Budget agencies are concerned about high-interest payday lenders requiring borrowers to sign "wage deduction authorities" they can use to tap into the salaries of borrowers who miss repayments without having to go to court.
Payday lenders like Save My Bacon and Payday Advance market their loans as short-term stop-gaps for workers experiencing a cash crunch, but their interest can work out at well over 500 per cent a year.
To get the loans, borrowers have to sign wage deduction authorities, and in some cases lenders claim they are "irrevocable", or that borrowers certify not to dispute the deductions.
And that has drawn a warning from the Commerce Commission, which said: "A wage deduction authority should not be described as 'irrevocable'. Describing it as such is prohibited by section 5 of the Wages Protection Act 1983."
from
http://www.stuff.co.nz/business/money/97216544/Complaints-grow-about-high-cost-short-term-lenders
No comments:
Post a Comment