The Australian Securities and Investments Commission (ASIC) has suspended the credit licence of PAID International Ltd because it is insolvent and stopped providing loans.

The suspension will last until April next year.

The company kept trading even after an external administrator was appointed in January this year.

The administrator agreed to repay close to $1 million to 6,650 customers who were charged excessive fees on over 20,000 loans.

The company - which was once known as First Stop Money - has refunded nearly $240,000 of that money so far.

ASIC has also cancelled the credit licence of a PAID subsidiary company called Leadfish.

ASIC investigators found PAID was unlawfully charging consumers in NSW and the ACT a fee of up to $59.50 to pay back loan money electronically instead of by cheque.

Additionally, ASIC found PAID had not complied with general conduct, responsible lending, advertising and disclosure obligations under consumer laws.

It comes after PAID was fined nearly $31,000 last year for advertising that offered “instant decisions” and loan approvals “within minutes” online, which were found to be misleading

It is part of a bigger crackdown on payday lenders by ASIC.

The regulator fined bankrupt payday lender The Cash Store a record $19 million for breaking consumer credit laws.

It was the largest civil penalty obtained by ASIC.

ASIC says payday lenders – which are known for targeting low socio-economic groups with high-interest loans - need to lift their standards