Fair trading inspectors recover $978K for payday lender customers
Posted by editor (editor) on Jun 16 2009
2009 >>

Payday lenders from Beenleigh to Cairns have agreed to pay back $978,861 to more than 1,680 cash-strapped customers following an industry blitz by the Office of Fair Trading enforcing Queensland’s tough new laws targeting excessive interest rates and charges.

Minister for Fair Trading Peter Lawlor said inspectors had conducted spot checks on 178 credit providers since 1 July 2008, in a state government crackdown on suspect practices.

“They have now negotiated the recovery of some $978,000 in excess interest and fees at an average of over $580 per customer, with further reimbursements likely,” Mr Lawlor said.

“The lenders concerned have also agreed to pay $55,000 to the Consumer Credit Fund, which is used to support the enforcement and promotion of state credit laws.

“Inspectors have issued 14 warnings and executed 57 conduct deeds with 63 companies in relation to various alleged breaches from incorrect charging to contractual disclosure issues.”

Conduct deeds are legally enforceable undertakings in which traders agree to make changes to the way they operate and rectify the consequences of past practices. They often provide a more timely and beneficial outcome for consumers than pursuing prosecutions in the courts.

Mr Lawlor said the state government was determined to protect disadvantaged Queenslanders facing even greater challenges as a result of the global financial crisis.

“Fair trading inspectors will continue to monitor the industry closely and won’t hesitate to prosecute rogue traders who persist in ripping off their customers,” he said.

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

Mr Lawlor said the fair trading blitz had identified numerous breaches, including excessive interest rates, failure to disclose brokerage fees, failure to disclose to whom commissions were payable, failure to state total repayments, failure to adequately inform consumers of their legal rights and failure to make required disclosures in statements of account.

“A number of cases are still under investigation and could lead to prosecution, so it would be inappropriate to comment further on those matters,” he said.

Last changed: Oct 06 2009 at 3:08 PM