TUTORIAL PROBLEM WEEK-8 Question #1 Casino Cash (CC) engages in the business of providing short term credit without credit license (CC relies on the exemption under s.6 of National Credit Code). CC has widely promoted its short-term credit product through advertisements stating CC understands you better than banks. We do not turn away customers with bad history, no long wait times and paper works, emergency cash for you. CC provides credit from $50 to $1000 for a maximum of 60 days, where clients will have to make the repayments as weekly instalments. CC receives referrals from licensed payday lenders who pass on the contact details of customers who have been assessed as ineligible to obtain a small amount credit contract. CC has business arrangements with Collect Services (CS) for providing application, management and collection services for CCs clients (collateral services). CCs credit agreement documents include a separate agreement for the services provided by CS. CC imposes a non-interest charge equal to 2% of loan as account establishment fees. However, CS charges a credit supply fee (up to 125% of loan amount based on the number of instalments), $5 per week as account maintenance charges and collection charges up to 25% of the loan amount. The default fees charged by CS is $150 and $350 for the first default and the second default respectively (which includes change of payment date/amount fee, payment reschedule fee, dishonored payment fee, collections phone contact fee, collections tracking fee). Also, direct debit is the only loan repayment option made available for clients. When combined, these fees can add up to 900% of loan amount. Since the fees are charged by CS under a separate services agreement, rather than under the credit contract, the regulatory protections under National Credit Act are not available for their clients. ASIC is concerned that the particular model designed by CC and CS for short- term- small-amount credit is predatory in nature and detrimental to vulnerable and low-income customers. You are employed with ASIC and have been asked to review the short-term credit lending model implemented by CC and CS to assess the possibility of issuing product intervention order. Prepare a report summarizing the legal and statutory provisions for issuing product intervention order with an independent assessment on its application on short term lending model deployed by CC and CS