New laws designed to protect vulnerable families from lenders come into effect in a fortnight …
The changes come into effect on June 6, with money lenders then having to prove clients can pay the loan back without suffering substantial hardship.
They will also be required to be clear about all charges and explain the fine print.
The government has recognised this area needs cleaning up. New laws have been enacted and are about to come into force. This then leads Darryl Evans, the Chief Executive of Budgeting & Family Support Services Mangere, to come out and say they won’t work.
Well duh. Speed limits doesn’t stop speeding either. But it does not allow for enforcement.
Margaret Perry hastily signed up to a loan with a 50 percent interest rate and extra charges, because no bank will lend to her and she was desperate for cash to pay for food and rent.
ONE News has heard of liquor and KFC vouchers being given as enticements for signing on to a loan.
“I’ve been offered an mp4 player for free if I take out a $500 loan,” Ms Perry said.
Ms Perry estimates she gets five mobile money lenders per week knocking at her door.
Here’s a rule of thumb: nobody that approaches you unsolicited to discuss taking out a loan is going to be a good person to deal with. And I get the fact that there are those in society that need protecting from predatory sales people.
While Ms Perry’s choices are unlikely to change, it’s hoped the new laws will force loan sharks to be more responsible when signing up vulnerable clients.
John Lyall of the Commerce Commission says there is now a commitment to stamping out unscrupulous lenders.
“In fact we have several before the courts right now. We are not frightened to take action if we do find breaches of the law,” he says.
Sometimes I wish I could be a benevolent dictator and enact some common sense and fun laws. For example, if you are found by a court to have been the provider of a predatory loan, then you will have to pay the all the repayments back, as well as the amount of the original loan. And we’ll work on the strike system. Three strikes leads to a mandatory 12 months non-parole prison sentence and a life-ban from working in the “finance industry”.
As for Darryl Evans, he’s a tool. Before the law has even had a chance to work, he’s already running to the media moaning that it “probably” won’t work. Well Darryl, I’m sure you’ll be able to find people that will continue to act like scumbags. The exception doesn’t meant the law “probably” won’t work. It will have the effect of bringing the ones that push the boundaries into line.
But yeah, the real scumbags will never be controlled by a law change, so aren’t you clever.
– One News