As a result of work by its Indigenous Outreach Program, the Australian Securities and Investments Commission (ASIC) issued proceedings in the Federal Court of Australia against Lindsay Gordon Kobelt, who provided ‘book up’ services at his business, Nobby’s Mintabie General Store, to members of the Indigenous community in South Australia’s Anangu Pitjantjatjara Yankunytjatjara Lands.
Book up is a common form of informal credit often used in remote parts of South Australia that allows customers to buy goods and pay for them later. It is generally an informal arrangement with no set repayment dates or formal documentation.
In November 2016, the Federal Court ruled that Mr Kobelt had engaged in unconscionable and unlicensed conduct. Mr Kobelt required customers to hand over their debit cards and PINs which allowed him to withdraw all or nearly all of the available funds on the day that the customers were paid.
Mr Kobelt withdrew almost $1 million from the accounts of 85 of his customers.
The Federal Court stated that, “The combined effect of Mr Kobelt taking possession of the customer’s key cards, and using them on the first day of the pay periods, was to deprive the customers of independent means of obtaining the necessities of life.”
The Federal Court ordered that Mr Kobelt hand over the customers’ debit cards to ASIC, which would be returned to the customers or their financial institution. The court will consider the penalty it will impose on Mr Kobelt at a hearing in February 2017.
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If you have been effected by the practices of a book up store, you can call the Consumer Credit Legal Service (WA) for advice on (08) 9221 7066.