The Federal Court has found a Sydney car dealership and its former director liable for providing unlicensed car loans and charging consumers excessive interest rates in what represents the Australian Securities and Investments Commission’s (ASIC) first civil proceeding against a car dealer for unlicensed credit activities.
Diamond Wheels Pty Ltd, trading as Lansvale Motor Group, and Keo Automotive Pty Ltd provided car loans to consumers without holding an Australian Credit Licence between 2014 and 2024. The court also found Ken Keomanivong, a director of Keo Automotive and former director of Diamond Wheels, liable for his central role in establishing and operating the unlawful lending schemes.
Justice Lee ruled that the companies charged consumers unlawful and excessive interest rates, with ASIC alleging that in many cases consumers were charged almost double the lawful amount of interest.
The three parties admitted the contraventions following 19 months of litigation.
ASIC Chair Sarah Court said consumer protections under credit laws are not optional, emphasising the significance of the enforcement action.
“This is the first civil proceeding ASIC has commenced to address unlicensed credit activities by a car dealership, and it sends a clear warning: dealers that offer finance without the proper licence can expect ASIC scrutiny and enforcement action,” Court said.
Extensive unlawful lending operation
Diamond Wheels operates a new and used car dealership in Cabramatta in south-west Sydney and has been family-run since about 1995. The business is described as one of Australia’s largest family-owned motor dealerships.
Keomanivong served as a director of Diamond Wheels from March 1995 to July 2024 and has been a director of Keo Automotive since August 2019.
ASIC’s case against Diamond Wheels concerns conduct from September 2018 to December 2019, during which time it was the credit provider under 205 credit contracts and received almost 6000 unlawful payments.
From January 2020 to August 2023, Keo Automotive provided credit to consumers under 119 loan contracts. Between December 2019 and April 2024, it received almost 18000 unlawful payments under those contracts and many of the contracts previously entered by Diamond Wheels.
Neither company has ever held an Australian Credit Licence nor been authorised to engage in credit activities, despite providing hundreds of car loans over the decade-long period.
ASIC alleged that the contraventions stripped consumers of vital protections under credit laws, with many customers facing interest charges significantly above legal limits.
A further hearing on penalty and other relief is scheduled for 20 August 2026.
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