Online payday lenders under scrutiny following Nimble investigation

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Online lenders using algorithms to assess consumer credit are in the spotlight following corporate watchdog action against payday lender Nimble.

Nimble was forced to repay $ 1.6 million to more than 7,000 customers after it was discovered he was indulging in irresponsible lending.

Companies like Nimble can no longer target ads through Google.

The business regulator, the Australian Securities and Investments Commission, said it was continuing to monitor the troubleshooting industry “as well as other credit licensees and their representatives.”

This included all companies offering consumer or business loans, as well as interest-only home loans using online processing.

“ASIC has raised concerns about meeting responsible lending obligations across the spectrum of credit providers in general,” a spokesperson said.

An investigation into Nimble found that the lender used algorithms to assess customers who did not properly take into account consumers’ financial information.

The company also failed to acknowledge whether consumers had secured repeat loans from payday lenders within a short period of time. When Nimble identified repeat loans, he failed to take the steps required by law before granting a loan to the consumer.

The payday lender industry body, the National Credit Providers Association, distanced itself from Nimble on Thursday.

“Any lender that focuses on sales and not on compliance will be out of business in five years,” said managing director Phil Johns.

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