Attorney-General Vickie Chapman has welcomed the Federal Government’s proposed reforms to small amount credit contracts (SACCs) and consumer leases, which will enhance financial inclusion and better protect consumers.
SACCs, also known as payday loans, and consumer leases, require already vulnerable consumers to pay high fees and charges, which can often lead to greater financial hardship.
The Commonwealth’s proposed framework introduces heightened obligations and regulations to prevent predatory lending practices from payday lenders and consumer lease providers.
Attorney-General Vickie Chapman says this reform is vital, particularly given the financial pressure some South Australians may be facing as a result of COVID-19.
“This reform will help ensure vulnerable consumers are afforded a level of protection from the exploitative practices used by lenders and lease providers,” Attorney-General Chapman said.
The key protections in this Bill are:
- Imposing a cap on fees and charges for consumer leases
- Introducing new ‘protected earnings amounts’ for SACCs and consumer leases
- Prohibiting unsolicited advertising for SACCs and door-to-door selling for consumer leases
“The Commonwealth must progress these protections as a matter of urgency. I do not want vulnerable consumers to continue to be exploited or trapped by those acting in an unscrupulous way,” Attorney-General Chapman said.
“Of course should the Commonwealth fail to progress these reforms, the State Government is prepared to revisit the state-based regulatory framework tabled in Parliament earlier this year” she added.
“I will continue to fiercely advocate to better protect South Australians, and their finances.”