Snaffle charged interest on the full contract price, not the balance, across 38,562 contracts

The finding against Walker Stores Pty Ltd, which traded as the online instalment retailer Snaffle, turns on a single arithmetic choice. Interest was calculated on the total amount of the contract for its whole term, rather than on the amount the customer still owed as they paid it down. Because the balance falls over 12, 24 or 36 months while the notional base does not, the effect is close to a doubling.

The Federal Court ordered a $33.5 million penalty on 18 May 2026, with reasons published on 29 May 2026. The judgment is Australian Securities and Investments Commission v Walker Stores Pty Ltd (in liquidation) [2026] FCA 665, decided by Justice Jonathan Beach. ASIC commenced the proceeding in May 2025.

The conduct covers 38,562 credit contracts entered between September 2021 and 27 February 2025. ASIC states that the miscalculation caused customers to be charged almost $20 million more interest than the law allowed, close to double the lawful amount.

The penalty is split, and the split shows where the court placed the weight. Of the $33.5 million, $1.5 million was imposed for contraventions of the annual cost rate cap and $32 million for the interest calculation contraventions. The National Credit Code caps the annual cost rate on a credit contract at 48 per cent. In three sample contracts examined by the court, the effective credit charge fell between 88 and 103 per cent. Those three breaches drew the smaller share of the penalty; the systematic mis-calculation across tens of thousands of contracts drew the larger.

Justice Beach described the interest calculation contraventions as particularly serious, and said the conduct was of a repetition and scale that undermined the statutory regime, so that substantial penalties were called for. The court also found that many of the affected consumers relied on Centrelink payments as their primary income. Snaffle's model sold household goods, appliances and furniture online and collected the price in instalments, a product that reaches customers who cannot pay up front.

Alongside the penalty, the court ordered adverse publicity notices to be published on the Snaffle and Aspire42 websites for at least 365 days, and ordered Walker Stores to pay ASIC's costs.

The company will not pay any of it in the ordinary way. External administrators were appointed on 9 July 2025, and Walker Stores is now in liquidation. The proceeding was continued and decided against a company already in that condition, and the penalty is a Commonwealth debt ranking with other unsecured claims.

That leaves the position of the 38,562 customers unresolved on the public record. A penalty paid to the Commonwealth is not compensation. The judgment establishes that almost $20 million in interest was charged unlawfully, but no published order tells those customers what they will get back, or from whom, or when. Some contracts were still running when the administrators were appointed, and a loan administration entity has continued to service the book. Nothing in ASIC's announcement states whether repayments collected after the appointment were recalculated on the lawful basis, or how many of the 38,562 contracts have been remediated.

The second open question is reach. The court examined three sample contracts for the annual cost rate cap breaches, not 38,562. The excess interest figure of almost $20 million is an aggregate; the distribution behind it, how much any individual customer was overcharged, and how many crossed the 48 per cent cap rather than merely paying inflated interest below it, has not been published.

ASIC listed the Snaffle penalty among its four largest civil penalty outcomes for the 2025-26 financial year. It is also, on the face of the orders, one that a liquidator will have to rank against everybody else with a claim.