Credit protection bill puts consumers at risk
Financial hardship information will be exposed on consumers’ credit reports for the first time after the passing of a bill on credit reporting.
The National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019 was passed yesterday and would establish a mandatory comprehensive credit reporting regime and provide that a credit provider could not refuse to provide further credit or reduce a customer’s credit limit because financial hardship information existed.
However, Financial Rights Legal Centre chief executive, Karen Cox, was concerned the visibility of their hardship information would deter people from seeking assistance. Information would be retained for 12 months regardless of the time spent in hardship, a particularly important fact when thousands were forced to take hardship deferrals during the recent COVID-19 pandemic which could later affect their credit rating.
The decision was defended by the Government as being a way to encourage responsible lending.
“Financial Rights is very concerned that people will shy away from seeking assistance from their lenders, when people become aware of these changes,” Cox said.
“Financial Rights has spoken with countless people who would rather continue to struggle with unsustainable payments or look for dangerous quick-fix solutions such as payday loans or expensive refinancing, rather than risk having what they perceive as negative information listed on their credit reports.
“In the absence of safe lending laws, there is a danger that this information may be used by unscrupulous lenders to target people in financial stress for more expensive, risker products.
This puts individuals and families at risk during a period of unprecedented financial hardship.”
AUTHOR
Laura Dew
Recommended for you
Private wealth firm Fitzpatricks Group has appointed a newly created head of product, who previously spent 20 years at CFS, to bolster its range of investment options.
The Financial Services and Credit Panel has made a written direction after advice regarding non-concessional contributions meant an individual was forced to withdraw over $330,000 from their super.
Merchant Wealth’s David Haintz has described how the firm differs from the traditional private equity ventures jumping into Australia, and why M&A isn’t like Married at First Sight.
ASIC has been granted permission to shut down almost 100 websites running investment scams, with the Federal Court describing how its victims were “fattened like pigs to slaughter”.
