The Indigenous Consumer Assistance Network (ICAN) has strongly welcomed the release of ASIC’s landmark report, Lifting the bonnet: ASIC’s review of car loans, which confirms longstanding concerns raised by ICAN about harmful practices in the car finance industry.
ICAN has repeatedly raised issues with regulators about the impact of car sales and lending practices on consumers in North Queensland, including lodging multiple complaints. Led by ASIC’s Indigenous Outreach Program, ASIC investigated the lending practices of 8 car lenders and found significant indicators of consumer harm. The findings reflect what financial counsellors in the region are seeing every day: consumers placed into unaffordable loans, facing high costs, limited access to hardship relief and ongoing debt even after losing their vehicles.
The findings highlight wide variations in loan costs, with interest rates and fees (in the case of one lender up to $9,000) contributing to substantial financial pressure, with people on the lowest incomes paying more in fees. It also confirmed ICAN’s concerns that the price of vehicles sold under finance were significantly higher than the actual value of the car.
Importantly ASIC’s review considers lending practices in remote and regional communities.
Serious concerns about lender conduct impacting communities in Far North Queensland
ASIC identified concerning lending patterns in postcode 4871, which includes Yarrabah. The report found that one lender, Rapid Loans:
- accounted for a significant share of lending in the area, with 24% of loans reviewed
- was more likely to lend to consumers in the area who are on lower incomes, between $24,000 and $48,000 per year
- had a high default rate with 84% of customers in the area experiencing at least one default
These findings point to lending practices and product settings that are misaligned with people’s financial circumstances, resulting in disproportionately high levels of default and financial stress. In communities where access to a reliable vehicle is essential for maintaining connection to work, education, culture and family responsibilities, people are making deliberate and necessary financial decisions to stay mobile and engaged. However, ASIC’s findings indicate that the products being offered are often structured in ways that undermine those efforts, exposing people to avoidable risk.
ICAN notes that the impact of these lending practices is especially felt by regional and remote Queensland, where access to fair and appropriate credit options is limited. In this context, communities are being exposed to higher-risk products and practices, rather than being supported with safe, affordable financial options.
“This report puts into evidence what we see every day across Cape communities, Yarrabah and beyond” said ICAN Financial Counsellor, Alex Price-Busch. “People are taking out substantial loans just to live their lives: get to work, school or the doctors, but too often those loans are set up to fail. We work alongside people to rebuild after defaults and hardship, but they shouldn’t be put in that position in the first place.”
ICAN CEO, Aaron Davis said ASIC’s report is an important step toward accountability in a sector that has caused real harm:
“ASIC’s focus on used car finance and its impact, particularly on regional, remote and First Nations consumers is critical. This must now translate into sustained regulatory oversight and structural reform to ensure that finance products are safe, affordable and fair.”
Car Dealers & Brokers contributing to poor outcomes
ASIC’s review also found that car loan providers rely heavily on third-party brokers and dealers, often distancing lenders from consumer outcomes. ICAN notes this highlights the need for clearer accountability across the full lending chain.
Aaron Davis reiterated ICAN’s call for:
- stronger oversight of lenders and brokers operating in regional and remote areas
- genuine accountability and remediation where consumer harm has occurred
For communities across North Queensland, access to a vehicle is essential, not optional. Ensuring that financial products support, rather than undermine that access is critical to economic participation and wellbeing. ICAN will continue to work alongside communities, regulators and industry to ensure the findings of this report lead to meaningful and lasting change
Media contact Jillian Williams, Advocacy Manager, ICAN 0488 225 527