In recent times I’ve been approached by victims, families and groups who are suffering due to the growing issue of pay day lenders.
The number of households that are financially distressed has doubled in the past decade to now sit at 1.8 million. This has forced over 650,000 families throughout Australia to turn to pay day lending and consumer leases just to get by.
In return they are paying interest rates as high as 884% for household goods like fridges and washing machines which would normally cost $350, but end up costing consumers almost $4,000 by loan sharks looking to rip off vulnerable Australian families.
Earlier this month we saw the story of local resident Trina in the Courier Mail. Trina says after 5 years of a traumatic debt spiral where she took out hundreds of short term loans and paid tens of thousands of dollars in ridiculous interest rates that she is only now back on her feet. Stories like this are all too common and something must be done.
Almost two years ago the Government received a report and recommendations on how fix this broken system. This includes key recommendations such as placing a total cap on the overall cost for consumer leases and lowering the threshold from 20% to 10% on income expenditure for cash loans.
These are just part of the 24 recommendations made by the committee to put in place protections for those at risk of exploitation.
The Government has already said it supports the vast majority of the recommendations, in part or in full, so it’s time we saw some action to protect vulnerable Australian families.
If you would like to share your story on how you’ve been affected by pay day loans or consumer leases, please send me an email [email protected] or call my office on 3879 6440.