Payday lender Nimble forced to pay back $ 1.5 million to clients
Nimble targets young people
Nimble’s slogan “Smart Small Loans” offers quick loans from $ 500 to $ 5,000 with very high interest rates. Its advertisements target young people, prompting them to take out repeated loans for current expenses.
Scott Pape, an independent financial advisor known as The Barefoot Investor, called the payday lending industry “incredibly dangerous” for consumers, in an interview with CHOICE.
“In my opinion, Nimble tries to be hip and cool and acts like a tech start-up, [but] they are not. Bankers have been conning people for hundreds of years. There is nothing new about what they are doing, they are just exploiting people who have low financial literacy, ”says Pape.
Payday loan industry collapses
Erin Turner, Campaign Manager for CHOICE, says the payday lender business model makes money by taking advantage of people in dire straits.
“Last year, CHOICE gave the entire payday industry a Shonky for their questionable products and predatory behavior. ASIC’s action resulted in a heavy fine against a major lender and will see l ‘money directed towards free, independent financial advice for people struggling with debt,’ says Turner.
ASIC Vice-President Peter Kell said the payday lending sector remains an area of high priority for the Commission.
“This is an important outcome for financially vulnerable consumers,” says Kell.
Nimble chief executive Sami Malia said Nimble regrets the inconvenience caused to affected customers.
“Nimble quickly identified and resolved these issues. They received around 1.2% of the loans taken out during the period from July 1, 2013 to July 22, 2015, ”explains Malia.
“These app evaluation issues were completely unintentional and were resolved in collaboration with ASIC. There were no adverse findings against Nimble.”
Next Steps for Nimble Customers
Consumers are encouraged to contact Nimble if they believe they have received an inappropriate loan. If they are not satisfied with the response, consumers can file a complaint with the Credit and Investments Ombudsman.