Today in Brisbane a Senate Inquiry into the out of control pay day loans sector and unregulated ‘buy now, pay later’ sector heard more horror stories of how victims are being ripped off by loan sharks left with thousands of dollars of debt.
Representatives from the Salvation Army and Legal Aid Queensland shared stories of how the out of control pay day loan industry targets vulnerable Australians with promises of easy money but instead find themselves in a debt spiral.
Federal Member for Oxley Milton Dick MP said this issue has been completely ignored by the government who despite repeated promises have failed to protect consumers.
“The Abbott-Turnbull-Morrison Government has spent almost 3 years missing in action on this important issue whilst consumers continue to be ripped off by the loan sharks” said Mr Dick.
“It’s now been 1,264 days since this government called for a review into the pay day loans sector and they show no signs of standing up for consumers.
“With the government unwilling to act, this inquiry led by Labor Senator Jenny McAllister, is shining a light on just how bad this problem has become because of the government’s ignorance.
“If elected, a Shorten Labor Government would end the pay day lending rip off by legislating the 24 recommendations found in the government’s own report to put in place the proper protections for consumers.
“This includes reducing repayments on small amount credit contracts from 20 per cent of income (currently only applicable to Centrelink recipients) down to 10 per cent of ALL consumers, and introduce a cap on the total amount of payments on leasing household goods.
The Senate Inquiry will also be investigating options to regulate the ‘buy now pay later’ industry to ensure consumers do not fall into a debt spiral.
Afterpay continues to lead this sector gaining 7,500 customers per day and in the six-month period ending December 31 2018 it processed $2.2 billion in underlying sales (debt to customers), compared to $918 million in the prior corresponding half last year.