Consumer issues

Consumer issues

This video provides basic legal information about Australia's legal system for people new to Australia. It is the part of a series of videos about the law for people who have recently arrived in Australia.  See more videos at What's the law?

Transcript

Text: Consumer issues

Van is reading a sign in a shop window that says, ‘Instant cash loans here!’ Van enters the shop.

[Vision changes to smiling Assistant.]

Assistant: Hi mate. Do you need a loan?

[Vision changes to close-up of Van.]

Van: Maybe. How much money can you give me?

[Vision changes to close-up of Assistant.] 

Assistant: $500 on the spot. It’ll be in your bank account tomorrow.

[Vision changes to close-up of Van.]

Van: Great. I just need some extra money until I get paid next week. So I can pay my rent.

[Vision changes to close-up of smiling Assistant.]

Assistant: That’s what we’re here for. We just need to check some recent bank statements. 

[Vision changes to close-up of Van and Assistant pointing to a printer.]

Assistant: You can use our computer here to log into your bank account and print them out.

[Vision changes to close-up of bank statement.]   

[Vision changes to close-up of Van and Assistant looking at bank statement.]  

Assistant: Ok, great. I just need your bank details so I can set up a direct debit. 

[Vision changes to close-up of smiling Assistant with paperwork.]

Assistant: The payments come straight out of your bank account every two weeks. 

[Vision changes to close-up of Van looking at the paperwork.]

Assistant: You won’t even have to think about it.

[Vision changes to close-up of paperwork being signed by Van.] 

Van is at work, talking to his colleague John.

[Vision changes to Van at work holding his mobile phone, talking to John.]

Van: I got this great loan yesterday.

[Vision changes to close-up of Van’s mobile phone with loan details.]

Van: It was really easy to get the loan. They just looked at some bank statements, I signed the papers and look – the money is already in my bank account! 

[Vision changes to close-up of Van and John looking at Van curiously.]

John: Do you have to pay a lot of interest and fees?

[Vision changes to close-up of Van.]

Van: I’m not sure about all the details. The payments come straight out of my bank account every two weeks and it will all be paid back in six weeks. I just need some extra money to pay rent before we get paid from work. This is so easy!

[Vision changes to close-up of John looking cautious.]

John: But can you afford to make all these repayments after you pay rent, bills and shopping? It sounds too good to be true.

[Vision changes to close-up of Van.]

Van: It will be fine. I’ll get more shifts here soon. The extra work means I’ll have enough money to pay everything back.

Text: 2 weeks later…

Two weeks later, Van is at home sitting at his computer. The computer displays his bank account balance and transactions. Van has no money left in his account. Van is holding an electricity bill for $100, the bill reads “DUE NOW”, he looks worried. Van is at work, talking to his colleague John.

Text: 1 month later…

[Vision changes to Van at work waving to John.]

Van: Hi John.

[Vision changes to close-up of John.]

John: Hey Van. How is everything going?

[Vision changes to close-up of Van looking stressed.]

Van: I’m in some trouble with that loan. The payments are taken out of my bank account as soon as I get paid from work. Now there’s not enough money left to pay my other bills.

[Vision changes to close-up of bank account reading “Payment Declined Insufficient Funds”.]

Van: Last week the loan payment didn’t go through because there wasn’t enough money in my account. And then the bank charged me more fees.

[Vision changes to close-up of Van.]

Van: And now the loan company called me and said I have to pay money for fees and interest. They said if I don’t pay, they will send a debt collector to get the money from me.

[Vision changes to close-up of John frowning.]

John: That doesn’t sound right. I think you should talk to someone who knows more about this stuff. Financial counsellors can give you free help about money and bills.

Van is at home, on the phone to a financial counsellor.

[Vision changes to split screen of Van talking to Financial Counsellor on the telephone.]

Van: Hello. I got a loan and I can’t pay it back. They are saying I must pay extra money in fees.

[Vision changes to close-up of Financial Counsellor on the telephone.]

Financial Counsellor: Ok, let’s see how I can help you. First, can you tell me the details of the loan?

[Vision changes to close-up of Van.]

Van: I saw a sign out the front of a shop that said cash loans. So I went in to the shop…

[Vision changes to split screen of Van and Financial Counsellor talking on the telephone.]

Financial counsellor: Under the law, before a lender gives you a loan they must assess whether you can afford to pay it back. It sounds like the lender at the shop did not do this properly. 

[Vision changes to close-up of Financial Counsellor.]

Financial Counsellor: It’s good that you came to us for advice now. There are a few different things that you can do. You could contact the lender and tell them you are finding it difficult to pay the loan back. This is called being in financial hardship. You could ask for more time to pay or for a payment plan to pay the loan back in smaller amounts. 

[Vision changes to split screen of Van and Financial Counsellor talking on the telephone.]

Financial Counsellor: You can also make a complaint about the lender giving you an unsuitable loan. You can do this with the Financial Ombudsman Service or the Credit and Investments Ombudsman. You can also complain if the lender has treated you unfairly. They cannot harass or bully you to make you pay.

[Vision changes to close-up of Van looking worried.]

Van: Ok, thanks. I might do that. But I’m still worried about paying all my other bills. 

[Vision changes to close-up of Financial Counsellor.]

Financial counsellor: You could contact your gas, electricity, water and phone providers. You can tell them you are in financial hardship, and ask for payment plans for those bills, too. You can also apply for a utility relief grant for help to pay your gas, electricity or water bill. Your provider can give you the forms you need to fill out to apply for this grant.

[Vision changes to close-up of Van looking relieved.] 

Van: Thanks, that sounds good. 

[Vision changes to Financial Counsellor.]

Financial counsellor: We can also help you work out a budget so that you know what things you have to pay for when you get paid from work.