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  • A ‘payday loan’ or small amount credit contract is a credit contract for an unsecured loan of $2000 or less for a term of at least 16 days but not longer than one year. It excludes loans by authorised deposit taking institutions and continuing credit contracts.
  • The case of ASIC v The Cash Store and ASIC Report 426 suggest the regulatory tools to tackle poor lending practices in the industry are, to a large extent, already available. Effective enforcement, however, remains a major challenge, and society’s most vulnerable continue to fall foul of unethical lending practices.

The recent 4 Corners report ‘Game of Loans’ on the ABC, which showed payday loans being given to homeless heroin addicts, shocked many. It may have seemed hard to believe but it is something the Financial Rights Legal Centre (FRLC) sees regularly.

The FRLC (formerly the Consumer Credit Legal Centre) is a community legal centre in NSW that specialises in consumer credit and insurance. Its telephone advice line appears on utility bills, default notices under the National Consumer Credit Protection Act 2009 (‘NCCP Act’) and, since 1 July 2013, it has appeared on a mandatory warning for consumers applying for Small Amount Credit Contracts (reg 28XXA National Consumer Credit Protection Regulations 2010 (‘NCCP’)).

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