Centrepay is an online tool designed to help people on Centrelink pay for essentials like rent or bills through automatic deductions. But financial counsellors say the government service is instead being misused by some providers to exploit vulnerable Australians.
Usury is a crime in most places. This kind of transaction is just usury dressed up in the legal fiction of a rental.
I dunno, seems like a pretty big stretch to call equipment rental usury.
Not at all. A rent to own scheme is essentially legally identical to getting a seller or third party loan except for when title passes over to the consumer. In most other respects, especially in outcome, it's the same transaction dressed up specifically to avoid existing usury laws.
Even Rent4Keeps's own website calculates costs by comparing it to an installment loan for sale of goods. Doesn't get more transparent than that.
Interesting point. Though I have to wonder if making it illegal would just change their sales pitch to permanent rental, instead of rent to own. Ultimately, I feel the solution should lie more in educating consumers on financial literacy.
You can crack down on predatory lending and educate consumers. However, you'll never be able to educate the average consumer to be immune from sophisticated schemes simply because most people have other things to do on life and scammers devote a lot more time creating new scams than the average person can devote to learning about avoiding scams.
I'm not sure this qualifies as sophisticated - or even a scam, when everything is specified in plain text.
Except obviously it is because nothing on that website alerts the buyer to the possibility of paying 4x the price of the good as the total cost of transaction. 33% to 38% interest pa is already egregious enough as it is but 4x the base cost of the good is absurd and usurus.
Sounds like you just have an ideological bias against consumer regulation and are trying to fit the facts into your framework.
I'm in favor of consumer protection laws on aspects like quality, safety, etc. Things that are more nebulous and harder or impossible to check. But at some point, I do believe consumers have a responsibility as well. I understand that convenience stores charge me more than groceries, and it's fully on me if I shop there. In the same vein, if I buy a car that's going for 50% above market value, I'm not about to scream fraud, provided all information on costs and fees were given to me.
You can look at this from another perspective, which is the benefit of allowing a scam like this to continue vs. regulating it out of existence. The only upsides of allowing this to continue is the company perpetuating it making money and a smug lemmitor getting to feel superior to the poors and disabled people, so it's obvious that it shouldn't be allowed to exist.
It's amazing how many hexbears can't have a simple discussion without getting personal.
I agree this BS needs to stop. I disagree on HOW it should be stopped. The market (and people out to make a quick buck) will always move faster than the govt can respond. Especially when the victims involved here have shown absolute zero financial literacy. Rather than treating the symptoms, I believe there should be more focus on education.
Not really much of a discussion to be had. You just keep alleging facts without evidence. I don't think many people consider "Uh huh!" and "Nuh uh!" to be a form of discussion.
Wasn't referring to you here, you'll notice we had a reasonable conversation, even if we disagreed. You were the lone exception though.
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Then please demonstrate how easy it is for the consumer to check their total payments by posting a screenshot from that website that alerts the consumer to the possibility of paying 4x the cost of the device as the total cost of transaction.
If you're signing a contract with no idea how much you're going to be on the hook for, no amount of govt protection will keep you solvent.
The government could very much keep them solvent by, for example, mandating that consumer credit contracts must show tables of total payments including all fees and interest over time. Does the credit contract in question display such information? Onus is on you to provide proof if you're alleging that it does.
At no point did I allege that, so no.
Doubt. They'll find some other money trap to fall into in a week unless they're taught to actually be smarter about their finances.
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”The market” will do this anyway so we shouldn't do anything
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I certainly feel smarter in comparison to you. I've been advocating education the entire thread, and you're claiming that I just want the status quo.
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”Poor people are poor because of their inferior nature” Fuck off.
You could do with some lessons in reading comprehension.
"Poor people are poor because they've never had the chance to learn how to manage money, and I suggest teaching them."
Sure, poor people are poor because there's one specific piece of magical knowledge that they were never taught. Nothing to do with structural socioeconomic forces that keep people poor so that their labor can be more cheaply exploited.
How do socioeconomic forces have ANYTHING to do with the original topic at hand?
What do the root causes of poverty have to do with why people are poor? Damn, I guess we'll never know.
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That's just the same thing I wrote, basically. You're still saying it's their own fault that poor people are poor, except with an extra veneer of condescension.
Why do I always end up reading so deeply into these threads started by fucking ghouls who seriously believe poor people are poor because they're just too stupid to understand how money works? I should have backed off when I saw how deep this goes, but no, I must hate myself, because here I am, having just read your ridiculous comment how some sort of nebulous "education" will solve poverty somehow. Fuck off until you learn some damn empathy. I hope you end up neck deep in debt through no fault of your own.
I didn't claim it would solve poverty, I claimed it was the better route to dealing with scams like this. But sure, have a lovely day cursing everybody you meet who you disagree with.
You have been consistently been alleging that the woman in question could have easily checked the total cost of her payments, which you have just declined to provide proof for. I will take this as a concession from you on this point and move on.
This is an unfalsifiable counterfactual and I will dismiss it without further comment.
Yes? When faced with a 'deal' where you know the regular installment payment and the length of said debt, how difficult is it to figure out how much you need to pay by the end of it? Especially when everybody has a calculator in their pockets at every waking moment. If the answer is 'too difficult', I'm taking that as more reason for the education approach.
And you know that no information was deliberately obfuscated or hidden by the vendor? The vendor currently being sued by regulators for operating a business model "designed to avoid consumer protections for financially vulnerable consumers."?
Curious as to how you know this information. Do you have a copy of the court filings? Please feel free to share if you do.
You keep putting words in my mouth. Please share where I said anything like that.
Actually I'll do one better. While you were deflecting, I found the court filings.
Not shockingly, one of the main causes of action against the defendant is that they are dressing up a credit contract as a lease agreement to avoid interest rate caps (Section 3.2) and disclosure requirements (Section 3.3) which you'll notice is exactly what I was talking about from the get go.
Damingly:
Let's see you use that calculator in your pocket to determine if you're getting a reasonable deal without being told the original price of the goods, the interest rate, and how the interest was calculated.
Damn sure is strange they stopped responding after this comment
(They got banned)
That's the happy ending.