Bulletin

Issue: January/February 2006

News

Call for new laws against reckless lending

A report by La Trobe University Law students has called on the Victorian government to enact new legislation to deal with abuses in the provision of finance through credit cards.

Based on their study into the impact of the law and social policy on Victorian credit consumers, it was prepared by senior law student researchers in association with the West Heidelberg Community Legal Service.

The report said vulnerable consumers should not be left to the mercy of those who profit from their inability to make ends meet. It highlighted over-commitment in the community from the use of credit, and claimed current legal provisions and their application provided insufficient protection for consumers against reckless lending.

‘This is predominantly the result of the fact that credit lenders are currently not required to assess the ability of their debtors to repay their debts with reference to their financial position at the time that an increase in credit is provided.’

The report also recommends greater regulation of services offered by fringe credit providers, like payday lenders.

La Trobe Law lecturer and Supervising Solicitor in Community Legal Education at the West Heidelberg Community Legal Service, Liz Curran, said student researchers, while on placement at the Legal Service, saw first-hand the impact on clients of financial hardship and reckless lending.

The report has been forwarded to government. It was written by Donna Curnow, Natasha Jankovska, Susanna Kirpichnikov and Elizabeth McGrath, as part of their clinical placement at the West Heidelberg Community Legal Service.

Another student report, ‘The Impact of the Law and Social Policy on the Community: Current and Proposed Terror Legislation’ was forwarded to the Senate Legal and Constitutional Affairs Committee Inquiry prior to the passing of the new laws last December.

It said reversing the onus of proof in the new legislation was ‘ominously unjust’ and that its secrecy provisions would encourage lawlessness as a result of a ‘significant diminution of public discussion’.

‘The media are also affected as it brings into the process the criminalisation of those who provide information to journalists and the possibility of media being prosecuted for publication of those views.’

A report by a third group of students dealt with the Control of Weapons Act.