Payday lender Nimble Australia will refund $1.5 million to more than 7,000 customers after an ASIC investigation raised concerns it did not meet responsible lending obligations.

Key points: ASIC found failures to properly assess borrowers' financial circumstances

ASIC found failures to properly assess borrowers' financial circumstances 7,000-plus customers to receive total of more than $1.5 million

7,000-plus customers to receive total of more than $1.5 million Nimble says "no adverse findings" made against it

Nimble says "no adverse findings" made against it Four Corners investigated payday lending

The Australian Securities and Investments Commission probe found that Nimble failed to consistently recognise where consumers had taken out repeat loans from payday lenders.

It also found that Nimble failed to make proper inquiries about borrowers' financial circumstances and needs.

Overall, the corporate watchdog found Nimble was "failing to meet its responsible lending obligations".

ASIC's deputy chair Peter Kell said it is a significant outcome for financially vulnerable customers.

"This remains a high priority area for ASIC, and we expect the industry to continue to lift its game," he said in a statement.

Nimble settled the matter with ASIC by agreeing to refund in excess of $1.5 million to 7,000 affected customers, as well as making a $50,000 contribution to Financial Counselling Australia.

The payday lender also agreed to engage an external compliance consultant to ensure that it complies with consumer credit laws, and will have to report back to ASIC.

'No adverse findings against Nimble'

In a statement, the online and mobile app-based lender said only a "small number of customers" were affected, and it has cooperated with the regulator.

"Nimble has identified and promptly resolved these issues," said the company's chief executive Sami Malia in a statement.

"They affected around 1.2 per cent of loans written during the period from 1 July 2013 to 22 July 2015.

"There have been no adverse findings against Nimble."

Nimble said it will refund fees paid on the affected loans.

Payday lenders under heavy scrutiny

The sector has been under pressure from the regulator after Four Corners reported on widespread irresponsible lending within the sector.

It has also been hit by the withdrawal of funding from Australia's big four banks.

ASIC defines payday lending as a loan of up to $2,000 that must be repaid within 16 days to one year.

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Data compiled by ASIC found the payday lending industry loaned $831 million in the 2014-15 financial year, with an average loan size of $568.

The association representing the industry estimates that it has almost a million customers.

The chief executive of the National Credit Providers Association Phil Johns said any unscrupulous players would not last long.

"Any lender who is focused on sales and not compliance will not be in business in five years' time," he predicted.

"It is clear, under principles-based legislation, lenders must take the most conservative view of the law, not necessarily the rule of law."

ASIC said its agreement with Nimble stipulates that the refunds must be completed within six months.

The regulator said any consumers who feel they entered into an unsuitable loan with Nimble should contact the company in the first instance and then the Credit and Investments Ombudsman if they are unsatisfied with Nimble's response.