Payday Loans Victimize Millions of Australians | Illawarra Mercury



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Millions of vulnerable Australians fall victim to payday lenders, with more than 135,000 short-term, high-interest loans taken out each month. New data compiled by the Stop The Debt Trap alliance, made up of 20 consumer advocacy groups, shows that over the past three and a half years, 4.7 million payday loans have been taken out, for a total of ‘approximately $ 3.1 billion. The number of loans taken out per month rose from around 100,000 in 2016 to 135,000 between January and July of this year. Victoria recorded 275,624 new payday loans between January and July of this year, the most of any state or territory, followed by NSW with 254,242 new loans. The fastest growth was recorded in Tasmania and Western Australia, with increases of 15.5% and 13.5% respectively. The number of women using payday loans also increased from 177,000 in 2016 to 287,000 in 2019. “Forty-one percent of these women are single mothers,” Gerard Brody of the Consumer Action Law Center said Tuesday. “Women who do it hard get hurt by payday lenders.” Payday loans, or small credit contracts, are short-term, high-interest loans for amounts up to $ 2,000. Lenders can charge annual interest rates between 112 and 407 percent and are known to target those in financial difficulty, often trapping them in a cycle of debt. It is estimated that around 15% of borrowers will fall into a debt spiral, which can have serious consequences, including bankruptcy. Stop The Debt Trap wants the federal government to urgently introduce stricter regulations for payday lenders. “As Prime Minister Scott Morrison and Treasurer Josh Frydenberg act fiercely on big banks and financial institutions in the wake of the Royal Commission on Financial Services, why are they letting payday lenders escape reform? legislative? ” Mr. Brody said. A Labor effort to limit payday lenders was stalled when the party failed to win the federal election. Associated Australian Press

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