Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2002 Week 3 Hansard (6 March) . . Page.. 595 ..

MS TUCKER (continuing):

be the only way to keep payments up to date, the couple accepted the credit increase. However, this deepened their financial difficulties.

This is only one example, but it illustrates some key points of the situation. Firstly, the bank is applying one set of standards to an application to vary credit, and another to promoting increased credit. Secondly, it illustrates that the bank is not looking at the current financial situation of their marketing targets before sending out the offer.

This has been a problem for some time, and it is an increasing problem. When the former version of this bill was introduced into the Assembly last year, we learned that the Australian Bureau of Statistics had tracked new and increased credit limits in the ACT. Credit limits increased from $359 million in 1997-98 to $554 million in 1998-99-an increase of $194 million.

Nationally, personal debt has increased between 10 per cent and 15 per cent every year since 1995. The Reserve Bank's figures at the end of last year show that, for the first time, total personal debt was approaching $19 billion. This is not something to be proud of.

The provision of consumer credit is regulated by a uniform consumer credit code-a national agreement run on a cooperative basis between the states and territories. The UCCC operates via the Ministerial Council on Consumer Affairs. Its primary instrument is the Australian Uniform Credit Laws Agreement 1993. That is administered by the uniform consumer credit code management committee, made up of state and territory officials.

Any amendments to the legislation derived from the agreement, which would change or add to its provisions, are supposed to be, firstly, agreed to by the other members of the group. Like all such national agreements, it took a lot of work to get the system up and running. Hence there is some caution about rocking the boat.

Each state or territory has enforced legislation that gives effect to the original model. Banks are additionally self-regulated by the voluntary banking code of practice, but not all credit card providers are banks. So how could this practice be allowed? Strictly, as I have said, it is not. It is open to someone, in this type of situation, who has got into debt they cannot afford, to challenge the contract in court.

You would think credit providers would be worried about this threat, and hence take care to ensure they are diligent and prudent in making loans and extending credit card limits. However, taking a case to court is not easy. To do so, a person needs a legal expert, and they need the will to fight someone with many more resources.

The ACT has no specialist consumer legal service. That is something that I hope will be addressed during this Assembly.

The initial challenge does not need to be made through a lawyer. However, it does require a person to be empowered and well enough informed to realise that they can challenge the situation. There are not many cases that reach court. Certainly there have been none in recent years in the ACT. Any challenges tend to be settled out of court, which keeps the banks or other lenders' names out of the papers.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .