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Dick's push to stop payday loan sharks ripping off residents

04/04/2018

Source: The Queensland Times

COMMUNITY groups have joined Federal Member for Oxley Milton Dick in declaring they will not rest until payday loan sharks stopped from ripping off residents.

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More than 50 advocacy groups joined Mr Dick on Friday at his Payday Loans Community Roundtable at the Salvation Army.

A payday loan is a small amount lent at a high interest rate with an agreement it will be repaid in a short time.

About 650,000 financially stressed households hold a payday loan.

Unemployed people made up 40 per cent of people who entered into loan and one quarter received more than 50 per cent of their income from Centrelink.

Mr Dick said it was clear the community had enough of "loan sharks ripping off vulnerable Australians".

He called for the "out of control industry" to be reined in.

"We have heard from local support groups, churches and leading advocacy organisations that everyday Australians are being ripped off every day by loan sharks," he said.

"We know that some people are being charged interest rates of 884 per cent on household goods which is just unacceptable.

"The community voices here have been loud and clear that this rorting of consumers must be stopped."

A personal project for Mr Dick, he and Labor's Shadow Minister for Consumer Affairs Tim Hammond introduced a Private Member's Bill to parliament to reform payday lending and rent-to-buy laws, known as the Small Amount Credit Contract Reforms.

The reforms would; impose a ceiling on the total payments that can be made under a rent-to-buy scheme; require pay day loans to have equal repayments and equal payment intervals; remove the ability for small amount credit providers to charge monthly fees on residual term of a loan where a consumer fully repays the loan early and ban unsolicited sales of the schemes.

The Oxley electorate has one of the highest rates of payday loans in the nation.

Mr Dick said Labor had encouraged the government to bring forward legislation to implement the reforms in the interests of improving protections for vulnerable consumers of payday loans and rent-to-buy schemes.

His Bill is an identical copy of draft legislation released by the Deputy Prime Minister when he was the Minister for Small Business in 2017.

The Bill was approved by Cabinet, but later buried.

"Since the government won't introduce their own legislation, we have done it for them," Mr Dick said.

"It's vital that these reforms are passed as soon as possible to protect vulnerable Australians who are being preyed upon by these loan sharks."

The Bill to reform payday lending will be debated when parliament resumes in Canberra this week.