Card contracts can’t be understood
The government should legislate for fair terms in contracts says a welfare group because the system of full disclosure of all contract terms to credit card customers is not working says a charity group. Credit card contracts are too long and the language used is too difficult, legalistic and obscure for many people to understand says a new study from the Brotherhood of St Lawrence. "Many [borrowers] admitted to just not having the literacy levels, experience in financial markets or access to advice to be able to understand the contract," the study says. As a result they chose to take the risk and proceed in the hope the lender had their "best interests at heart". Vulnerable borrowers such as low income earners often did not have the option to shop around and therefore accepted any offers that were made to them from banks or other card issuers. All survey participants understood they had a responsibility to repay the loan but they did not understand the ramifications of not repaying it. They would be unable to initiate court action, as was their right, over unjust transactions or for relief on hardship grounds.
Source: Sydney Morning Herald