In the recent Federal Court of Australia decision, Australian Securities and Investments Commission v Venture 5 Group Pty Ltd [2026] FCA 1278, it was held that Venture 5 Group Pty Ltd (Venture) trading as CashnGo (CashnGo) had relied upon unfair contract terms, resulting in loss or damage to their consumers. Due to the significant number and nature of the breaches, Venture was ordered to pay $3.5 million in pecuniary penalties.
Brief facts
While we do not propose to provide a detailed background, in short, CashnGo were primarily providing online loans to consumers. At the time of entering into the loan agreements, consumers were required to provide their internet banking login details and passwords, or, if the financial institutions were incompatible, consumers were required to connect their bank account to a third-party service provider. Both processes required authority for CashnGo to access such accounts, allowing CashnGo to extract transaction data from the bank account (the Authority Terms).
Of note, only minimal checks were undertaken regarding a consumer's financial position or their ability to repay the loan, prior to having the application accepted.
Importantly, the agreements contained a default recovery term which, in the event of default by the consumer, gave CashnGo authority to access the bank accounts and seek recovery of any such funds without any prior notice to the consumer (the Default Term). This included making, or attempting to make, withdrawals from the accounts and/or making withdrawals as soon as money entered the consumers account, potentially leaving consumers with insufficient funds for basic living expenses. While there were some limitations imposed, such thresholds were incredibly low and, in some instances, the algorithm did not apply these thresholds.
The Law
Under the Australian Securities and Investment Commission Act 2001 (Cth), a contract term will be unfair if it:
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Creates a significant imbalance in the parties' rights and obligations; and
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Is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and
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Would cause detriment if it were relied upon.
Application and Outcome
Again, while we do not propose to go through all breaches and findings, in relation to the Default Term and the Authority Terms, it was ultimately held that the terms were unfair on the basis that they:
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Caused a significant imbalance in the parties' rights and obligations;
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Extended well beyond what was reasonably necessary to protect the legitimate interests of CashnGo. While it was agreed that CashnGo had a legitimate interest in ensuring appropriate rights to recover upon default, it was common ground that it was not reasonably necessary to confer the breadth of such a right; and
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Would cause detriment (whether financial or otherwise) to the consumers if relied upon, as it would likely result in them losing control over their finances, resulting in various outcomes, including financial hardship.
It was noted that while consumers were ‘directed' to read and consent to the contractual documents during the application process, there was no requirement to actually click on and view the contractual documents prior to finalising an application. Further, other than by inclusion in the documents, CashnGo did not disclose the content, nor the effect of the terms on the consumer prior to the commencement of the loans. It was accepted that consumers, as reasonable readers, would not have understood the breadth of authority and access being granted to CashnGo.
Observations
While this case relates to consumer loans, it is a timely reminder for all financial services providers that care is required when drafting contracts with potentially unfair contract terms. Some key takeaways for our clients include:
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Noting the size, sophistication and nature of most of our clients, the potentially significant imbalance between the parties will be a relevant factor;
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Caution should be exercised when issuing standard form contacts where consumers have no real ability to negotiate amendments;
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Even where a legitimate interest is being protected, care should be exercised when crafting the breadth and application of such protections. A term is likely to be deemed unfair, if the right goes beyond what is legitimate in the circumstances;
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Ensuring that a reasonable person can readily understand the practical operation and consequence of a contract term. Transparency should remain at the forefront in such transactions;
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If a particular clause is likely to cause detriment to a party if relied upon, whether intended or not, this may support the finding that the term is unfair;
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Genuine caution should be exercised when drafting clauses which have unilateral application, for example, a unilateral limitation of liability clause which creates significant imbalance under the agreement; and
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With an ongoing shift toward online engagements, it would be prudent to establish parameters which require consumers to positively confirm that they have opened and read the contractual documents, before being given the option to accept.
To read the complete Federal Court decision, follow the link here: 26-203MR ASIC v Venture 5 Group Pty Ltd - Judgment - 31 Aug 2026
If any of the above resonates with your organisation and you would like to discuss further, please contact MM Legal+.
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