Impose interest rate cap on loan sharks: consumer advocate

A law change intended to protect vulnerable borrowers does not go far enough, according to an Australian leading advocate for consumer finance rights.

The Credit Contracts Legislation Amendment bill is part of the government's plan to crack down on loan sharks, who can apply interest rates of up to 500 per cent or more a year. It puts a limit on the total interest and fees on high cost loans to 100 per cent of the original loan principal - but it stops short of imposing an interest rate cap.

Gerard Brody is the CEO of Consumer Action which is the principal advocate for consumer finance rights in Australia.