The reckless behaviour of pay day lenders has gone on long enough.
Examples of people being exploited are endless. This includes heartbreaking stories like the Queensland mum who was approached by a pay day lender and signed up to rent a fridge on the spot.
After her electronic signature was captured, she was only told how much she would pay a fortnight - $81.44. Just two weeks later the full story was revealed with the fridge costing $6,352.20 over three years.
And a young person just out of high school on a Newstart allowance who was told verbally that she was buying a $1,500 furniture set on a 1 year contract, but in reality was signed up to rent over a 2 year period repaying $5,668.
Families, young people and pensioners are being ripped off by loan sharks who are exploiting an industry which preys upon vulnerable people.
I’ve heard dozens of these stories where people are being sucked in to outrageous pay day loans and leases for household goods with astronomical interest rates.
Stories like this are simply not acceptable. But there is something we can do about it.
For almost 2 years the Turnbull Government has known about pay day lenders rorting the system since receiving a comprehensive report on the industry.
The report included 2 key recommendations to clamp down on pay day lenders. Lowering the amount of income consumers can spend on repayments for pay day loans from 20% down to 10% on and introducing a cap on total repayments for leases.
Both of these reforms are a common sense way to reign in an industry that is out of control.
With the cost of living rising, the number of financially distressed households has doubled over the past decade to now sit at 1.8 million. As a result over 650,000 families are turning to pay day loans just to get by.
Flat lining wages, insecure work and rising inequality means this disturbing trend will only pick up pace if we don’t clamp down on pay day lenders.
We know the Turnbull Government has already stated their full support for these recommendations and drafted a bill to protect vulnerable Australians, yet they continue to sit on their own hands.
This week the Minister responsible Kelly O’Dwyer looks like being rolled by the extreme right wing rump of her Party and seems more worried about her saving her own job than saving innocent victims.
The question now is will the Turnbull Government support their own bill in the Parliament. There is no excuse to wait any longer.
It’s time Malcolm Turnbull drew a line in the sand and stood up for vulnerable families who are being ripped off. Anything less is selling out consumers who deserve better.