[Greens-Media] Put a lid on debt traps - Greens

[Bennett, Ebony (Sen B. Brown)]

Thursday, 2 October 2008

Put a lid on debt traps - Greens

Australian Greens leader Bob Brown is calling on the Rudd Government to close debt traps which are leading Australians deeper into debt at a time of record high household indebtedness.

"Harvey Norman, for example, is offering the public two years or more non-payment periods, then huge interest rates (around 28%) and default penalties," Senator Brown said.

"Yesterday Gerry Harvey, head of Harvey Norman, said that if the US economy failed to turn around "we are in for a prolonged recession". He also predicted that unemployment would rise.

"Yet this potential increased unemployment and reduced income will coincide with these payment deadlines.

"This may trap thousands of customers. 

"The government should look at prohibiting such practices as a matter of wise consumer protection," Senator Brown said.

Senator Brown also backed yesterday's call by the Finance Sector Union, the Australia Institute and Care Financial Counselling for regulation of credit cards issued with an immediate purchase capability but consequent serious debt obligations. For example, GE Money offers credit cards where "Up to 100% of credit limit can be used for cash" and the ability to "withdraw $1000 a day from an ATM", as well as direct credit lines offering "Up to $3000 cash in the bank with just one phone call".

Senator Brown has written to the Minister for Consumer Affairs, Chris Bowen, asking him to review these practices and regulate them where necessary in the public interest.

Further information: Ebony Bennett 0409 164 603


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Ebony Bennett
Media Advisor 
Senator Bob Brown | Leader of the Australian Greens 
e: ebony.bennett at aph.gov.au 
m: 0409 164 603 | p: (02) 6277 3170 | f: (02) 6277 3185
w: www.bobbrown.org.au <http://www.bobbrown.org.au/>   <http://www.greens.org.au>