Money3 Ordered to Pay $1.02 Million After Court Finds Lender Left Vulnerable Borrowers Exposed

Key Takeaways

• Court Finds Serious Lending Failures: Money3 Loans was fined $1.02 million (AUD $1.55 million) by the Federal Court of Australia for breaching responsible lending obligations across five car loans.
• Breakdown in Inquiry and Verification: The Court found Money3 failed to properly assess and verify borrowers’ financial situations, despite having access to bank data that could have informed responsible lending decisions.
• Impact on Financially Vulnerable Borrowers: The misconduct involved individuals excluded from mainstream banking, underscoring the heightened risk and regulatory scrutiny in non-bank lending markets.
• Warning to the Industry: Justice McElwaine stressed that responsible lending obligations are not procedural formalities but central to consumer protection, signaling expectations for all lenders.

Deep Dive

When Australians who can't get a bank loan need a car, they often turn to lenders like Money3. The company has built its business precisely on that gap — offering vehicle finance through brokers and dealerships to people locked out of the mainstream. It's a service that, done right, can be genuinely valuable. Done wrong, the consequences land on people who can least afford them.

On Monday, Australia's Federal Court ruled that Money3 Loans had done it wrong, at least five times. The court ordered the company to pay penalties of $1.02 million (AUD $1.55 million) for breaching the responsible lending obligations that exist to protect exactly these kinds of borrowers.

The case centers on five car loans issued by Money3 between May 2019 and February 2021. Under Australian credit law, lenders are required to make reasonable inquiries into a borrower's financial situation, including their living expenses, before approving a loan. They're also required to verify that information. Money3, the Court found in September 2025, did neither, despite holding bank statement transaction data that could have informed those assessments.

In one of the five cases, the failures went further. Money3 also neglected to properly inquire into what the borrower actually needed the loan for, a basic step the law treats as non-negotiable.

"The failures were serious and they undermine the very purpose of the licensee responsible lending obligations," Justice McElwaine, Federal Court of Australia stated.

Justice McElwaine was unsparing in his assessment. The penalties were warranted not just to send a message to Money3 specifically, he said, but to signal to the broader lending industry that the obligations around inquiry and verification are not administrative box-ticking, they are the point. "All licensees," he noted, need to understand that.

For ASIC, the regulator that brought the case after launching proceedings in May 2023, the ruling validates what its Chair Joe Longo described as a difficult but necessary pursuit. "Responsible lending cases like this one are challenging but important to take on," Longo said, acknowledging the role that consumer advocates and affected borrowers played in getting the case across the line. Without their evidence, he suggested, it might not have been possible.

Joe Longo, ASIC Chair, said, "This penalty reflects the contraventions the Court found in relation to Money3's misconduct."

The decision lands squarely within ASIC's stated 2026 enforcement agenda, which includes a specific focus on misconduct that exploits people facing financial difficulty (predatory lending chief among them). The regulator also maintains ongoing priorities around conduct that harms First Nations communities and financially vulnerable Australians more broadly, two groups that have historically been overrepresented among borrowers in the non-bank consumer lending space.

Costs from the proceedings are yet to be determined, with the Court to address that separately at a later date.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.