ASIC has today released a report, about the prevalence and impact of book up in Australia. Book up is an informal form of credit allowing consumers to obtain goods or services immediately, and pay for them later. Book up is most commonly used by Indigenous consumers, particularly those living in regional and remote communities, to purchase everyday essentials in general stores.
The report, Book up in Indigenous communities in Australia: A national overview (REP 451) reflects research undertaken by Dr Heron Loban of Griffith University, which included surveying financial counsellors and other stakeholders who work with Indigenous consumers across Australia.
The report found book up is used frequently in some communities, and can be a sought after, and sometimes useful service, particularly when there are no credit alternatives available and consumers require additional funds for unexpected events. However, Indigenous communities are heavily reliant on the integrity of a book up provider to ensure that book up is provided in an appropriate matter.
The research demonstrates that some policies and procedures adopted by book up providers, can be problematic, and in some cases might be unconscionable. These include:
- keeping customers' debit cards and PINs to withdraw money at the provider's discretion
- draining customers' accounts on their payday
- failing to agree on book up terms, or to provide receipts or itemised accounts
- failing to keep accurate records
- allowing other people to use an individual customer's book up account without consent.
The worst of this conduct results in customers losing control of their debit cards, PINs, and funds as the provider drains money from the customer’s accounts at the provider’s own discretion (and at times without reference to an actual debt).
ASIC Deputy Chair Peter Kell said, 'ASIC has worked with many book up providers across Australia to improve their service provision. We work to help ensure customers understand how book up works and continue to have access to their own money when they engage in this type of credit.'
'ASIC will continue its work in remote and regional Australia to ensure consumers are provided with appropriate services – where a service is required it should be provided in a fair and transparent way, not to the detriment of consumers.'
'Where a book up provider chooses to engage in conduct that appears to be unconscionable, ASIC will take enforcement or other appropriate regulatory action.'
Background
Depending on how book up is offered, the transactions may be regulated in different ways, including under the Australian Securities and Investments Act 2001, the National Consumer Credit Protection Act 2009 and the ePayments Code 2011.
ASIC has put out Dealing with book up: key facts, for community advocates working in Indigenous communities to promote and encourage good book up practices. ASIC continues to work with book up providers to ensure the processes and practices are not harmful to consumer's using the service.
Consumers may use book up where there is a real, or perhaps apparent, lack of access to alternative low cost credit options. For some consumers (and subject to eligibility requirements and availability), alternatives could include Centrelink lump sum advances and No Interest Loan Schemes.
In 2014, ASIC commenced civil penalty proceedings in the Federal Court against Mr Lindsay Kobelt of Nobby's General Mintabie Store, for the provision of book up to Indigenous consumers resident of the Anangu Pitjantjatjara Yankunytjatjara Lands in remote South Australia. (refer: 14-119MR).
ASIC’s Indigenous Outreach Program (IOP) was established in 2009 in response to concerns about Indigenous consumers in relation to various financial services issues. The IOP is a national team and undertakes outreach trips to urban, rural and remote Indigenous communities to raise awareness about money matters and to take complaints. They also work with industry and consumer advocates to increase the financial knowledge of, and improve, the services provided to Indigenous Australians.
ASIC's MoneySmart website also has a dedicated section with information on managing money for Aboriginal and Torres Strait Islander people.