A store that operates in regional Australia claims an ongoing stop order from the corporate watchdog is having disastrous impacts on its First Nations customers.

In late February, the Australian Securities & Investments Commission made an interim stop order preventing Coral Coast Distributors (Cairns) Pty Ltd (CCD) from having customers at its Urban Rampage retail stores enter agreements to pay for goods on credit through Centrepay deductions.

Centrepay is a Federal Government scheme that allows people to buy essential goods and pay them off via regular deductions from Centrelink payments.

ASIC said it was concerned the consumers in CCD's target market are low-income recipients of Centrelink benefits, residing in remote Indigenous communities, without access to other forms of credit.

ASIC said these consumers are vulnerable and at risk of financial hardship, and that many may currently be experiencing financial distress.

ASIC noted it has received complaints through consumer networks and engagements with ASIC's Indigenous Outreach Program, including of CCD customers experiencing financial hardship and presenting for emergency relief after entering Centrepay deduction arrangements.

The corporate watchdog, which extended the stop order on March 15, claimed that nine of the 10 Urban Rampage's nationwide stores were involved in the alleged misconduct.

Urban Rampage's lawyer, Leon Loganathan from Ward Keller, said First Nations customers were very upset the service had been terminated without any consultation with them.

He said Urban Rampage had been flooded with more than 80 formal complaints from First Nations customers who can no longer purchase essential goods on credit.

More than 700 customers have also signed a petition asking for the service to be reinstated.

"It appears this is a case of shoot first and ask questions later," Mr Loganathan said.

"There has been no dialogue with the people most impacted by cutting off Centrepay as a payment option. This is very disappointing action by the regulator.

"For many living in remote areas, Centrepay is not a mere convenience but a necessity, facilitating access to goods that we in the city take for granted but that are otherwise hard to access in those areas."

Mr Loganathan said First Nations people in remote communities had very limited credit options while most other Australians had quick and easy access to buy now pay now later credit services.

"Click and pay for whites, and no credit for Blackfellas is how ASIC's Centrepay stop order is being viewed by First Nations people in remote communities. It's an uncomfortable truth for some, but a truth nonetheless based on the bare facts," he said.

"This is another case of government effectively telling First Nations people how to live their lives. This basically says you are incapable of making sound decisions using Centrepay so you can only pay for goods with cash."

Urban Rampage put out a statement on Tuesday, saying Centrepay helped to level the playing field by offering a form of credit that was fair and accessible.

It claims it has never failed a Centrepay audit since joining the service in 2016.

"Our impeccable record with Centrepay since 2016 speaks volumes," the statement said.

"Under our terms, customers pay no interest, no establishment fee and no penalty for non-payment. In fact, customers can stop payment at any time without penalty. It gives our customers confidence and flexibility. This is what makes ASIC's actions so disappointing, not just to us but to our customers as well."

Urban Rampage said one customer drove three hours to a store to buy clothes for a funeral only to be told Centrepay wasn't available at the moment.

The company said an elderly grandparent told them she had been using the service for years.

"I've got three grandkids who need underwear, walking on the street naked, and there is a family funeral coming this Friday. Rampage has been doing well with this service … it needs a certain time to apply the rules … cut it all of sudden … do I need to Drive to Darwin to get clothes?"

During a hearing on March 15, ASIC made a further interim stop order prohibiting the same conduct covered by the initial interim order.

ASIC will further consider submissions made by CCD during the hearing and reach a decision in due course.