The Australian Securities and Investments Commission (ASIC) has cancelled the Australian credit licence of Ferratum Australia Pty Ltd (in liquidation) following a payment of compensation by the Compensation Scheme of Last Resort (CSLR).

On 30 April 2024, the Australian Financial Complaints Authority (AFCA) made a determination against Ferratum, which Ferratum failed to pay. Subsequently, on 18 September 2024, the CSLR paid $1,297.00 to a person for the AFCA determination and notified ASIC. As a result, on 4 October 2024, ASIC cancelled Ferratum’s credit licence.

Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the Australian financial services (AFS) licence or credit licence of the firm.

The cancellation is not subject to discretion or merits review.

This decision is not ASIC’s first regulatory action in relation to Ferratum, which is now in liquidation. On 1 November 2021, ASIC commenced proceedings against Ferratum. On 7 September 2023, the Court found that between March 2019 and August 2021, Ferratum breached consumer credit protection laws by charging prohibited fees and overcharging customers in respect of small amount credit contracts.

ASIC’s decision to cancel the credit licence of Ferratum marks the third time ASIC has cancelled a credit licence following the CSLR paying compensation.