NT retailer forced to stop offering credit to First Nations customers
Clothing and homewares retailer Indy-C has been ordered by the Australian Securities and Investments Commission (Asic) to stop offering credit payment options to First Nations customers due to potential financial risks.
The interim stop order applies to Indy-C’s store in Katherine, a Northern Territory town where many people receive low incomes through Centrelink benefits.
Asic believes entering credit arrangements with Indy-C could result in an increased risk of financial hardship for these customers, as the repayments are deducted from their Centrelink income before they receive their support payment. This carries the risk that they will then be unable to meet essential living expenses.
The regulator is concerned that Indy-C does not assess consumers’ needs or financial capacity before the credit facility is distributed to them.
Given the nature of its business, the retailer must comply with the design and distribution obligations, which require firms to design financial products that meet the needs of consumers in an identified target market.
Asic is working with financial counsellors in Katherine to understand the breadth of this issue and the circumstances of consumers. “Protecting First Nations consumers from harm and misconduct remains a priority,” it stressed.
The interim stop order will last for 21 days unless revoked earlier. Indy-C can make submissions during this period before the regulator decides whether to issue a final stop order.
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