Payday lending: ‘Examples of exploitation are endless’
DESPERATE single mothers and families have used smartphones to secure hundreds of millions of dollars in high-interest loans under a nightmare scenario that will put pressure on PM Scott Morrison.
In almost 2½ years since the Coalition Government released a damning report into rent-to-buy and payday lending, 1.6 million households, many in financial stress, borrowed about $1.85 billion.
The Turnbull Government pledged to fix the issue and released draft laws that have remained idle in Parliament.
Data from Digital Finance Analytics reveals 15 per cent of borrowers will likely get into a debt spiral and some will declare bankruptcy. Some short-term lenders are charging up to 800 per cent interest.
Oxley MP Milton Dick said the data showed almost 150,000 new households had turned to quick loans for white goods or cash since April 2016.
"While the Abbott/Turnbull/Morrison Government sits by and does nothing, these Australian families continue to be ripped off every day by the loan sharks in this out-of-control industry," Mr Dick said.
"Examples of people being exploited are endless … like the Queensland mum who was approached by a payday lender and signed up to rent a fridge.
"After her electronic signature was captured, she was only told how much she would pay a fortnight - $81.44. Just two weeks later, the full story was revealed with the fridge costing … $6352.20 over three years."
The data reveals 83 per cent of loans are accessed on a website with a phone or computer and there was a continued increase in the number of women using payday loans. Of those, 40 per cent are single mums.
Mr Dick said it had been 1150 days since the Government announced a review and Malcolm Turnbull pledged in August to introduce legislation by the end of the year.
Assistant Treasurer Stuart Robert pledged to bring on the laws in the coming months.
Mr Robert said Human Services Minister Michael Keenan was also ensuring vulnerable customers were not being ripped off by lenders.