Advocates also detail flaws in automated debit system that prevented clients stopping their deductions
Centrepay is an automated debit system designed to give businesses early access to a person’s welfare money to ensure they can afford essential services such as rent and healthcare.Centrepay is an automated debit system designed to give businesses early access to a person’s welfare money to ensure they can afford essential services such as rent and healthcare.
The corporate regulator is investigating dozens of companies. At least four it has already penalised remain on the system. “When the legal service advocated on behalf of their client to end these Centrepay arrangements, the payee business refused to acknowledge they had received the money after the client’s relative’s death,” the EJA said. “The legal service engaged in lengthy advocacy including letters of demand to the business. It was months until the business agreed to refund the overpayment.”
Lawyers at a First Nations women’s legal service told the EJA their clients were told the deductions would continue indefinitely.“The clients couldn’t check, change or stop these arrangements – they didn’t have the phone, access to phone credit to call and wait on hold to check their Centrepay,” the EJA said. “These arrangements led their clients to not having enough money to afford essentials.”
“Businesses continue to engage in predatory practices and exploitation using Centrepay,” the EJA warned. “This is particularly prolific in regional, rural and remote communities where ‘rent to buy’ arrangements, often in breach of consumer credit laws, are still the norm rather than the exception.
“Historically the system has been used by some providers to extract millions of dollars in profits for poor value services that people could ill afford,” the FRLC said. “This is a privilege that should not be given lightly. There must also be repercussions and mechanisms for enforcement when businesses breach these requirements and objectives, and the capacity to take quick and decisive action to prevent further harm and create a public deterrent.
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