Financial counsellors, community legal centres and support organisations reiterated to Labor the urgency of reforms to laws regulating payday lending and rent-to-buy schemes, at a roundtable in Palmerston last Thursday.


The consultation, convened by Member for Solomon Luke Gosling and attended by Shadow Minister for Consumer Affairs, Tim Hammond MP, included representatives who worked directly with vulnerable consumers of Small Amount Credit Contracts (SACCs) and consumer leases to assist them in regaining control of their finances.


Roundtable participants shared anonymised accounts of some of their clients’ experiences of being ripped off by payday lenders and rent-to-buy operators, including:


  • A pay-day loan client who borrowed $150 and within six weeks the pay-day lender demanded that she repay over $1000;


  • A Centrelink recipient who had four rent-to-buy payments deducted from her payment each fortnight, leaving her with only $50 to feed the family. On top of that she had a pay-day lender attempting to withdraw a further $66 repayment each fortnight by direct debit;


  • Unfair fees and charges such as a $50 dishonour letter fee on top of the $49 dishonour fee.


In November 2016 the Turnbull Government committed to a suite of reforms in response to the SACC Review, promising to introduce legislation in 2017.


The Government released a consultation draft of the bill in October 2017, but to date they have not introduced the bill, despite it being approved by Cabinet and having bipartisan support.


“Vulnerable consumers have waited long enough for the Government to act to implement the reforms to SACC laws,” said Mr Gosling.


“That’s why today, I will be backing Tim Hammond when he introduces the Government’s own consultation bill as a Private Member’s Bill.”


The Government must bring this bill on for a vote, and they must support it, given it is their own bill.



Summary of the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2018:

Amends the National Consumer Credit Protection Act 2009 to:

  • impose a cap on the total payments that can be made under a consumer lease. Currently, there is no cap on the total amounts of payments that can be made under a consumer lease;


  • require small amount credit contracts (SACCs) to have equal repayments and equal payment intervals;


  • remove the ability for SACC providers to charge monthly fees in respect of the residual term of a loan where a consumer fully repays the loan early;


  • preventing lessors and credit assistance providers from undertaking door-to-door selling of leases at residential homes;


  • introduce broad anti-avoidance protections to prevent SACC loan and consumer lease providers from circumventing the rules and protections contained in the Credit Act and the Code; and


  • strengthen penalties to increase incentives for SACC providers and lessors to comply with the law.


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