In July 2018, ASIC released a consultation paper regarding their proposal for an amended prescribed period for repayment of credit limits to be used when assessing whether a credit card contract or credit limit increase is unsuitable. It follows the 2015 Senate Inquiry into credit card interest rates and recent reforms to the regulation of credit card lending which are intended to better protect all consumers when dealing with credit providers.
RLC's credit and debt team regularly assists vulnerable and disadvantaged people who fall victim to irresponsible lending practices. Our submission focuses on common issues arising from our extensive experience of consumer credit law issues.
While RLC generally supports this proposal, we submit that low income consumers will be better protected with a two-year repayment period rather than the proposed three-year prescribed period. RLC’s recommendation is intended to strike a better balance between preventing consumers from being in unsuitable credit card contracts and ensuring that consumers continue to have reasonable access to credit.
