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Interest rates to be capped QUEENSLAND will soon have new legislation capping the exorbitant interest rates and fees and charges which are being levied by some lenders.Fair Trading Minister, Margaret Keech, has told State Parliament the Government is committed to protecting the rights of vulnerable consumers who often have no choice but to rely on fringe lenders. "We have already taken steps to do this by bringing fringe credit providers under the Uniform Consumer Credit Code, but more can be done," Mrs Keech said. "Now borrowers get a written contract setting out the costs of the loan, and lenders have to take into account the borrower's ability to service the debt. "The next step is to limit the total cost of loans, including capping interest rates and associated fees and charges. "A lot of work is being done to develop a framework which will rectify defects in similar legislation already introduced in New South Wales and Victoria. "New South Wales was forced to amend its original legislation which just capped interest rates because lenders got around the laws by increasing fees and charges. "We won't repeat that mistake." Mrs Keech cited the case of one Victorian consumer who borrowed $1500 to attend a funeral, but was charged more than $2000 in fees - hardly an example of successful consumer protection. "During my own research into this issue, Queensland fringe credit providers quite arrogantly told me they'd get around any laws we introduced," she said. "This is a lucrative industry, and some lenders have tried every trick in the book to circumvent legislative approaches elsewhere. "I'm determined that we learn from the mistakes of other states, and draft legislation which offers Queenslanders the best possible protection. "If I adopted the approach demanded by some I'd be making life easier for the shonks, and tougher for Queensland's vulnerable consumers. "I won't do that - and I make no apology for taking the time necessary to ensure we get it right." |
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