Students highlight need for law reform
As the cost of living soars, payday loan charges can top 700 per cent.
At a time of increasing hardship due to rises in the cost of living, vulnerable Victorian consumers have less protection than borrowers in other states from exploitation through excessive fees and charges demanded by payday lenders.
A study by a senior La Trobe University law student highlights an example where a borrower is required to pay an effective rate of 740 per cent charges on a $300 loan – despite the government recently capping the interest rate on payday loans at 48 per cent.
Patrick Stobaus, who carried out the study while on clinical legal education placement at the West Heidelberg Community Legal Service in Melbourne's north, said the Victorian Government needed to move beyond its new disclosure requirements and interest cap, and take action to limit the amount in fees that can be charged.
'The 48 per cent cap strictly only applies to interest and is therefore of little value in protecting consumers from excessive fees. Victoria is now, in the words of one consumer lawyer, “embarrassingly” out of step with several other states where the cap is applied across the board to interest and fees,' says Mr Stobaus.
Apart from stressing the urgency of further law reform to control payday lending in Victoria, Mr Stobaus has called on the State Government to work with other states and the Commonwealth to 'look at ways of better assisting the most disadvantaged in the community to ensure that dubious means of finance such as payday loans are not their only option'.
The payday study was one of six La Trobe law reform projects distributed to leading State and Federal legal decision makers recently. The projects were supervised by Dr Liz Curran, former La Trobe law lecturer and student clinical legal education supervising solicitor at the West Heidelberg Community Legal Service.
High use of capsicum spray by police
With a recently reported 1,600 per cent increase in the use of capsicum spray from 1998-2008, another study suggests the need for better training for police in verbal negotiation and highlights a disproportionate use of force being used against juveniles and people between the ages of 16-25.
Law student Simon Bogli says in his report there are 'cultural concerns within the police force that must be addressed if the police are to improve their standing in the community, especially amongst the youth.
He says 78 per cent of young people say that police 'rarely' or 'never' treat them with respect.
'This may explain the mistrust, and to a degree the force, including capsicum spray, that police may have to use against young people. This is not a sustainable relationship. A community policing organisation is more effective if it maintains good relationships with all members of the community,' he concludes.
Other studies examined the provision of sub-standard and inhumane accommodation through the Office of Housing; lawyers taking advantage of consumers with a limited understanding of the law by claiming legal costs in letters of demand; sentencing of people with an intellectual disability to prison – a practice that the researchers claim may well be in breach of the new Victorian Charter on Human rights (see also Human rights - on the home front); the high cost of expert witnesses and the impact this has on access to justice; and complaints about police misconduct lodged at police stations.