Labor has moved to establish a Senate Inquiry to examine financial services that were excluded from the terms of reference of the Financial Services Royal Commission.
Labor Senator Jenny McAllister will move a motion in the Senate today calling for the Senate to inquire into services that are often targeted at low and middle income, financially stressed Australians.
The inquiry will examine whether the current regulation of debt vultures, payday lenders and “buy now, pay later” providers is adequate to protect vulnerable members of the community from financial harm.
Labor wants to ensure that Australians in financial hardship aren’t pushed further into a spiral of debt by expensive payday loans and for-profit debt management services.
Financial counsellors are telling us that their clients are caught in a spiral of debt because of predatory debt management firms and other for-profit debt vultures such as “credit repair” businesses.
Australians are getting ripped off by people who claim they are trying to help them. The most vulnerable are getting hurt the worst, and today, the law isn’t there to protect them. Labor wants to change that.
The inquiry will also examine the current capacity and capability of free financial counsellors to meet demand in the community for assistance managing financial stress.
Labor strongly supports the important work of financial counsellors in assisting financially stressed households to manage their debts and avoid further financial hardship.
This inquiry will consider whether the financial counselling sector has the capacity to service the demand in the community, and what options exist to build the capacity and capability of the sector.
Australians should be able to have confidence that financial service providers are acting fairly and honestly. This inquiry will help to restore community confidence in key financial services that have not been examined by the Royal Commission.
WEDNESDAY, 17 OCTOBER 2018