Plan for protection from circling payday loan sharks
FAMILIES caught in the grip of payday loan sharks will find reprieve, with Labor promising, if elected, tougher laws to protect consumers.
Horror stories about people being left thousands of dollars in debt were recalled at today's Senate Inquiry into payday loans in Brisbane.
The Salvation Army and Legal Aid shared stories of how the "out of control" payday loan industry targets vulnerable Australians with promises of easy money, but leaves them in a debt spiral.
Oxley MP Milton Dick said the issue has been ignored by the government which, despite repeated promises, failed to protect consumers.
"The Abbott-Turnbull-Morrison Government has spent almost three years missing in action on this important issue whilst consumers continue to be ripped off by the loan sharks," Mr Dick said.
"It's now been 1264 days since this government called for a review into the payday 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."
Mr Dick said a Shorten Labor government would end the payday lending rip-off by legislating 24 recommendations in the government's own report to protect 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," he said.
The Senate Inquiry is also investigating options to regulate the "buy now pay later" industry to ensure consumers do not fall into a debt spiral. Afterpay leads the sector, gaining 7500 customers each day.
In the six months to December 31, Afterpay processed $2.2billion in underlying sales, compared with $918million in the prior corresponding half last year.