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Monday, 2 May 2016
Page: 4079

NOTICES

The following notice was given:

Ms Parke: To move—That this House:

(1) notes that:

(a) there is considerable evidence that payday lending and consumer leases are not properly regulated and that both financial practices are causing serious harm to low income Australians;

(b) irresponsible and immoral lending is endemic in the payday lending industry, which is growing rapidly and developing new online opportunities to encourage people to borrow with insufficient consideration of their capacity to bear the exorbitant and poorly regulated interest costs that payday lending involves;

(c) the Australian Securities and Investment Commission review of payday lending found that 24 per cent of loans were taken out by Centrelink customers and 54 per cent were taken out by customers who had two or more payday loans in the previous 90 days, a clear indication that they are caught in a cycle of repeat borrowing;

(d) consumer leases can involve an effective annualised interest rate of 240 per cent, and generally mean that vulnerable consumers pay three or four times the value of basic household items like refrigerators or washing machines; and

(e) consumer leases operate with lower consumer protection standards under the National Credit Code, though such agreements are not materially different in effect from credit contracts;

(f) in 2013-14 nearly half of Radio Rental's $197 million revenue was received through the Centrepay system which allows payments to be directly debited from a consumer's Centrelink account; and

(g) Senator the Hon. Doug Cameron has brought a private Senator's bill that seeks to remove consumer leases from access to the Centrepay system; and

(2) calls on the Government to:

(a) ensure that the recently announced review into the 2013 reforms to payday lending focuses on securing the wellbeing and protection of low income Australians irrespective of the effect this has on the profits of companies that practise this kind of often predatory lending;

(b) act quickly to stop consumer leases being used to prey on vulnerable and low income Australian households by ensuring that consumer leases are subject to the same standards and controls as credit contracts and introducing stricter controls on the currently outrageous and indefensible costs involved in such arrangements, including the requirement to prominently disclose the total cost of all contracts; and

(c) support Senator Cameron's initiative to remove access to Centrepay for consumer lease companies and amend section 123TC of the Social Security (Administration) Act 1999 to include a definition of consumer leases for this purpose.