The major bank and big law ties to Cigno Australia – one of the country’s most persecuted payday loan ventures
Consumer law experts say big banks and law firms should cut ties with controversial pay day lender on the Gold Coast, which has been operating illegally. The federal court found Cigno Australia helped hand out 30 million dollars in fast cash loans without holding a credit licence, and then charged 70 million more in ‘prohibited’ fees.
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TVTranscript
00:00A former super rugby player who enabled fast cash loans through his company Signo Australia
00:08by referring clients to another lender.
00:11People are resorting to these loans when they can't make ends meet.
00:15So we see Signo loans being used to afford essentials like putting food on the table.
00:22Or in the case of this woman, to fuel a gambling habit.
00:25Yeah, I was using them constantly for several years.
00:30Despite knowing the risky practice would also accrue fees.
00:34Sometimes you're not really focused on how much you're paying in fees, you're focusing
00:41on the fact that you don't have money to buy yourself lunch the next day.
00:45Court documents show the loans attracted no interest, but instead slugged clients with
00:51things like account keeping fees or default fees.
00:55One $250 loan attracted charges of $828.
01:01Many of these loans in fact were illegal and operating outside of credit laws.
01:07A civil court action by the corporate watchdog found in just 11 months over 100,000 customers
01:13were lent $34 million but charged more than $70 million in fees.
01:20A money trap the court found illegal because the lender in Signo Australia did not hold
01:26credit licences.
01:28The model operates in the fringes of regulation.
01:32While the venture was based from this no frills building in Southport, court and financial
01:37documents obtained by the ABC reveal a sophisticated operation.
01:42Bank accounts including from ANZ were used for loans.
01:46Big law firm Piper Alderman provided advice on loan structures while collection agency
01:51Milton Graham chased debts.
01:54Services that are all legal but under intense scrutiny.
01:59The widespread harm that Signo loans and related loans have caused to consumers is very well
02:06documented.
02:07I would suggest that businesses associating with Signo might reconsider that association.
02:13The companies are repealing the court's decision.