Commission spotlights predatory and deceptive practices
In July, the federal government heard evidence for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that focused specifically on how Aboriginal and Torres Strait Islanders have been targeted or ignored by financial services. Financial services include banks and superannuation companies, as well as pay-day lenders and insurance companies.
There were testimonies from financial counsellors and service providers who spoke about how living in remote communities can contribute difficulties in getting financial help. The physical distance from a community to the nearest bank branch, bad weather, no car, or family responsibilities can all contribute to a customer’s difficulties in getting help from their bank.
But what about for Indigenous Australians who are living in urban areas such as Redfern and Waterloo? It was a shock to see how Aboriginal and Torres Strait Islander people have been targeted with “predatory products” like some funeral or life insurance products that are designed to exploit the fears of having money trouble in the future. One company advertised its “Aboriginal funeral funds”, despite not actually being Aboriginal-owned or managed. This company also appeared to target young people aged 18-25, and some members were continuing to pay premiums once they had reached the settlement amount. This results in customers potentially paying for years’ worth of premiums for a product they may end up not being able to use.
Pay-day lenders and furniture or appliance rental companies can be appealing if the applicant doesn’t have a good credit history or has insufficient income to qualify for a loan. But these services often attract high interest on cash advances or can involve confusing jargon about who owns the appliance at the end of the rental period. Unless it’s a rent-to-buy scheme, you may end up paying for a couch on a two-year contract but not actually own it at the end of the term.
There are options that can provide help during financial struggle. No Interest Loan Schemes (NILS) can be accessed by people on lower incomes to buy essential household goods or pay for medical procedures. Low-interest loans are also available for people who may otherwise have difficulty getting a loan from a bank.
There are financial and legal services that are specifically run for and by Indigenous Australians. The Redfern Legal Centre has a credit and debt service that can provide advice to Aboriginal and Torres Strait Islander people about financial issues. You can call 9698 7277 to make a time to see a solicitor, or drop in 9am-6pm Monday to Thursday and 9am-5pm on Fridays.
The Financial Rights Legal Centre also has a free telephone service that can provide advice about credit, debt, banking and insurance. Phone 1800 007 007 9.30am-4.30pm, Monday to Friday.