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Date Published : Tuesday, March 18, 2008
People looking to take out personal loans from loan sharks could become the victims of greedy conmen, a new report has warned.
The study by the Australian Securities and Investments Commission (ASIC) found that some unofficial loan deals - which happen away from the scrutiny of banks and other financial services - are stripping up to 30 per cent of built-up equity away from the homeowners, in addition to fees in excess of $20,000.
According to the Herald Sun, the report found that a growing number of refinancing deals on personal loans and home loans were taking part away from the eyes of the regulator, as debts mount among Australian consumers amid rising interest rates on mortgage repayments.
The report found that, in one case, the loan shark charged fees in excess of $24,000 while, in another case, interest rates were included at more than 20 times the industry standard level.
"These borrowers were intent on saving their family home which placed them in a vulnerable position where they were prepared to accept almost any solution," ASIC consumer protection director Delia Rickard said.
In related news, a report by the National Centre for Social and Economic Modelling concluded that many more Australians than ever before are requiring extra financial help in order to sustain their place on the property ladder.
It showed households needed 7.5 times their annual disposable income to buy a typical house in 2006, up 53 per cent from 1996 when households needed five times their disposable salary.
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