New touch screen kiosks that allow Australians to apply for an almost instant loan are popping up in shopping centers in so called ‘battler’ regions including Minto in Sydney’s south-west, Illawarra and the Central Coast.
The ATM-like CashnGo kiosk lets a customer enter their personal details including bank and debit card information, and can then receive a loan of up to $2000 within just hours.
However, experts warn that so-called ‘payday loans’ charge high interest rates and also have multiple fees which may catch out people already struggling to pay their bills.
CashnGo charges customers an establishment fee of 20% of the amount they borrow, and a monthly fee of 4 per cent of the same amount.
The total fees repayable cannot exceed the original loan, so for example a customer taking out a $200 loan would have to repay a maximum of $400.
The company’s website advertises that a one-month loan for $600 would attract $144 in fees, a two-month loan of $600 would cost $168 in fees while a three-month loan of $600 would cost $192 in fees.
NSW Labor yesterday introduced a notice of a Bill to outlaw the cash machines, labeling them “insidious”.
Labor innovation and better regulation spokeswoman Yasmin Catley said:
“These predacious instant cash loan machines and payday loans avoid national credit laws and are popping up in many communities across NSW,”
“These machines cannot take into account the financial circumstances of customers, and lock people into loans with exorbitant fees.”
But a CashnGo spokesman denied the claims, saying:
“It’s absolutely absurd … I don’t know how they come up with these accusations or conclusions. (The machines) are not in low, low socio-economic areas, they are in areas where we identified a need for these types of loans. You wouldn’t put a loan machine out — or even Cash Converters or Money3 or any other competitor — wouldn’t put a store out in Rose Bay.”