A payday loan is a small amount of money that is loaned to a person with a very high repayment rate. The idea behind a payday loan is for a borrower to repay the loan after having received their next wage or Centrelink repayment. Payday loans may be referred to as Small Account Credit Contracts, if they satisfy certain conditions. Although the amount of fees that can be charged are limited by the law, these types of loans can still negatively impact consumers.
A CCLSWA client found herself in a dire debt situation when she was granted 19 payday loans between March 2012 and October 2014 amounting to $9800. CCLSWA believed that all of the loans were unsuitable, as they could not be repaid without her suffering substantial financial hardship. Repayments of $13 000 had already been made. This client was also approved for two unsuitable consumer leases, where she was falsely told that she could own the rental items if she paid an extra month’s repayment. CCLSWA advised her that her offer to purchase the goods would have to be accepted by Renters R Us, at a higher amount. As of 2016, the client had paid $2060 for a computer and $900 for a television, with amounts still owing.
Watch our video about the dangers of payday loans. For more CCLS videos visit our CCLS Youtube channel
On 29th March CCLS took part in the NACLC
‘Social MediaDay of Action’ designed to flood
social media with posts about the funding cuts.
CCLS Tweeted stating:
"Without community legal centres, our law student volunteers would not have a place to gain valuable and necessary experience #equaljustice"
Consumer Credit Legal Service (WA) Inc. is a statewide service providing free legal advice and/or representation in the areas of banking, finance, credit; and consumer goods and services. The organisation provides free assistance through the telephone advice line (08 9221 7066), casework and community legal education.