Don’t make the poor pay more: Consumer Action

Consumer leases poor people pay

Today, ALP Senator Doug Cameron will be leading debate on a Bill to exclude consumer lease products from Centrelink’s welfare budgeting tool Centrepay.

What are ‘consumer leases’? 

A consumer lease is a type of credit contract for the hire of goods where:

  • the hire is for domestic or household purposes;
  • the person hiring the goods does not have a right or obligation to purchase the goods; and
  • the total amount paid by the consumer is greater than the value of the goods being rented.

Many companies use this model nationally to rent electronics, whitegoods and furniture to consumers.  By the end of the contract, the consumer will typically have paid 2-5 times the normal retail cost.

 Quotes attributable to Gerard Brody, CEO of Consumer Action Law Centre:

“Consumer lease providers shouldn’t have access to Centrepay. Centrepay was intended as a budgeting tool to help welfare recipients, but got hijacked as a selling point for high cost products.”

“Rent-try-buy products mean that the poor pay more. These providers shouldn’t be given priority over the basics like food, transport, rent and utility bills.”

“We welcome Senator Cameron’s Bill and would like to see the Government take urgent action to keep Centrepay focused its original purpose. Maintaining the integrity of Centrepay should be a bipartisan issue.”

Quotes attributable to Aaron Davis, CEO of the Indigenous Consumer Assistance Network (ICAN):

“There is obviously a market need for essential house items in Australia’s most disavantaged homes, unfortunately high cost consumer leases just add to the disadvantage and poverty. Government, industry and the community sector need to further develop ethical solutions like the No Interest Loans Scheme (NILS) to ensure Australia’s most disadvantaged have a bed to sleep on, a refrigerator to store their food and a washing machine to clean their clothes.”

For interviews or comment from Gerard Brody or Aaron Davis contact: Jonathan Brown, 0413 299 567 media@consumeraction.org.au

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