ASIC has ordered that Coral Coast Distributors (Cairns) Pty Ltd can no longer sign-up customers into Centrepay credit arrangements in its Urban Rampage stores. The decision comes after ASIC found that those arrangements were unsuitable for consumers in Coral Coast’s target market because they were unlikely to be consistent with their financial situation and placed them at risk of financial hardship.

ASIC Commissioner Alan Kirkland said, “Coral Coast targeted First Nations consumers who received Centrelink payments. After entering into Centrepay credit arrangements at Urban Rampage stores, many of these consumers found themselves without money to pay for essentials. It is unacceptable for businesses to use credit-like facilities in a way that places vulnerable customers into hardship.

“This is ASIC’s first final stop order under the design and distribution obligations regime. Other businesses that use this model should reflect on this decision and consider whether their own practices comply with the law. Addressing harm impacting First Nations Australians is a key priority for ASIC and we continue to work closely with financial counsellors and advocates in regional and remote communities to understand the challenges those communities face. Where ASIC sees conduct that places First Nations consumers at risk of financial harm, we will act to stop it,” concluded Mr Kirkland.

ASIC made the stop order on 24 April 2024.