Borrowers are increasingly falling prey to predatory payday lenders in a bid to meet debt obligations and or manage job losses.
A payday lender charges high interest rates over very short terms – usually to cover short-term consumer costs.
People are losing personal belongings such as TVs and even beds in a bid to repay payday loans, which charge up to 40 per cent interest, The Daily Telegraph reported today.
Principle solicitor of the NSW Consumer Credit Legal Centre Katherine Lane told the daily her workload had ballooned in recent months with her days full of discussions with distressed borrowers.
Ms Lane said she expected the problem to exacerbate as unemployment rises.
"We’re starting to see people who are unemployed. It only takes a few months until after you lose your job and you just can’t pay anything. Unemployment definitely leads to immediate financial distress. It gets very serious very quickly," she said.