A search by the Australian Securities and Investments Commission (ASIC) reveals that MyPayNow founder and chairman Shane Powe was previously the director of Sunshine Loans, a payday lender who agreed in 2009 to pay clients $ 684,977 by charging them over the rate cap. fees and charges up to 48 percent per year.
In 2014, Sunshine Loans discovered that ASICs were abusing small lending regulations. In 2014, Sunshine Loans agreed to end business models, which the ASIC said deliberately sought to avoid lending requirements for small amounts.
Shane Powe is Bronson Powe’s father and both declined to comment on the Susnhine Loans connection.
“I didn’t come of age at the time,” Bronson Paue said.
Gabriel Bernard, analyst Viceroy Research short seller, has tracked MyPayNow over the past several months and said the company is like a payday lender.
“Our research shows that there are no credit checks, a limited number of identity checks, no contact with the employer,” he said. “It appears that MyPayNow does not perform Know Your Customer or special checks. There are no targeted checks. It is difficult to perceive this service differently than the payday lender. “
However, Bronson Paue said MyPayNow is different from a payday lender as it always charged a flat 5 percent commission on the money advanced.
“There are no late fees, missed payment fees or any other related fees,” he said. “The amount of MyPayNow advances is directly related to the amount of income that the consumer receives. The amount we advance is limited to a maximum of 25 percent of net consumer income to mitigate any risk of a debt spiral. ”
Ms Temple said regulation is not keeping pace with the influx of new businessmen in this area and called for reforms to ensure that new services are covered within existing structures.
“We would like these providers of payroll advance loans to be regulated under the responsible lending laws, which would mean ASIC, and they would also be members of the AFCA. [the Australian Financial Complaints Authority], “she said.” For now, if you have any problems with MyPayNow, your only option is to go to court or tribunal. “
The Financial Rights Legal Center also monitored MyPayNow, and politician Julia Davis warned that the interest rates charged by MyPayNow were “extraordinary.”
“It has to do with payday loans,” she said. “These guys want to say they are not sharks, but anyone can say that a 200 percent loan is outrageous, this is shark territory.”
According to her, it is necessary to regulate the industry.
“Anyone who starts a company that doesn’t comply with all of our responsible lending laws is doing it on purpose, they call it innovation, but they avoid regulation and just take advantage of a loophole,” said Ms. Davis.