Payday lenders and rental companies are set to face tougher regulations and need to improve the way they view the needs of struggling families, according to a survey.
A Senate Economics Committee investigation, which reported on Friday, learned that in one case an unemployed person paid the equivalent of an 884% interest rate on a rented clothes dryer.
The survey found that payday loans were offered at rates between 112% and 407%.
“Often times, these products not only appear to have been targeted at financially struggling Australians – they appear to have been designed to take advantage of them,” the report revealed.
He recommended new laws to protect consumers, additional funding for regulators to monitor the small and medium credit contract industry, and a mandatory obligation to act in the best interests of customers.