$1 million saved for high interest rate consumers
Posted by editor (editor) on Dec 22 2009
2009 >>

Low-income Queensland consumers are more than $1 million better off thanks to the work of Legal Aid Queensland’s consumer protection lawyers.

During the past 12 months the consumer protection lawyers have been helping victims of excessive interest rates to escape unaffordable loans and to ensure they receive fair treatment from lenders.

Minister for Fair Trading Peter Lawlor said additional funds had been allocated to Legal Aid Queensland during the past year as part of a range of measures to address unfair, high cost loans.

“The $1 million includes money that has been repaid to consumers and where debt reduction has been arranged because the loan was unjust or breached credit laws,” Mr Lawlor said.

“Problem loans have included asset stripping predatory mortgages, loans that included excessive fees and charges, lending designed to avoid consumer protection laws and unsolicited credit card increases.

“The lawyers have also helped eligible Queenslanders apply for hardship variations to stop their homes from being repossessed.

“Legal Aid Queensland lawyers have assisted consumers by providing legal advice, representing them in court and negotiating with lenders on their behalf, with many cases related to the interest rate cap.

“The 48% rate cap is inclusive of interest, fees and charges and was put in place to help protect vulnerable consumers who have been subject to some extraordinary interest rates of up to 1600% from payday lenders.

Mr Lawlor said the cap provides consumers with protection and enables them to get off the credit merry-go-round.

“I have been told of situations in years gone by where people have borrowed small amounts of money only to be crippled by the debt caused by excessive interest rates.

“The rate cap is giving borrowers some certainty and allowing them a better chance of paying their loans.

“The successful debt reduction and recovery of consumers’ money by Legal Aid Queensland follows earlier success by the Office of Fair Trading in arranging the return of $1 million after obtaining enforceable undertakings from payday lenders who have charged unwarranted interest rates and charges.

“Fair trading inspectors will continue to monitor the industry closely and won’t hesitate to take action against rogue traders who persist in ripping off their customers.

“The laws capping interest rates and other loan charges have now been in force for more than a year, so there is no excuse for further infringements.

“Consumers who feel they have been misled or taken advantage of can contact Legal Aid Queensland for free legal advice on 1300 65 11 88.”

Further information about the interest rate cap can be found at www.fairtrading.qld.gov.au or by calling 13 13 04.

Last changed: Jan 07 2010 at 2:16 PM