An analysis of financial complaints data by consumer group CHOICE has revealed the South Australian postcodes with the highest number of complaints about credit products since the end of the Banking Royal Commission public hearings. The analysis comes as a Senate vote looms on the Federal Government’s proposal to axe safe lending laws.
“After the scandals of the Banking Royal Commission, banks still cannot be trusted to sell credit products to people that are safe,” says CHOICE CEO Alan Kirkland.
From November 2018 to December 2020, South Australians made 1791 complaints to Australian Financial Complaints Authority (AFCA) across consumer loans, credit cards and housing finance. Complaints on credit products can range from irresponsible lending and charging of incorrect fees to poor customer service, fraud, and unfair terms and conditions.
Adelaide’s CBD and north eastern suburbs dominated the list with over 300 complaints about credit products across three postcodes (5114, 5000 and 5108).
“Record-low interest rates, rising house prices, high unemployment and record lending in South Australia are adding more risks to the South Australian economy. The federal government’s plans to axe safe lending laws will only add more fuel to the fire,” says Mr Kirkland.
In a piece penned last month, Kirkland noted that the rising cost of housing, increased competition for rentals and cost of living in South Australia puts the “once famed affordability of South Australia” at risk. Since then, South Australia has had the worst unemployment figures in the country.
“It would be unwise and irresponsible to scrap safe lending laws in the current economic conditions. This will lead to a rise in predatory lending in South Australia. South Australia needs investment and support – not exposure to unaffordable personal debt for a community recovering from COVID-19,” says Mr Kirkland.
CHOICE is calling on all South Australian Senators to vote against the legislation when it is introduced in the Senate, expected this week.
“Crossbench Senators Stirling Griff and Rex Patrick have played an important role in securing improvements to consumer protection in the financial system in recent years. With the Senate about to determine the fate of the government’s plans, they will now play a critical role in deciding whether South Australians are protected from unsafe lending in the future,” says Mr Kirkland.
