Pay­day loan mar­ket spreads its ten­ta­cles

Townsville Bulletin - - NEWS - KAREN COLLIER

STRUG­GLING fam­i­lies are get­ting hooked on pay­day loans to cover credit card and other ex­penses.

Cou­ples on com­bined in­comes of up to $ 150,000 are bor­row­ing to pay bills be­cause they don’t know how to bud­get.

Aus­tralia’s emer­gency cash mar­ket has bal­looned to $ 1 bil­lion a year and is ex­pected to dou­ble in three years as on­line loan ap­pli­ca­tions grow, Dig­i­tal Fi­nance An­a­lyt­ics es­ti­mates.

Busi­ness was split be­tween the so­cially dis­ad­van­taged and oth­ers on bet­ter in­comes in tem­po­rary cri­sis need­ing ac­cess to fast money, DFA prin­ci­pal Martin North said.

Cash Con­vert­ers and Money3 have been joined by newer play­ers such as Nim­ble.

Pay­day loans are typ­i­cally for $ 100 to $ 2000 and can be ap­proved as quickly as an hour.

They are re­paid over 16 days to 12 months, usu­ally by reg­u­lar di­rect debit.

Charges on a one- month loan are the equiv­a­lent of up to 240 per cent an­nu­alised in­ter- THREE weeks can seem like a life­time to a kindy stu­dent, but kids at Good­start Early Learn­ing Cen­tre at Idalia have waited pa­tiently for their new­est class­mates to ar­rive.

Teacher Yas­min Hunter said the class had been learn­ing about life cy­cles and last week wel­comed four baby chick­ens.

The class brought in an in­cu­ba­tor, sourced eggs and learned about the daily changes oc­cur­ring in­side the egg.

The stu­dents are now the est, plus ex­tra fees for missed re­pay­ments.

Ahead of a fed­eral re­view of reg­u­la­tions, cases re­ported to News Corp Aus­tralia in­clude:

PAY­DAY loan “ad­dicts” get­ting up to 70 loans over three years.

A HOME­LESS dis­abil­ity pen­sioner un­able to keep up with re­pay­ments on a $ 600 loan used for pil­lows, a sleep­ing bag, food and clothes.

A MAN on a carer’s al­lowance jug­gling 10 pawn­broking and pay­day loans at once.

TEXT mes­sages and emails proud care­tak­ers of David, Sea­weed, Omelette and Sweaty Pants and they could not be hap­pier.

The chil­dren have also tended to their own vegie patch and planted seeds.

Ms Hunter said the chil­dren en­joyed be­ing hands- on, and would soon be learn­ing about re­cy­cling and com­post­ing.

“They get to learn about their en­vi­ron­ment, their im­pact on it, and help out at home,” she said. en­tic­ing cus­tomers out more loans.

DODGY as­sess­ments of how much some peo­ple can af­ford to re­pay.

Mel­bourne- based Con­sumer Ac­tion Law Cen­tre chief Gerard Brody is call­ing for re­duced fee caps, bans on un­so­licited mar­ket­ing and stronger lim­its on the per­cent­age of in­come al­lowed for re­pay­ments.

Na­tional Credit Providers As­so­ci­a­tion chair­man Paul Walsh said that, while prob­lems “may still fall through the

to

take cracks”, lend­ing prac­tices had im­proved since stricter rules were in­tro­duced two years ago.

At least 90 days of bank state­ments had to be checked be­fore ap­provals and more than two loans in 90 days was pre­sumed un­suit­able un­less ex­tra in­quiries were made.

Con­sumers were not al­ways upfront about their cir­cum­stances or other debt, he said.

“As other mea­sures such as com­pre­hen­sive credit re­port­ing come on board there will be even more pro­tec­tion for con­sumers,” Mr Walsh said.

Pic­tures: EVAN MOR­GAN

EX­CIT­ING AR­RIVALS: Abi­gaile Ap­ple­ton, 4 ( main pic­ture) and ( above) Joshua Doyle, 4, Darcy Kasper, 3, and Bodhi Cat­tel, 4.

SA­MAN­THA HEALY

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