Former Smart50 finalist Paid International has entered voluntary administration, just months after the online finance provider agreed to refund $1.128 million to customers who were charged excessive loan fees.
Ian Francis and John Park of FTI Consulting were appointed administrators of Paid International on January 22. The first meeting of creditors is scheduled to take place in Perth on February 4.
A spokesperson for FTI Consulting told SmartCompany* the administrators are currently “in the very early stages of reviewing all aspects of the business, including its investigations as to the reasons why the company was placed in voluntary administration”.
“A restructuring proposal is being proposed by Paid International’s directors, which will assist in determining the most likely pathway for the company’s future,” the spokesperson says.
Paid International was founded by chief executive Tim Dean (pictured above) from his home in 2009 and grew rapidly, turning over a million in revenue in its first year of trading.
Initially offering small, short-term loans as a way of filling a gap in the microfinance lending market in Australia, the company later expanded to offer a range of loans from a variety of brands including Cash Train, Ca$h2Go and HandyCASH.
The business also includes two subsidiary companies: Mr Tax Refund, a tax returns and finance group; and Lead Fish, a lead generation company.
In the 2013-14 financial year, Paid International turned over $12.3 million, up 50% from $8.2 million in the year before.
The company’s loan book also increased by 120% during that time, from $3.9 million to $8.7 million.
The appointment of administrators follows an eventful 12 months for Paid International, which revealed its intentions to list on the Australian Securities Exchange in March 2014.
In April, Paid International was fined $30,600 by the Australian Securities and Investments Commission for misleading advertising on a number of websites operated by Paid International at the time.
In October, the company entered into an enforceable undertaking with ASIC to repay $1.128 million to 6650 consumers in relation to 20,273 loans.
An ASIC investigation has found Paid International unlawfully charged customers in some states a fee of up to $59.50 to pay the loan money into their bank accounts electronically and failed to comply with its general conduct, responsible lending, advertising and disclosure obligations.
ASIC found Paid International added the fee to the loan amount as an additional amount repayable by consumers, and it significantly exceeded the actual fees that Paid International incurred in arranging an electronic transfer.
SmartCompany contacted Paid International but the company declined to comment.
*The article was updated at 2pm on January 27 to include comments from FTI Consulting.