Australia’s last-resort compensation scheme has led ASIC to cancel Easy Plan’s credit licence after an unpaid AFCA determination—an automatic consequence that now matters to BNPL and embedded-credit providers.
Australia’s securities regulator has cancelled the credit licence of Easy Plan Financial Services after the country’s Compensation Scheme of Last Resort (CSLR) paid A$84,600 to a consumer for an AFCA determination the firm failed to honour.
ASIC says it cancelled the licence on August 20, 2025, after CSLR notified it of the payment made on August 14, 2025. Under the framework, once CSLR pays and notifies ASIC, the regulator must cancel the firm’s licence. There is no merits review.
The decision underscores how CSLR—operational since April 2, 2024 and able to compensate up to A$150,000 per claim—has become an enforcement backstop for unpaid AFCA awards.
ASIC notes it has already cancelled multiple AFS and credit licences since CSLR went live, positioning the scheme as a clear deterrent for firms that fail to comply with consumer redress decisions.
Australia’s consumer redress chain runs through AFCA, CSLR and ASIC. If a customer wins an AFCA determination and the firm does not pay, the Compensation Scheme of Last Resort can step in and pay up to A$150,000 once other avenues are exhausted.
When CSLR pays and notifies ASIC, the regulator is required to cancel the firm’s Australian financial services or credit licence, with no discretion and no merits review.
Key details:
- AFCA determination: March 18, 2022; CSLR payout: Aug 14, 2025; licence cancelled: Aug 20, 2025; amount A$84,600.
- CSLR: operational since Apr 2, 2024; pays up to A$150,000 per eligible claim.
- BNPL reforms: effective Jun 10, 2025; ACL required; ASIC guidance warns providers operating without an accepted licence application risk unlicensed conduct.
Since June 10, 2025, buy-now pay-later (BNPL) and other low-cost credit models sit inside the National Credit regime, so providers and relevant intermediaries must hold an Australian credit licence and be AFCA members.
For payments businesses that embed credit at checkout, this turns unpaid AFCA awards into a licensing risk, making it essential to monitor partner licences, settle awards promptly and design controls that avoid triggering the CSLR cancellation mechanism.
International parallels
In the UK, the Financial Conduct Authority now explicitly says it may cancel a firm’s authorisation if it does not comply with a Financial Ombudsman Service (FOS) award – an enforcement lever formalised in the FCA Handbook (July 2025).
That ties dispute-resolution outcomes to licensing, similar in spirit to ASIC’s use of CSLR, albeit at the FCA’s discretion rather than automatically. Historical cases also show the FCA pursuing firms that ignored FOS awards, including recommending permission cancellations.
In the US there’s no national ombudsman equivalent, but regulators still connect redress and licensing. The CFPB can pay victims from its Civil Penalty Fund when companies don’t or can’t pay, while state regulators frequently revoke or force surrender of licences when firms fail to comply with orders that include restitution.
Recent examples include California DFPI revoking BlockFi’s lending licence and, separately, a settlement requiring a lender to refund borrowers and surrender both of its California licences. New York’s DFS, meanwhile, routinely couples penalties and remediation (and, in some cases, monitors) with money-transmitter and virtual-currency oversight—linking conduct failures to licensing outcomes even if not via an ombudsman award.
