Last week the Australian Federal Court ordered CashnGo, an online credit provider, to pay a penalty of A$3.5 million for including unfair contract terms (UCTs) in more than 47,000 consumer lending contracts. While the penalty is an Australian enforcement outcome (New Zealand’s UCT regime does not include equivalent civil pecuniary penalties), the decision’s analysis of unfairness in consumer lending contracts is instructive for New Zealand. The types of terms declared unfair in CashnGo could equally raise concerns under the UCT provisions in the Fair Trading Act 1986 (FTA), the responsible lending provisions of the Credit Contracts and Consumer Finance Act 2003 (CCCFA), the Conduct of Financial Institutions (CoFI) regime, and, once the Financial Markets Authority (FMA) gains UCT jurisdiction over financial services contracts under the Regulatory Systems (Economic Development) Amendment Act 2025, the Financial Markets Conduct Act 2013 (FMCA).
This alert:
- summarises the CashnGo decision (Australian Securities and Investments Commission v Venture 5 Group Pty Ltd [2026] FCA 1278) and its key themes;
- draws on recent Australian UCT cases involving insurers and payment providers as instructive comparators; and
- considers what this means for New Zealand lenders and financial services providers under the UCT, CCCFA and CoFI regimes.
The CashnGo decision
CashnGo is an online credit provider offering small amount credit contracts (SACCs), being loans of up to A$2,000 repaid within 12 months, and medium amount credit contracts of up to A$5,000 repaid within two years. During the loan application process, CashnGo required consumers to either provide their banking login details and passwords or to connect to a third-party service provider who was able to assist in extracting data from the consumer's bank account.
In proceedings brought by the Australian Securities and Investments Commission (ASIC), CashnGo admitted that its contract terms were unfair. After a consumer missed a repayment, CashnGo’s systems monitored consumers’ bank account balances and repeatedly attempted to withdraw funds as soon as they became available, without notice as to timing, frequency or amount and with no ability to opt out. The contracts also authorised CashnGo to use consumers' internet banking login details to access and monitor their accounts.
Between April 2022 and May 2025, CashnGo entered into more than 201,000 SACCs with over 85,000 consumers, containing unfair terms. In total, it admitted to over 848,000 contraventions, including making contracts containing UCTs and applying or relying on those terms in debt collection.
The unfair contract terms fell into three categories:
- Default and authority terms: these allowed access to, and monitoring of, customer bank accounts and repeated withdrawals as soon as funds became available, without notice to the customer or an ability to opt out.
- Limitation of liability terms: these purported to substantially limit CashnGo’s liability for loss suffered by consumers arising from its acts or omissions.
- Indemnity terms: these imposed one-sided obligations on consumers, requiring them to indemnify CashnGo for a broad range of losses, costs and expenses, including where they arose from intentional or dishonest acts by CashnGo.
While the Court recognised that CashnGo had a legitimate interest in ensuring that its SACCs contained appropriate contractual entitlements to recover amounts owing in the event of default, the breadth of the contractual rights was the key concern. In particular, the breadth of the discretion as to the timing, manner, number and frequency of withdrawals, to protect that legitimate interest, which risked leaving customers with insufficient funds to meet essential living expenses.
Jackman J stressed that the contraventions were “not the result of isolated conduct by junior employees” but arose from “systems, contractual terms and practices of CashnGo’s senior management and directors.” His Honour noted that CashnGo marketed to consumers who needed funds quickly or had poor credit histories, and that the unscheduled withdrawals practice “operated against consumers, some of whom were likely to be vulnerable to financial hardship arising from unexpected and ongoing withdrawals from their bank accounts.” The emphasis on systemic conduct and vulnerable borrowers echoes themes regulators globally, including in New Zealand, have prioritised.
Lessons from across the Tasman: Australian UCT cases in financial services
The CashnGo decision is the latest in a growing body of Australian case law on UCTs in financial services. While the Australian regime now includes direct civil pecuniary penalties for UCT contraventions (which New Zealand’s FTA does not), the underlying statutory test for unfairness largely mirrors New Zealand’s: a term is unfair if it causes a significant imbalance in rights and obligations, is not reasonably necessary to protect the advantaged party’s legitimate interests, and would cause detriment if applied. The Australian cases therefore offer useful guidance on the types of terms likely to be found unfair, even if the enforcement consequences differ.
ASIC v Auto & General Insurance Company Limited
In ASIC v Auto & General Insurance Company Limited [2025] FCAFC 76, ASIC challenged a policy term requiring policyholders to notify Auto & General if “anything” changed. The Federal Court found the term was not unfair, and the Full Federal Court dismissed ASIC’s appeal. It was the first application of the UCT provisions to insurance contracts. The Court found no significant imbalance in the parties' rights and that the term was reasonably necessary to protect the insurer's legitimate interests. The case illustrates that not every broad or consumer-unfriendly term will be declared unfair: legitimate business justifications remain relevant.
