1 Nov 2012

Ministry urges Pacific victims of loan sharks to complain

6:45 pm on 1 November 2012

Pacific families in debt to loan sharks are being urged to lay complaints under the financial disputes resolution scheme.

The Ministry of Consumer Affairs has launched a free hotline to help Pacific victims of unscrupulous lenders to lay complaints and get budgeting advice.

A recent survey of nine budgeting services in Auckland found their 888 Pacific clients had debts totalling nearly $25 million, an average of $28,000 each.

An adviser to the ministry, Josephine Bartley, says many Pacific families don't know their rights when dealing with finance companies and feel intimidated about complaining.

She says the hotline is an easy way for people to check loan contracts to make sure they are not being ripped off and that the finance company is acting legally.

Ms Bartley says the ministry is also hoping to flush out unregistered lenders.

Call for interest rate cap

A union representing low-wage Pacific workers in retailing and warehousing has renewed calls for a cap on interest rates - some several hundred percent - charged by fringe lenders.

FIRST Union says a new Ministry of Consumer Affairs campaign to help Pacific families in debt to loan sharks is not enough to protect them.

Terry Tuiletufuga, convenor of the union's Pasifika Fono, says it is a step forward - but what is really needed is a cap on interest rates for fringe lenders.

Mr Tuiletufuga says the Government's proposed changes to credit laws do not go far enough to protect Pacific families from loan sharks charging several hundred percent in interest.