Free phone service for loan shark victims

The government has launched a free phone service to enable victims of loan sharks to understand their rights and the existing laws and practices.

Consumer Affairs Minister Chris Tremain said the facility would empower and protect consumers from being preyed on by unscrupulous loan companies.

Those under duress from heartless moneylenders can call 0800-Loan Stress that reportedly enables consumers to understand their rights and resolve disputes with finance companies.

Mr Tremain said an increasing number were being treated unfairly by their loan providers.

“We hear stories of people losing their jobs and finance companies still expecting them to repay their loans at the same rate. In other cases, finance companies are repossessing vital household items, despite consumers only taking on loans of $1000 or less,” he said.

Mr Tremain said such behaviour on the part of finance companies and moneylenders was not acceptable. He said the new facility would help people to complain and seek protection from the relevant authorities.

“Since December 2010, all loan providers should belong to an independent dispute resolution scheme, which is free for their customers. The new free phone service would make it easier for consumers to get access to these schemes and gain the confidence they need to protect themselves,” he said.

He said the government was considering a number of measures to protect borrowers from unscrupulous lenders.

According to him, the consumer affairs ministry announced an overhaul of consumer credit laws to increase consumer protection.

“The proposed changes include new responsible lending requirements, amendments to the oppressive credit contracts and hardship provisions and restrictions on financial providers who do not belong to an approved dispute resolution scheme,” Mr Tremain said.

He said the government would introduce ‘The Credit Contracts and Consumer Finance Amendment Bill’ to Parliament this year.

“As the matters involved are complex, the Government intends to release a draft Bill for consultation before introducing the final legislation to Parliament,” Mr Tremain said and added that he would attend consultation meetings throughout the country.

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