, ASIC issued a stop order on the RELI Capital Mortgage Fund, a registered managed investment scheme operated by RELI Capital Limited, citing a TMD that inappropriately included capital preservation investors and lacked sufficient detail on risk and distribution conditions.

ASIC sues RACQ over misleading insurance renewal pricing

ASIC has commenced proceedings in the Federal Court against RACQ Insurance Limited (RACQ), alleging the insurer sent over 570,000 renewal documents containing misleading premium comparisons between September 2019 and December 2024. The documents included a “last period premium” figure that ASIC claims was often higher than what customers had actually paid, due to negotiated discounts or policy changes. This allegedly gave a distorted impression of premium increases.

ASIC contends that RACQ was aware of the issue as early as two days after implementing the practice, following customer complaints, but continued for more than five years. The misleading figures appeared across various insurance products, including home, car, caravan, boat and pet cover. ASIC is seeking declarations, civil penalties and publicity orders.

Macquarie admits failures in Shield fund oversight, will refund investors

Macquarie Investment Management Ltd (MIML) has admitted to breaching its obligations as a superannuation trustee in relation to the Shield Master Fund (Shield), a managed investment scheme that attracted over $321 million from around 3,000 Macquarie superannuation members between 2022 and 2023. ASIC alleges MIML failed to act efficiently, honestly and fairly by not placing Shield on a watch list for heightened monitoring, despite its lack of track record.

ASIC has commenced Federal Court proceedings and accepted a court-enforceable undertaking from MIML, under which affected members will be repaid 100% of their invested amounts, less any withdrawals. ASIC will not seek civil penalties, citing public interest and MIML’s cooperation.

Shield redemptions were frozen in February 2024, and ASIC has since taken steps to preserve scheme assets. Investigations continue into Keystone Asset Management (in liquidation) (Shield’s responsible entity), its directors, financial advisers, lead generators, and other parties involved in promoting the fund.

Federal Court fines Optus $100 million for unconscionable sales conduct

The Federal Court has ordered Optus Mobile Pty Ltd (Optus) to pay a $100 million penalty after the telco admitted to engaging in unconscionable conduct in selling mobile phones and contracts to over 400 consumers. The misconduct occurred across 16 stores between August 2019 and July 2023 and included selling products to customers who could not afford, use, or understand them - many of whom were First Nations Australians or living with disabilities.

Optus also pursued debts arising from sales at its Mount Isa store in cases where contracts were fraudulently created without consumer knowledge. The Court found the consequences of Optus’s conduct to be “profound”, including financial harm and emotional distress.

In addition to the penalty, Optus has entered into a five-year court-enforceable undertaking to compensate affected consumers, overhaul internal systems, and donate $1 million to support digital literacy for First Nations Australians.

Kmart’s facial recognition system found to breach privacy laws

The Privacy Commissioner Carly Kind has determined that Kmart Australia Limited (Kmart) unlawfully collected sensitive biometric data through its use of facial recognition technology (FRT) in 28 stores between June 2020 and July 2022. The system captured the faces of all individuals entering stores or presenting at returns counters, aiming to identify refund fraud.

Kmart argued that it was exempt from obtaining consent under the Privacy Act 1988 (Cth) due to the need to address unlawful activity. However, the Commissioner found the collection indiscriminate, disproportionate, and of limited utility in preventing fraud. Less privacy-intrusive alternatives were available, and the impact on thousands of individuals not suspected of wrongdoing was unjustified.

The Office of the Australian Information Commissioner has also published guidance for entities considering FRT, emphasising proportionality, transparency, and governance.

AFCA reinstates UGC membership to support consumer complaints

AFCA has temporarily reinstated United Global Capital Pty Ltd (in liquidation) (UGC) as a member until 5pm AEST on 31 March 2026. The move allows consumers affected by the collapse of the Shield and First Guardian Master Funds to lodge complaints relating to financial advice received from UGC or its authorised representatives.

UGC was originally expelled from AFCA on 31 May 2025 following its entry into liquidation and the cancellation of its AFS licence. However, AFCA received new information indicating that many consumers were unaware of the link between UGC’s advice and the failed funds, and some missed the opportunity to lodge complaints. The reinstatement is a targeted, time-bound decision made under exceptional circumstances. AFCA has notified UGC’s liquidator and ASIC, and continues to work with stakeholders to ensure affected consumers receive accurate information. Complaints must be lodged by 31 March 2026.

Rest pays ASIC penalty over insurance missteps

Retail Employees Superannuation Pty Ltd (Rest), trustee of Rest Super, has paid two infringement notices totalling $37,560 following ASIC allegations of false or misleading representations. Between June 2024 and January 2025, Rest issued annual statements and emails to over 2,000 members indicating they held active insurance cover, despite those members having previously cancelled, declined, or lost such cover.

ASIC alleges Rest misrepresented its right to activate insurance and deduct premiums from members’ superannuation accounts. ASIC considers this a breach of consumer protection laws under the Australian Securities and Investments Commission Act 2001 (Cth). Rest paid the notices on 22 September 2025. Payment is not an admission of liability.