RLC’s submission calls for better consumer protections in the regulations governing pay day lending and consumer lease services.
In particular, we want to see consumer leases subject to the same restrictions as pay day loans.
We propose regulations which would require consumer leases operators to provide clear and simple information up front to consumers, about the total costs and effective interest rates of these ‘rent to buy’ products.
Currently, there are no effective interest rate caps on consumer lease services. A recent ASIC report found one consumer lease provider charging an effective interest rate of 884%
For pay day loans, we also want to see a single interest rate cap, which incorporates all interest, fees or miscellaneous charges under a pay day loan or consumer lease. This would reduce the current misinformation and avoidance practices of many pay day lending providers.