Senator MACKAY (1:24 PM) —I rise to speak today about a company operating in my home state of Tasmania, Victoria and, I am advised, some other states that is providing—and I use the term advisedly—home loans on what is known as an `instalment purchase contract' to low-income earners. This company is preying on those who can least afford it by charging outrageous and exorbitant costs for the privilege of lending money to people who are considered to be in a high-risk category due to the fact that they are unemployed or a sole parent. The company concerned benignly refers to these as being like a lay-by transaction, except you get to live in the premises while you pay it off. That is the way it is characterised. This particular company, called Never Pay Rent Again, buys up low-cost houses, doubles the price and then adds a premium of at least another $20,000 onto that price simply because, the company says, it takes all the risk by lending money to high-risk people. The interest rate charged to customers is not disclosed in the contract and is set between two per cent and five per cent above what financial institutions currently offer. An extra two per cent is charged to those who make regular payments and five per cent to those whom the company considers are higher risk.

The properties being sold by this company are on what are called vendor terms. This means that the vendor dictates the terms of the contract of the sale of the property. The company retains the certificate of title in its name until the final payment is made. The only form of protection that the purchaser has is by their solicitor placing a caveat on the premises to protect their equitable interest in the property. For example, I have been told of a case where a woman wished to purchase the housing commission property formerly owned by her parents. The parents had sold the property to the company Never Pay Rent Again for $35,000. This company negotiated to sell the same property to the daughter for approximately $70,000. Another $20,000 was added to this price for what the company terms `company risk', making the final purchase price $90,000 on a property originally sold for $35,000. Depending on how much of a credit risk the company assessed her as, she would have been up for an extra two per cent above the current interest rate for repayments. Thankfully, in this case, after seeking legal advice this woman decided not to proceed with the purchase. However, many other people have not been so prudent or able to get additional legal and financial advice.

The unscrupulous directors of this company are buying up low-cost, ex-housing commission properties in Tasmania, then adding a minimum of $20,000 onto the purchase price to cover their risk of lending money to what they regard as a high-risk group of people, not disclosing the true and full cost of the loan offered in the instalment contract, and not disclosing the interest rate for the loan but saying that it `will be reviewed from time to time'—to quote directly from the contract—although no actual figure is stated in the terms of the contract. They are targeting people who qualify for assistance from the Streets Ahead program, which operates in Tasmania, but who are unaware of their eligibility for the program. I have been told that this company is sending out the contracts for sale and then a week or so later the company director flies in and signs these people up at the local community hall, where they are put under pressure to sign up so the contracts can be collected.

The target group of people for this unscrupulous company often have little education or they have literacy difficulties. They are therefore reluctant or do not have the resources to approach lawyers or financial advisers to obtain advice regarding the contract for the sale of the property. This company is specifically targeting single mothers aged in their early 20s and early 30s, as well as unemployed people and people who are bankrupt. I find it particularly reprehensible that this company is blatantly targeting and then taking advantage of these people who can barely afford housing in the first place and who will end up paying many, many times more than the original purchase price. The risk that these people may lose everything is extremely high as any breach of the contract, regardless of how minor it is, will—according to the contract—give the company the right to rescind the contract and the purchaser will lose all moneys they have paid into it. If the property burns down, the insurance money goes to the company, which then retains the discretion to give any of the money to the purchaser.

The company are telling purchasers that, if the property is sold, they will keep the house—they will just be making repayments to someone else who has purchased the company's interest in the property. If the purchaser wants to make any cosmetic changes to the premises, they have to have permission from the company—even to paint the walls. If they do not obtain permission from the company, then as far as the company is concerned they have breached the contract and are liable to lose everything they have paid so far. In my opinion, this document reads more like a 25-year lease agreement than a housing loan. This is despicable and blatant preying on those who can least afford it by this company called Never Pay Rent Again. I remind honourable senators that they are not just operating in Tasmania. We know they are operating in Victoria and they may well be operating in other states.

These are the unscrupulous dealings of two people in particular: George Mihos and Mannix Rousseau, who are responsible for exploiting Tasmanian people who are unable to get housing loans. Immediate measures should be implemented to stop the outrageous exploitation of young mothers who are desperate to provide a home for their children that is their own home. In my home state of Tasmania, the Attorney-General's office is currently investigating whether the contract is in fact legal and binding. I exhort other senators to take this up with their state governments as well.

I believe that this contract will be found to be in breach of the Consumer Credit (Tasmania) Act and therefore will be declared illegal. That is my belief, and certainly my aspiration and hope. The Tasmanian Department of Justice and Industrial Relations and the ACCC are also inquiring into the legalities of this company, and I pay particular tribute to those two organisations for the work that they are doing. I believe the Tasmanian Department of Health and Human Services is now looking at reviewing their criteria for sale of low-cost ex-housing commission properties. My hope is that people who have paid out money to this nefarious company will not be left financially disadvantaged, with only debts as a result of their exploitation—and there is no other way to put it.

I congratulate those Tasmanians who have had the intestinal fortitude to come forward and make complaints about this company. I congratulate them for doing that. On the grounds of coercion and harassment, this is what they are alleging. I know that for people unfamiliar with the legal and regulatory system this can be a difficult thing to do. I understand that, and I think all senators understand that. I bring this matter to the Senate's attention in order to—and I am not making any bones about it—expose the unscrupulous dealings of this company called Never Pay Rent Again and the actions of George Mihos and Mannix Rousseau, who in my view are exploiting vulnerable people in Tasmania. I seek leave to table a copy of the contract from Never Pay Rent Again, with all the commercial details identifying anybody having been blacked out. I point out to the Senate that this has been signed by the same George Mihos.

Leave granted.

Senator MACKAY —I thank the Senate for its leave. As I said, the Tasmanian state government is acting on this matter. I urge senators from other states to check whether this company is operating in their state as well. My information is that it certainly is in Victoria, and it may well be in other states. This is an absolute disgrace. This brings everybody who is operating in this sector of the industry into disrepute. This is a disgrace. I cannot tell you how angry I am about it on behalf of those people who have come forward. This issue has had some coverage in Tasmania. I am seeking the opportunity today under privilege—I make no bones about that—to lay out the entire story for the people of Australia and for the people of Tasmania. I thank the Senate for its attention.