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Date Published : Friday, January 11, 2008
Consumers who feel they have been a victim of unfair lending practices should take their complaints to the financial ombudsman, councillors have urged.
As the number of incidents of unscrupulous financial lenders increase, many Australians are unsure of where to turn to for help, news.com.au reports.
Home loans and personal loans, which have either high rates of interest or forceful sales teams, have been the major cause for concern throughout the Australian financial industry, with complaints to the Credit Ombudsman Service Ltd (COSL) increasing by 17 per cent during 2007.
Further to official complaints, the number of calls made to COSL helplines increased by 40 per cent during the last 12 months.
Raj Venga, from COSL, told the news provider: "Some of the characteristics of predatory loans are excessive commissions and charges being loaded on to the principal sum borrowed, higher interest rates and even higher default rates, repayment holidays and very short terms of six to 12 months."
In one instance, a consumer signed up for a personal loan with an unregistered loans company and was ordered to pay an interest rate of 23.6 per cent.
Recently, interest rates from Commonwealth Bank were raised to 8.67 per cent on some of its home loans, following in the footsteps of the National Australia Bank and ANZ, which increased their rates earlier this month.
As a result, the COSL advises consumers to only take out loans, insurance policies, credit cards or mortgages from COSL accredited firms to avoid such circumstances.
Find and apply online for loan deals.
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