“The most vulnerable in our community are hurt by payday loans and the industry needs to stop expecting special treatment compared to other forms of credit. Payday lenders are a credit product and should be regulated like larger loans. They should operate under the 48% interest rate cap, the requirement that applies to loans above $5,000.”
Australians are also accessing payday loans through the internet more than ever—with almost 44% of those surveyed in 2015 finding out about payday loans through the internet or social media. Nearly 70% of payday borrowers are accessing loans online—up from 3.1% in 2010. Using industry modelling, the research estimates that by 2018, 8 in 10 payday loans will be online, while the value of all payday loans written is estimated to exceed $1 billion for the first time.
“Making it easier to get a high cost, risky line of credit by avoiding the stigma of walking into a lender’s street store isn’t the answer to financial difficulty,” says Karen Cox, Coordinator of Financial Rights Legal Centre.
“People struggling with their finances need to talk to a financial counsellor—it’s a free and confidential service that can help you get back on track, not deeper in debt.”
The Federal Government announced a review of the payday lending sector regulations in August. Submissions closed yesterday.
October 16, 2015 Consumer Action wrote this joint Media Release
Media Contacts: Jonathan Brown, 0413 299 567, email@example.com
Or Karen Cox, 02 3204 1340, firstname.lastname@example.org
Read the Report here: The Stressed Financial Landscape Data Analysis