Rough diamond deal

A BURLEIGH HEADS payday loan company has been fined $250,000 for a loan scam which used non-existent diamond sales as a cover.

The Burleigh branch was just one of multiple Fast Access Finance franchises which used the scam, which was designed by the company’s head office.

Fast Access Finance Burleigh Heads forced those seeking payday loans to sign contracts for the purchase or the sale of diamonds when they were seeking small loans.

But no diamonds ever changed hands and Fast Access Finance used the contracts as a way to charge excessively high interest.

Under Australian law finance companies cannot charge interest higher than 48 per cent.

The fake diamond sales contracts were used to camouflage the illegal loans and force those seeking small loans to pay excessively high interest rates.

The Federal Court judgment by Justice Alfred Dowsett said the loan amounts varied between $500 and $2000.

Between August 2010 and February 2012, the Burleigh Heads branch offered the illegal contracts to four customers on 14 occasions.

Mr Dowsett said was clear the conontracts had been n sold to franchisees as a “trading model”.

“The idea of selling diamonds to people ople who it came looking for small loans, and expecting to pay high interest rates, borders on the ridiculous,” the judgment said. Mr Dowsett said Fast Access Finance went to some trouble setting up and operating what he termed the “diamond model” and was exploiting its franchisees. “Altho “Although the excessive i interest paid by ea each customer m may not have b been large in absolu solute terms and by some s standards, it was no doubt substantial for the customer in question,” he said.

“Such customers have little chance of recovering anything from the respondents.

“The most heinous aspect of the case is the deliberate and premeditated exploitation of these vulnerable people.”

The Burleigh branch was fined $250,000 for its part in the scam while the company was fined $400,000 as a whole.

The Beenleigh branch was fined $80,000 for three advances it made to two customers between August 2010 and February 2012.