Personal Loan Education

23/12/2011

A new advertisement from one of Australia's leading payday loan brokers, The Cash Store, has raised the ire of two community legal centres, who fear the advert may result in many Victorians entering the New Year in a perilous financial position.

The flyer, delivered to households in the Mildura region, is a certificate that states the recipient is guaranteed a loan of "at least four hundred dollars" and implies that the recipient has been pre-approved without any credit assessment - a practice which would fly in the face of responsible lending laws and undermine the payday lending industry's claims to be lending responsibly.

Catriona Lowe, co-CEO of Consumer Action, said that under Australian law lenders and brokers were required to make reasonable enquiries about each customer's financial circumstances and ensure loan repayments wouldn't cause them substantial hardship before lending them money.

The Murray Mallee Community Legal Service, which services the area where the flyers were marketed, also expressed concern that The Cash Store was using the holiday season to market its loans, telling customers to bring in the certificate to "get your extra holiday money today".

Source: Consumer Action Law Centre