LETTER TO THE TREASURER
Dear Mr Treasurer,
Appearing to give evidence at the Royal Commission was scary. I wasn’t sure that my story was enough – when other peoples’ stories sounded worse than mine – or how important it was to tell. There were so many people in the courtroom and I was being recorded and was on television. I worried about whether I was speaking clearly enough, I was self-conscious about the way I looked and remember feeling that I didn’t want people looking at me, judging me. I felt intimidated.
“IT’S SO EASY TO GET INTO DEBT AND THEN SO HARD TO GET OUT.”
I hoped that by sharing my story with the Royal Commission, I would be able to help someone else, someone like me from getting into debt. I wanted to help others avoid being in the same position as I was in. It’s so easy to get into debt and then so hard to get out.
When there were some changes to consumer credit insurance after the Royal Commission, I felt happy. I felt glad that something was done. In a way now, it doesn’t feel like enough has been done with the other things which came out of the Royal Commission. I feel strongly about this as even though my story to the Royal Commission was solely about the junk insurance on my CBA credit card, this was only part of the bigger picture of debt that I was in at that time. For this reason, I am disappointed that not enough is being done to help people in debt.
In my experience of applying for a loan with the bank, there is something that happens in the conversation with the bank teller when you are in the room with them that is hard to explain. They make you feel like they are trying to help you by smiling, making you feel like you’re their friend and saying things like ‘maybe because you live with your father, he could let you not pay rent for a while so you can pay back the loan’? The teller makes you feel like they are helping you just to get me out of debt, but really you are being put in a position where you can easily fall back down. In that environment, when the teller is saying things in a nice or friendly way and that I can afford the loan they want to give me, I feel almost powerless to say no even though I know it would mean struggling. When they talk about what I spend on food, I say ‘yeah sure, I spend $100 on food’ when really, I don’t have a budget that I stick to with my family. I actually don’t have in my head what my shopping will cost me week to week.
A lot of it comes back to the way the teller speaks to you and looks at you like they care about you. It makes you feel like you need to answer in a certain way to keep them happy, like you feel pressured to do what they want you to do. If the laws that make the banks do checks are taken away, how much worse is that going to be? Even for someone who can afford a loan, they could go into the bank and they could feel pressured to take a loan double or triple what they had in their minds.
I want to ask you why make these reforms? Why is it beneficial to people like me? I think that changes should be made for the better not for the worse. Taking away these lending laws that make the bank ask questions and check your financial situation is not change for the better. In these COVID times, people may be more tempted to do whatever they can to get a loan as they are desperate for money. If the bank doesn’t do any checks, the person ends up in more debt than they can afford. It might be hard for the person to be rejected for a loan in that moment, but it will be a lot harder later down the track for that person when they can’t afford to pay off a huge debt.
“EVEN FOR SOMEONE WHO CAN AFFORD A LOAN, THEY COULD GO INTO THE BANK AND THEY COULD FEEL PRESSURED TO TAKE A LOAN DOUBLE OR TRIPLE WHAT THEY HAD IN THEIR MINDS.”
I would be very happy for Consumer Action to arrange a meeting with you to discuss this letter and why I think the changes that you are proposing are not a good idea for people like me.