Appalling’: Australians pushed to the brink by payday loan sharks as crackdown looms
New Daily
Oct 14 2022

Australians are facing financial ruin, even homelessness, after being granted unaffordable credit at the “click of a finger” by payday lenders, a Senate committee has heard.   

Financial counsellor Lyndall Millburn told senators on Friday that one of her clients – who was scheduled to appear before the public hearing but pulled out – was pushed into a financial crisis by payday lenders.

Ms Millburn detailed how the Wiradjuri woman and mother-of-two was handed seven short-term loans for her children to visit doctors, one of whom has special needs, and to pay for repairing the family’s car.

The sixth loan, for $250, came with a total cost of $463, and was approved by lenders just four days after the family had borrowed $500.

At one point, the mother had just $150 a fortnight to live on after paying the loans, the high interest bills, and rent. Lenders, meanwhile, were threatening to raid the family’s bank account for missed payments.

“She was facing eviction from public housing and she often struggles to put food on the table,” Ms Milburn said.

Another Australian mentioned at the hearings who leased a laptop from a lender ended up being charged $15,000 for a computer worth $3000, Consumer Action Law Centre policy director Tania Clarke told senators.

“Due to the excessively high fees and irresponsible lending practices that we witness, these products commonly breed financial exclusion and almost always leave people we assist worse off,” Ms Clarke said.

“Payday loans can attract fees equating to an annual interest rate of over 200 per cent, and there’s currently no limit on what can be charged under a consumer lease.”   

Government crackdown looms
Advocates were asked to share consumer stories with the Senate on Friday as the Albanese government prepares to press ahead with a crackdown on payday lenders and companies that lease out their goods.

Reforms before parliament would cap short-term loan repayments at 10 per cent of household income and set limits on what lessors can charge.

The previous cap was 20 per cent, and it only applied to those receiving social security assistance.

Ms Millburn said the key issue the federal government must address is that it’s “too easy” for people to obtain high-interest credit, with lenders granting financially vulnerable people loans at the “click of a finger”.

However, she said loans should still be accessible because many people need access to funds in emergencies, but they must be made affordable.

“Even though [repayments] can’t be taken out of Centrelink, they are direct debited out of people’s accounts as soon as their pay hits it,” Ms Milburn said.

“[Lenders] get their money first and they [customers] get whatever’s left over.”

The financial counsellor also lamented how lenders market products to financially vulnerable people, saying lenders jump at the opportunity to bring in new customers, even if they’ve been rejected by other lenders.

“Somebody applied for a loan with one payday lender, was knocked back because it was unaffordable, but within 24 hours had other offers,” Ms Milburn said.

“If it’s unaffordable for one, how can it be affordable for another? That’s just appalling, these people are very financially vulnerable.”

These loan sharks should be savagely regulated..... or abolished.  I'll bet a full review of who actually owns these vulture organisations would be interesting.... bet there are plenty of worms to turn over there...

As for Leys - well - she is, for some reason, a Scomo favourite - god knows why but she must have something on them -  and was forced on NSW Libs who didn't want her on their Senate ticket...

She must have something on them because for the people she is on the nose....

I could never understand how it is that the most disgusting, selfish, and outright usurious of the public purse people with no real talent can be cemented into the Lib party.... there must be some amazing video files hidden somewhere....