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Desperate families are turning to high-cost online loans with interest rates as high as 700%. Reporter Bridget Kelly finds the pain is even being felt locally
J
L Holyoake has a bone to pick. As the service manager for Pakuranga and Howick Budgeting Services, she has been watching the new trend of high interest online loans financially ruining some of the community’s most vulnerable people. People are going online to get small loans to cover things like groceries between pay cheques, and not realising how quickly it all adds up. “The fact is a few hundred dollars turns into several hundred, and they’re struggling to pay it back,” said Holyoake.
“I don’t want to make out the people coming here are in the wrong, because they’re not, it’s just pressures of the way life is now. People get into debt.” The Commerce Commission is currently investigating six online high-cost short term lenders, and is urging people to consider whether the terms are reasonable before applying. “These investigations are at various stages and they focus on compliance with the lender responsibility principles,” the Commerce Commission said. It’s not just single mothers,
or people on the benefit getting caught out either. Holyoake has had couples with two incomes caught out by these schemes. There’s an array of online finance companies now, where people can hit the internet and borrow money, and although there is a responsible lending code in place, it doesn’t seem to be helping. “It feels as if there’s not as much checking done, because people are getting loans and they can’t afford them, they can’t repay them and it’s really high interest
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Pakuranga United Rugby Club Premiers took to the field decked out in pink on Saturday as part of a fundraiser for the New Zealand Breast Cancer Foundation. PURC’s Amanda Dyason said while the final amount raised was yet to be confirmed, it was expected to total around $12,000. An auction and high tea was held before the game where last minute items included tickets to the final test between the All Blacks and British and Irish Lions at Eden Park on Saturday. Dyason said it was a team effort with boys coming in early to help set up for the pregame events. Pakuranga went down 26-27 to Grammar TEC after a halftime lead of 19-0. ■ Full results, page 23
High interest loans hitting community hard
JAMI-LEE ROSS
Senior Stylist
Vol 46, No 27
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PO Box 230109, Botany, Auckland 2163
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rates, up to 700 per cent sometimes,” said Holyoake. Just Cash says on their website that you can get a loan of up to $1000 in less than four minutes. There is no interest on your first loan, and you’ll have 45 days to pay back $1573. Once you have applied for your first loan, you can apply for a second via text. On Moola, you can apply for a loan even if you have bad credit history, with a 547.5 per cent annual interest rate on a short term loan. ➤ Turn to Page 3