ASIC v HCF Life Insurance Company Pty Ltd
In ASIC v HCF Life Insurance Company Pty Ltd [2024] FCA 1240, ASIC challenged a “pre-existing condition” exclusion which suggested the insurer could deny cover for an undisclosed pre-existing condition even where the customer was unaware of it. The term was found not to be unfair. Importantly, this was because the Insurance Contracts Act 1984 already prevented the insurer from excluding cover where a person was unaware of a pre-existing condition when they entered the contract, so there was no significant imbalance in practice. However, the term was found to be misleading and HCF Life was penalised A$750,000. The Full Federal Court dismissed ASIC’s appeal on unfairness in June 2026 (ASIC v HCF Life Insurance Company Pty Limited [2026] FCAFC 81). The takeaway: terms that are ameliorated by other statutory protections may survive UCT scrutiny, but may still attract liability for misleading conduct.
ASIC v PayPal Australia Pty Limited
In ASIC v PayPal Australia Pty Limited [2024] FCA 762, the Federal Court declared PayPal’s “fee error term” unfair. The term required businesses to notify PayPal of fee errors within 60 days or forfeit the right to dispute or recover overcharged amounts. The Court found this was a one-sided restriction on redress that caused a significant imbalance, was not reasonably necessary to protect PayPal's legitimate interests, and would have caused detriment if relied upon. The term was declared void. For lenders, the PayPal decision is a reminder that procedural terms limiting customers’ ability to challenge errors or recover overpayments warrant close scrutiny.
The New Zealand FMA landscape: the CCCFA, CoFI, and the FMA’s expanding UCT enforcement role
The Regulatory Systems (Economic Development) Amendment Act 2025, which received Royal Assent on 29 March 2025, will give the FMA shared jurisdiction with the Commerce Commission over the UCT regime. Once in force, the FMA will be able to seek court declarations that terms in "FMC standard form contracts" are unfair, with Part 2 of the FMCA then prohibiting the use of such terms. The amendments are expected to commence on 15 November 2027, alongside the Contracts of Insurance Act 2024, though the Act provides for commencement by Order in Council no later than 29 March 2028.
Consumer lenders in New Zealand are, however, also already subject to the responsible lending provisions of the CCCFA, for which the FMA now has regulatory responsibility. The type of conduct at issue in CashnGo (accessing consumers’ bank accounts and making repeated unscheduled withdrawals without notice) could raise concerns under the CCCFA’s lender responsibility principles. Financial institutions, including banks and non-bank deposit takers, are separately subject to the CoFI regime, which requires them to treat consumers fairly. Practices that expose borrowers to financial hardship or override their ability to manage repayments could, therefore, in turn raise questions for example, about the effectiveness of a financial institution's fair conduct programme.
The practical significance is that a single contract term or lending practice, such as the unscheduled withdrawals practice in CashnGo, may engage multiple regulatory frameworks simultaneously. Conduct that creates consumer detriment or an unfair imbalance could be pursued under the UCT regime (currently under the FTA, and under the FMCA once the FMA’s powers commence), while also raising, for consumer credit providers, potential CCCFA responsible lending breaches and/or, for financial institutions, CoFI fair conduct concerns. Once the FMA assumes UCT jurisdiction, it will have oversight across all three regimes for relevant financial institutions, enabling a coordinated approach to lender conduct and the flexibility to deploy the most appropriate enforcement tool in the circumstances.
What this means for lenders and financial services providers
The Australian cases point to three practical steps for lenders and financial services providers:
- Review standard form contracts: focus on one-sided discretions or advantages, including around withdrawals, variations, fee adjustments and claim or dispute processes; broad indemnities and liability limitations; and terms that overstate rights or obscure statutory protections.
- Document legitimate interests: record the legitimate interest each term protects, why it is necessary, whether a less burdensome alternative is practicable, and how transparency is achieved. The Auto & General decision shows that a well-articulated legitimate interest can be decisive.
- Take a systems-level view: the CashnGo decision underscores that systemic practices, particularly those affecting vulnerable consumers, attract the greatest enforcement risk. Courts and regulators are looking at how terms operate in practice, not just how they read on paper. This aligns closely with the CoFI regime’s outcomes-focused approach: the FMA will assess whether financial institutions are actually treating consumers fairly, including in how they design products, handle complaints, and remediate issues. The emphasis on systemic conduct and vulnerable borrowers in CashnGo echoes themes that the FMA has also prioritised in New Zealand.
If you would like to discuss the implications of these developments for your standard form contracts, please get in touch.