The Australian Securities and Investments Commission has won its case against payday lender Cash Store. The Federal Court has found that Cash Store (which is now in liquidation) and associated company Assistive Finance Australia, breached consumer credit laws and engaged in unconscionable conduct in the sale of insurance.ASIC launched legal proceedings against the companies last year, claiming that Cash Store and Assistive provided unaffordable loans to a large number of their customers, who were on low incomes or were recipients of Centrelink benefits. It also claimed that Cash Store sold insurance in relation to these loans, when it was unlikely that the customers would ever be in a position to make a claim on that insurance.The Federal Court found there was a "systemic failure" on the part of The Cash Store and Assistive to comply with their obligations.In a media statement issued yesterday, ASIC said the court's decision made it clear that, for a meaningful assessment to be made as to whether a loan is suitable, credit licensees must inquire about the customer's current income and living expenses, along with further information depending on the circumstances of the particular consumer involved.The court criticised The Cash Store for actively encouraging staff to sell consumer credit insurance that was almost always inappropriate.