Adams Paul: Credit Contracts and Consumer Finance Bill — In Committee 
Adams Paul: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8724] 
PAUL ADAMS (United Future) 
: 
 Just before I begin on Part 4 I ask to be given the liberty to cover a couple of points that Lindsay Tisch mentioned under the last part. On this whole bill we are dealing with financiers who are people in the business of selling money. As I said in debating the first part this is where I think we sometimes need to educate the public and that is part of what this bill is attempting to do. 
For example the member mentioned leases. Whoever is leasing a car is just selling money. The residual value of a vehicle establishes the price the lease company will receive for it at the end of its contract. That takes out a lot of risk for the company because it knows the price it will get for that car instead of having to take the risk of getting what the market may pay in 3 years’ time. There is a huge difference between repayment amounts and the cost of a contract. 
As I touched on in the earlier debate if the sum of $10000 was borrowed on a house the total cost with 17 years remaining on the mortgage was $80884 whereas a hire purchase agreement taken out for 3 years cost an extra $375 per month and the total interest to be paid was $3450. Those are huge amounts and I would like to see the public educated further on what those sorts of transactions actually cost them. 
I have a Supplementary Order Paper on Part 4 relating to buy-back schemes. I think that a majority in the Committee would agree that those schemes have been a disaster for people who have had their houses taken away from them through virtually no choice of their own because they have not had information or they have been deceived. Unfortunately we are also aware that a lot of cases involve family members or people who are very close to the families concerned. 
But my comments really are with regard to Part 4 and specifically toclause 77(1A) which deals with offences. I intend to move a Supplementary Order Paper to amend this clause. As it currently reads a conviction for the offence of breaching clause 58E could bring a term of imprisonment of a period not exceeding 3 months. Given the weight of the offence I argue that this penalty provision is totally inadequate. I therefore propose an amendment that the term of imprisonment be increased to a term not exceeding 1 year. 
My amendment is based on the reasoning of consistency under the law. When one considers that the penalty for a similar offence relating to the fraudulent procurement of title such as a breach of section 225(1) of the Land Transfer Act is imprisonment for a term not exceeding 3 years the present penalty provision in clause 77(1A) is clearly deficient and incompatible. 
Secondly the need for a more stringent penalty is further underscored when one compares it to the penalty for an offence of arguably less weight and when one considers that the penalty for theft of an object not exceeding the value of $100 is the same as the penalty for someone convicted of a fraudulent title grab. That is patently disproportionate and I hope the House agrees undoubtedly that the penalty needs strengthening. 
The financial and emotional consequences for the consumer after being ripped off by a buy-back scheme swindler can be extremely harmful and long term. This bill needs a punishment to fit the crime. The amendment I put forward in my Supplementary Order Paper meets this need and provides a greater deterrent for those contemplating this devious and malicious crime. I ask the other parties to support my Supplementary Order Paper.