3 years ago
GOVERNMENT MUST STOP PREDATORY LENDERS
BILL SHORTEN MP
Today Labor introduced legislation to make it harder for unscrupulous consumer lease providers to target low income Australians.
Hundreds of thousands of Australians use Centrepay – a government tool that allows automatic deductions to be made from pension and welfare payments to manage bills, rent and ongoing expenses.
Centrepay’s terms and conditions are supposed to prevent its users from being exploited by banning products that “have significant potential for high cost but low value goods or services” or “expose customers to unacceptable risks of financial stress or exploitation.”
The Government has refused to enforce these parts of the terms and conditions against the businesses that use Centrepay.
Centrelink clients are subjected to exorbitant interest charges – in some cases of over 800 per cent – and the Australian Securities and Investments Commission (ASIC) has found the cost of household goods leased from rent-to-buy businesses can cost nearly nine times the retail price of the same goods.
Not all consumer lease providers are bad, but the government’s failure to enforce their own policy means that dodgy consumer lease providers have a free pass to use Centrepay to target pensioners and welfare recipients with unfair contracts and poor value services.
Senator McAllister’s private bill will put a stop to this by removing consumer lease providers’ access to vulnerable Australians through Centrepay.
This will not limit consumer choice. Individuals who want a lease can still seek one independently. But removing access to Centrepay for consumer lease providers will make it harder for the unscrupulous providers to target pensioners, people with a disability and their careers, or Australians who are out of work.
Hundreds of thousands of Australians use Centrepay – a government tool that allows automatic deductions to be made from pension and welfare payments to manage bills, rent and ongoing expenses.
Centrepay’s terms and conditions are supposed to prevent its users from being exploited by banning products that “have significant potential for high cost but low value goods or services” or “expose customers to unacceptable risks of financial stress or exploitation.”
The Government has refused to enforce these parts of the terms and conditions against the businesses that use Centrepay.
Centrelink clients are subjected to exorbitant interest charges – in some cases of over 800 per cent – and the Australian Securities and Investments Commission (ASIC) has found the cost of household goods leased from rent-to-buy businesses can cost nearly nine times the retail price of the same goods.
Not all consumer lease providers are bad, but the government’s failure to enforce their own policy means that dodgy consumer lease providers have a free pass to use Centrepay to target pensioners and welfare recipients with unfair contracts and poor value services.
Senator McAllister’s private bill will put a stop to this by removing consumer lease providers’ access to vulnerable Australians through Centrepay.
This will not limit consumer choice. Individuals who want a lease can still seek one independently. But removing access to Centrepay for consumer lease providers will make it harder for the unscrupulous providers to target pensioners, people with a disability and their careers, or Australians who are out of work.