Consumer Action’s submission to the Senate Economics Legislation Committee calls on Parliament to pass the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019 (No. 2) as a matter of urgency. For years now we have watched progress on implementing the SACC Bill stall as industry lobbyists fight to derail these crucial reforms. In this time, we have witnessed ongoing harm caused by this industry.
In the years since the independent Review of Small Amount Credit Contracts made its recommendations—recommendations which this Bill would implement—these companies’ profits have continued to grow off the back of Australians drowning in debt. Independent research commissioned by Stop the Debt Trap Alliance shows over 4.7 million individual payday loans were taken on by around 1.77 million households between April 2016 and July 2019. This research shows women, including single mothers, are increasingly accessing payday loans. The harm being caused in Aboriginal communities by consumer lease providers and payday lenders is also cause for alarm.
The impact of unaffordable debt is significant. Evidence of poorer health and wellbeing outcomes resulting from debt suggest that people in debt experience negative impacts on their relationships with family and friends, increasing isolation and exacerbate mental health issues.
For too long we’ve watched consumer lease companies and payday lenders exploit those who can least afford it and the online provision of loans is making it easier than ever to get trapped in debt. This inquiry provides another opportunity to highlight the continuing real-world harm caused by payday lending and consumer lease companies.
It’s time for Parliament to step up and pass the Small Amount Credit Contract and Consumer Lease Reforms and finally put an end to the rip-offs.