The Australian Securities and Investments Commission (ASIC) recently lost a court trial against a store owner who runs a so-called ‘book-up’ scheme, says The Guardian. The high court decided against ASIC’s claims charging Linsday Kobelt, owner of “Nobby’s” general store of running a book-up scheme.
Another report by The Guardian says that Kobelt’s scam gives customers permission to avail of goods. This includes second-hand cars. The catch is that customers are required to leave sensitive information including bank cards and pin codes.
The store owner then withdraws a large chunk of customers’ salaries and welfare benefits. As a huge amount of their money goes toward paying the debt, buyers are left with a meagre portion for everyday living and necessities.
Through the scheme, Kobelt was able to swindle around $1 million from almost 85 accounts from book-up buyers in the span of 2010 to 2012. The owner is also guilty of referring to customers in his diary using obscene words such as “slut” and “bitch.”
In the beginning, the suspect was deemed guilty of violating the Australian credit laws. He was also found to be engaging in ‘unconscionable’ conduct at first.
However, his appeal to the high court proved to be favourable for him as the finding regarding the ‘unconscionable’ act was overturned. Moreover, the court remarked that the book-up scheme is rampant in remote places in Australia. It also noted that Indigenous communities are frequent users of this scheme.
Located in Mintabie in the Anangu Pitjantjatjara Yankunytjatjara (APY Lands), the Kobelt’s victims are usually Indigenous individuals, specifically the Anangu people. The Guardian notes that the Indigenous community lacks in financial literacy, making them vulnerable to these schemes.
The APY Lands are known as a local government area for Indigenous communities in Australia.