The Stop the Debt Trap Alliance, a coalition of dozens of consume advocacy organisations from around Australia, including financial experts, community advocates and service providers has strongly endorsed a recommendation from the Senate Economics Legislation Committee that the Finance Sector Reform Bill 2022 (FSR Bill) be passed and called on it to happen as a matter of urgency.
“The dreadful financial harms we see every day impacting Australian families, ripped off by a consumer lease or dodgy payday loan have gone on for too long,” said Gerard Brody, CEO Consumer Action.
The Alliance strongly endorses the Committee’s finding that these reforms “will promote financial inclusion through the introduction of a new protected earnings amount and a cap on costs for consumer leases,” and that they will “reduce the risk that consumers are left unable to pay for their basic needs or will default on their other commitments”
“We strongly support the Committee’s recommendation that the Bill be passed, and we urge all Senators to heed this recommendation and call for the Government to arrange for the Bill to be voted on at the next possible sitting.”
Mr Brody said that industry lobbying and politics has sat in the way of measured reforms recommended by experts and supported by all sides of politics for 6 years. In this time the harms caused by these products have multiplied.
QUOTES from Stop the Debt Trap Alliance members:
Fiona Guthrie, Financial Counselling Australia CEO said:
“it was heartening to see the committee’s measured and appropriate response to the many stories of financial harm fuelled by these products – stories that financial counsellors hear and have to deal with every day.
“Significant reform of these products has been badly needed for many years,” Ms Guthrie said. “However, in the wake of the COVID pandemic, in a world of rapidly increasing inflation and cost of living pressures, these reforms have assumed an even greater urgency. We hope they will put an end to the often-predatory behaviour of many lenders and stop a cycle of debt that never should have been allowed to take root.”
Karen Cox, CEO Financial Rights Legal Centre said:
“These important reforms will rein in the excesses of a sector that has systematically exploited the most financially vulnerable people in Australia for years. No-one should need one pay day loan to pay off another, or to pay thousands of dollars for a phone or washing machine under a consumer lease. Enough is enough – pass these laws now.
Roberta Grealish, Principal Solicitor, Consumer Credit Legal Service WA said:
“CCLSWA has made numerous submissions to numerous enquiries over many years highlighting client experiences where existing laws have failed to protect them from the harms of payday loans and consumer leases. Accepting that these products are a necessary evil for those who are unable to obtain credit on more favourable terms, we encourage Government to pass this Bill without further delay to ensure vital consumer protections are in place for the vulnerable who need them most”.
Consumer Action, Mark Pearce 0413 299 567
Financial Counselling Australia, Mike Bruce 0403 920 189
Financial Rights Legal Centre, Drew MacRae 0404 604 978
Roberta Grealish, CCLSWA 08 6336 7020