Protecting the Most Vulnerable in Consumer Credit Transactions |
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Authors: | Therese Wilson Nicola Howell Genevieve Sheehan |
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Institution: | (1) Griffith Law School, 170 Kessels Road, Nathan, Queensland, 4111, Australia;(2) Law School, Queensland University of Technology, 2 George St, Brisbane, Queensland, 4000, Australia;(3) Brotherhood of St Laurence, 67 Brunswick Street, Fitzroy, Victoria, 3065, Australia |
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Abstract: | There are two key ways in which the Australian Uniform Consumer Credit Code seeks to protect consumers in relation to consumer
credit transactions. The first is by means of disclosure regulation where information is required to be disclosed to the consumer
before the credit contract is entered into and the second is by way of “safety net” provisions, where contracts can be varied
or set aside in the event of hardship, a finding that the transaction was unjust, or a finding of unconscionable fees or charges.
This article explores the limitations of both of these means of protection, particularly in the case of vulnerable, low-income
consumers. In order to highlight the inadequacies of these forms of consumer protection and the need for regulatory reform,
we draw on interviews conducted with 30 low-income consumers who had recently signed a credit contract, focusing on their
understanding of information disclosed in the contract, as well as their responses to hypothetical unfair terms and their
understanding of their rights, for example in the event of an unjust transaction. These interviews were conducted as part
of a joint research project between Brotherhood of St Laurence and Griffith University’s Centre for Credit and Consumer Law,
funded by Consumer Affairs Victoria.
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Keywords: | Consumer credit Disclosure regulation Safety net provisions Low-income consumers |
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