Consumer Action Law Centre and Financial Rights Legal Centre say changes to Centrepay (Centrelink’s service that allows third parties deduct from payments) announced today by the Federal Government are a step in the right direction, but will achieve very little in protecting vulnerable Australians from the unfair costs and questionable behaviour of consumer leasing and rent-to-buy businesses.
“Access to Centrepay simply dulls the incentive for consumer lease providers to lend responsibly – it gives them priority access to people’s social security income. Today’s announcement captures the small unregulated sections of the market, but it’s business as usual for the providers who cause the majority of the problems” says Gerard Brody, CEO of Consumer Action Law Centre.
“It makes no sense that businesses charging three to five times the retail price of household goods have access to Centrepay. We don’t let high-cost credit products like payday loans deduct from Centrepay. It’s time to end the free ride for consumer lease providers.”
Consumer groups are calling for stronger action from the Abbott Government and that consumer lease providers are no longer given access to Centrepay.