Latest news with #ConsumerActionLawCentre
Herald Sun
18 hours ago
- Business
- Herald Sun
Aussie consumers warned over ‘dangerous' wage advancing pay trend
Don't miss out on the headlines from Business Breaking News. Followed categories will be added to My News. Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said. Originally published as Consumer advocates warn Aussies about 'dangerous' wage advancing products and call for further regulation
News.com.au
19 hours ago
- Business
- News.com.au
Consumer advocates warn Aussies about ‘dangerous' wage advancing products and call for further regulation
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
Perth Now
19 hours ago
- Business
- Perth Now
Aussies warned over new pay trend
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. Consumer advocates have warned the wage advancing products are sending thousands into debt spirals. NewsWire / Nicholas Eagar Credit: NewsWire 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act, a long-time campaign goal for consumer advocacy groups. Buy now, pay later products face regulation under the Credit Act from June 10. NewsWire / Gaye Gerard Credit: News Corp Australia 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
West Australian
19 hours ago
- Business
- West Australian
Consumer advocates warn Aussies about ‘dangerous' wage advancing products and call for further regulation
Australian consumers have been warned about a 'dangerous' new financial product sending struggling people into debt spirals, and consumer advocates say urgent regulation is needed. Wage advance services are advertised as offering a quick and easy way to borrow money before your payday, some offering the advances within a minute. The products are under no obligation to assess a person's ability to service the debt or to give financial hardship assistance. This has led to a chorus of consumer advocacy groups to call on the Albanese government to urgently regulate the services that they say make the cost-of-living crisis worse and are sending thousands into dangerous debt spirals. Consumer Action Law Centre chief Stephanie Tonkin said she had heard from people who had taken multiple wage advance contracts and had ended up committing their whole income to repaying the loans. 'These products encourage people to borrow against their future income to meet their essential living needs, and this can cause serious harm when there's no extra money in the next pay cycle, only greater debt,' Ms Tonkin said. 'The fees add up very quickly if you're stuck in a cycle of borrowing now to pay more later.' This fresh warning comes as buy now, pay later (BNPL) products are brought under the National Consumer Credit Protection Act , a long-time campaign goal for consumer advocacy groups. 'We want wage advance brought under the Credit Act as a priority to give people the same consumer protections as BNPL,' Ms Tonkin said. 'It's taken years for BNPL to be regulated – we can't wait that long again.' Consumer Credit Legal Service principal solicitor Roberta Grealish likened the proliferation of this type of financial product to a game of 'whack a mole'. 'Wage advance products now need to be brought within the Credit Act to prevent the harms that the new BNPL rules hope to address simply shifting into this space,' Ms Grealish said. Choice campaigns director Rosie Thomas said the work to close 'lending loopholes' was not yet finished. 'Consumers will continue to be harmed until wage advance is also regulated as credit,' she said.
Sky News AU
21-05-2025
- Business
- Sky News AU
Energy retailers accused of misleading customers with 'sneaky' price tactics in landmark complaint lodged to ACCC
Consumer watchdog CHOICE has lodged a "super-complaint" with the ACCC targeting Australia's energy retail sector. In July 2024, CHOICE, alongside the Consumer Action Law Centre and the Council of Small Business Organisations Australia, was recognised by the federal government as one of the first organisations in Australia authorised to file a 'designated complaint'- a grievance similar to the UK's 'super complaint' - with the Australian Competition and Consumer Commission. The consumer watchdog argues energy retailers' "complicated and confusing" price tactics are the 'stuff of nightmares' and are intended to keep people 'as confused as possible.' The action marks the first designated complaint from CHOICE and only the second example of this kind of action in Australian history. The 'super-complaint' flagged concerns over 'potentially misleading' tactics, namely advertisement of new plans that are cheaper yet have an identical name, suggesting customers who were under the impression they were already on the best deal are unknowingly stuck with a higher price. Ahead of lodging the complaint, CHOICE reviewed 382 energy bills issued between January and March 2025, 64 of which advertised a legally required 'best' or 'better offer' with the same names as the ones customers were already on. CHOICE CEO Ashley de Silva said customers were led to believe they were already on the best plan because of the duplicate names. 'Across these 64 examples, people could have saved an average of $171 annually had they switched to the cheaper plan, even though it had the same name. The highest potential savings amongst these examples was $588 per year," Mr de Silva said. "The potential impact of this practice is significant. CHOICE estimates that reusing identical names for plans with differing prices could, in aggregate, be costing consumers approximately $65 million in savings.' A 2024 review by the ACCC found that 81 per cent of consumers could have saved money by switching offers. "It shouldn't be this hard to know if you're being ripped off on your energy bill," Mr de Silva said. "We're calling on the ACCC to enforce the law with strong court action to put an end to these dodgy practices costing consumers money." In addition to the identical names, CHOICE has urged the ACCC to probe whether energy retailers are breaking the law by using names and descriptions that imply savings for poor-value plans, as well as encouraging consumers to switch to plans the customer is not eligible for. "CHOICE can only submit one designated complaint each year, and much like the Shonky Awards, we only use it for the most serious issues we see. We are calling on the ACCC to urgently investigate these sneaky tactics used by energy retailers to confuse and potentially mislead consumers," Mr de Silva said. The ACCC must publicly respond to the complaint within 90 days.
