It has been revealed that Centrelink gave appliance retailers accused of exploitation access to the Centrepay system to withdraw payments from Centrelink recipients.
This allowed these approved businesses the ability to withdraw funds directly from Centrelink payments prior to being received by the recipient – even before necessities such as rent, power and food expenses could be covered.
In 2015, the Australian Securities and Investments Commission (ASIC) warned Centrelink that the lease-to-buy and appliance rental sector was targeting Centrelink recipients, often charging more than five times the retail price of leased goods.
“We had examples of consumers who were on disability pensions or Newstart allowance where they were literally running out of money at the end of the month because of the impact of the repayments that were being made for those consumer lease products,” ASIC senior executive Michael Saadat told the ABC.
According to research by Guardian Australia, at least four appliance rental companies that had been punished by the regulator, or were placed on binding agreements to rectify potential legal breaches, were granted approval to use Centrepay.
The Federal Government is looking to introduce new restrictions on small credit companies including rent-to-buy operators to keep customers from spending more than 10 per cent of their total income on contracts.
What do you think? Does more need to be done to protect the most vulnerable Centrelink recipients? Should retailers with a history of exploitation and targeting have their Centrepay access revoked?