Issue Date:  -  Friday, 31 May 2002

Pay day lending under control.

Consumer Protection Commissioner Patrick Walker is confident that the beefed up Consumer Credit Code will better protect consumers who find themselves needing short-term loans.

“Short term lenders (often called pay day lenders) lending amounts of $50 or more must now be licensed or face prosecution”, Mr Walker said.

Loans for less than sixty-three days have until now been exempt from the requirements of the Consumer Credit Code. The changes will bring loans for less than sixty-three days and more than $50 under the Code for the first time and offer consumers protection under the Consumer Credit (Western Australia) Act 1996.

Pay day loans are generally small amounts of money advanced for a fee until the consumers next pay day. People who use these services are often those least able to afford unreasonable charges. So it is great news for consumers that this sector of the credit industry has come under regulation.

From today, the Consumer Credit Code covers short term credit lending and short term lenders must be licensed as credit providers.

“This is a good opportunity for those working within this industry, as it introduces a path towards legitimacy and fair play in an environment where previously some consumers have been disadvantaged by varying fees and inconsistent arrangements”, Mr Walker said. “This move has brought Western Australia into line with the other states and territories to increase accountability of lenders and assist consumers get a fair deal”.

The Department of Consumer and Employment Protection can assist consumers having problems with credit that is causing them temporary financial hardship. Contact the department on 1300 30 40 54 for details.