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Car finance lender Money3 Loans, a subsidiary of ASX-listed Solvar Limited (ASX: SVR), has been ordered to pay a $1.55 million penalty by the Federal Court for breaching responsible lending obligations on five loans made to borrowers who were largely or solely reliant on Centrelink payments.
The penalty, handed down by Justice McElwaine, relates to loans entered into between May 2019 and February 2021 where Money3 failed to make reasonable inquiries about or verify borrowers' living expenses despite holding bank statement transaction data that could have informed its assessments.
Justice McElwaine has described the failures as "serious" and said the penalty was warranted as both a specific and general deterrent.
"These matters justify significant pecuniary penalties as a specific deterrent to Money3 to ensure that they are not repeated, but also generally so that all licensees understand the importance of the inquiry and verification steps," he said when handing down the penalty.
"The failures were serious and they undermine the very purpose of the licensee responsible lending obligations."
The case was brought by the Australian Securities and Investments Commission (ASIC), which initiated proceedings against Money3 in 2022.
"Responsible lending cases like this one are challenging but important to take on, given the seriousness of the allegations raised by consumer advocates and the alleged impacts on individuals involved," says ASIC chair Joe Longo.
The Federal Court found Money3 contravened the National Consumer Credit Protection Act 2009 by failing to take reasonable steps to verify expenses for the five loans in question.
The borrowers were receiving Centrelink payments including the Disability Support Pension, JobSeeker and Parenting Payment, yet the lender did not adequately scrutinise their capacity to service the loans.
However, the September 2025 liability judgment rejected several of ASIC's broader allegations.
The court found Money3 had not entered borrowers into unsuitable loans, had not failed to ensure representative compliance, and had not applied arbitrary living-expense benchmarks.
The contraventions ultimately related to only a subset of the regulator's original claims.
In a statement to the ASX today, Solvar CEO Scott Baldwin says the company "respects the decision of the Federal Court".
“Since the period in question Money3 has invested further in its governance, complaints, hardship and underwriting practices lifting group capabilities and setting a stronger foundation from which to grow," he says.
“Money3 remains committed to providing finance for underserviced consumers typically enabling them access to a used vehicle improving their ability to participate in society.”
The penalty comes amid a broader ASIC crackdown on the motor vehicle finance sector.
A separate review published by the regulator in 2025 found loan establishment fees as high as $9,000, with nearly half of all defaulting borrowers falling behind on repayments within six months of taking out their loan.
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