Rogue lenders ‘targeting the elderly and mentally ill’

Increasingly active rogue lenders are targeting the elderly and mentally ill, while one man was told to lie about his income so he could gain approval for a loan, the Salvation Army says.

In another case this year, two people were offered car loans at 30 per cent interest with the lender targeting those in desperate need of a car, who have no other way of getting finance.

The lender would then take “thousands of dollars in repayments, before repossessing the car and selling it to another desperate person”, Army head of welfare services Major Pam Waugh said.

“In each of these cases, we have laid complaints or are working with the people involved to try and help them out of their situation,” she said.

With debt being a major factor trapping people in poverty and rogue lenders continuing to flourish, welfare groups have joined Commerce and Consumer Affairs Minister Kris Faafoi in calling for tighter lending laws.

Changes to the Credit Contracts and Consumer Finance Act in 2015 had not gone far enough, he said.

Faafoi released a discussion paper this week suggesting the Government could set the maximum interest rate and fee limits lenders were allowed to charge and also hit them with heavier penalties when they behaved irresponsibly.

The Commerce Commission said it was also pursuing rogue lenders and had a number of active investigations.