Insurance

“The passing of these reforms, in the aftermath of COVID and during a cost-of-living crisis, comes not a moment too soon,” said Gerard Brody, CEO of Consumer Action.

In December after a late-night Parliamentary sitting, hundreds of consumer advocates from dozens of organisations in the Stop the Debt Trap coalition celebrated the passing of the Financial Sector Reform Bill 2022 which enhances long overdue consumer protections for high-cost payday loans and consumer leases for household goods.

A 2016 independent review of these types of high-cost credit arrangements recommended a range of reforms, which were accepted by Government but not acted on for years, until this Bill passed Parliament. The passing of the legislation was a big win for the sector as the bill includes:

• Caps on the maximum repayments a person can be required to make for payday loans and consumer leases — the regulations have set caps for each product at 10% of a borrower’s income

• A new cap on the amount that can be charged for a consumer lease, so that the maximum charge cannot be more than 48% of the fair value of the good leased per year, for a maximum of four years

• A ban on public canvassing of consumer leases, which seeks to address unfair sales practice such as door-to-door and