Tony Lupton - Speech
Consumer Credit (Victoria) and Other Acts Amendment Bill
27 February 2008
I am pleased to speak in support of the Consumer Credit (Victoria) and Other Acts Amendment Bill. It is pleasing that the opposition has indicated its support for the legislation. I commend the process that has been undertaken in the development of the bill before the Parliament. In particular I recognise the work that was done by the member for Monbulk, who is now the Minister for Sport, Recreation and Youth Affairs, through his review of consumer credit. He undertook extensive work and consultation with a wide variety of stakeholders in relation to the reform and updating of consumer credit legislation in this state. The government received the report from the member for Monbulk in March 2006 and made a response in late 2006. As a result the Minister for Consumer Affairs, who is at the table, has been responsible for the development of this legislation.
The bill does a number of very important things which will improve the circumstances for those seeking credit provision here in Victoria.
The provision of credit is very important in the way that, from time to time, most people in Victoria gain access to goods and services. It is important that the protections in place for consumers in relation to the way credit is provided be rigorous and robust. It is also important that people be aware of their rights and be able to make sure they have access to those rights and entitlements to protect their position under our credit laws. A number of matters came out of the review of the consumer credit legislation, including the responsibility of the national Parliament. A number of those matters are currently being progressed through ministerial councils at that level with the participation of the state and territory governments, led very ably by the Minister for Consumer Affairs in that regard.
The recommendations of the review which fall within the jurisdiction of the Victorian Parliament and which the government has accepted are contained in this legislation.
In overview what this legislation does is provide for an enhanced form of registration of credit providers in this state and improve dispute resolution mechanisms that should be and will be available for people who take out credit. The enhanced registration scheme is an important one in consumer protection terms, because regrettably what we find is that in the provision of services such as consumer credit from time to time, there are players in the market who are not fulfilling the proper and lawful obligations of a credit provider.
The bill will introduce an enhanced registration scheme for credit providers which will require those providers to provide a range of important information about their businesses to Consumer Affairs Victoria, and this will enable Consumer Affairs Victoria to undertake appropriate targeted compliance and enforcement activity against credit providers who may be at high risk of engaging in predatory lending practices such as payday or fringe lending practices.
This will also help consumers to make important informed decisions about credit providers, so making sure that all credit providers are part of this registration scheme will be a signal advance for consumer protection in this state.
Secondly, the bill provides for an improved dispute resolution mechanism. What it does is establish a mandatory scheme of external dispute resolution. Most of the large and mainstream credit providers already provide for such dispute resolution, but this legislation will ensure that consumers who have a complaint against a credit provider are able to have the complaint heard and determined by an independent body no matter what credit provider they have. At present the unfortunate circumstance is that those credit providers who one might say are more likely to be in the high-risk category or are more likely to be lending in a risky manner are the ones that do not have this type of dispute resolution mechanism in place.
This legislation is really making sure that the credit provision industry is going to be properly targeted and that the ones that need to improve their performance lift their game. That is an important recognition of the need for proper consumer protection in this field.
A further and important measure that is included in this legislation is to provide for the director of Consumer Affairs Victoria to have the power to institute representative proceedings on behalf of consumers under the Fair Trading Act. The bill extends this power so that the director can also take representative action under the Consumer Credit (Victoria) Code. Currently the director of Consumer Affairs Victoria can take these actions under the Fair Trading Act but not under the consumer credit code, and it seems appropriate that the government has come to a sensible and appropriate decision that the director of Consumer Affairs should have that same ability under both the consumer credit code and the Fair Trading Act.
Legal action will be able to be taken by the director of Consumer Affairs in either the Victorian Civil and Administrative Tribunal or one of the higher courts in the state.
It is appropriate that the director have the ability to make that choice based on the public interest and the circumstances of a particular case so that we end up with a situation where appropriate precedents are established in this state for the proper protection of consumers. The use of representative actions by the director of consumer affairs is a very sensible and appropriate way for consumers rights to be effectively advanced by the director without the need for individual consumers to their own behalf, which of course is time consuming and can be quite costly. These are very sensible and important consumer protection advances that are contained in this bill.
There are a couple of other very important elements which particularly refer to protections for homeowners and people who are seeking to own a home through rent-buy schemes. The bill provides greater protection for consumers who are in the situation of seeking to own their home through alternative methods of homeownership. The bill simplifies and clarifies the law relating to vendor term contracts and brings rent-to-buy contracts under the cover of the Residential Tenancies Act. This is a very sensible move.
Bringing rent-to-buy contracts under existing tenancy legislation will ensure that consumers using rent-to-buy arrangements are afforded simply the same protections that other residential tenants are afforded -- for example, the right to have repairs carried out, rights in relation to when owners may enter a property, and protection against unfair rent increases. These are obviously sensible moves. People in those rent-to-buy arrangements need the same protections that other residential renters are afforded by the residential tenancy laws in this state. I commend the Minister for Consumer Affairs for taking this action and protecting the many consumers who are in this situation.
In summary, this legislation makes some very important reforms to consumer credit legislation in this state by bringing into effect an enhanced registration scheme to cover all credit providers. It provides for enhanced dispute resolution mechanisms which will mean that disputes are better able to solved.
It will improve the circumstances of consumers in this state, and I commend the bill to the house.
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