Consumer Vulnerability – Insights and Regulatory Approaches

ACCC/AER Regulatory Conference

Consumers and COVID-19 Trends

Growing proportion of vulnerable groups take out high-risk-high-cost payday loans or consumer leases:

(Question: In the past month, have you taken any of the following actions to manage your household expenses? E.g. payday loans/consumer leases)

Summary of results

Slight trend growth in the proportion of Australian consumers taking out high-cost-high-risk payday loans/consumer leases from May – December

Among consumer subgroups, the trend has been much sharper – peaking in November:

9% of young people (18-34) – extrapolated this equates to more than half a million young people (535k)
7% of consumers living with disability
7% of renters
8% of CALD consumers (not shown)
3% of the Australian population

Growing proportion of vulnerable groups relying on credit/BNPL:

(Question: In the past month, have you taken any of the following actions to manage your household expenses?)

Summary of results

Slight trend growth in the proportion of Australian consumers relying on credit or BNPL for household expenses from May – December
Among consumer subgroups like renters, the trend has been much sharper, peaking in September: 37% of renters – compared with 26% of the Australian population

Consumers missing household bill payments on the rise:

(Question: Thinking of your (household bills), have you attempted any of the following in the last 4 weeks?)

Summary of results

Renters in particular struggled to make payments – trending up from 4% in May across the period peaking at 10% in Nov. Among renters:

22% of CALD community missed rental payment in November
17% of young people missed rental payment in November

Missed credit card, loan or BNPL repayments also steadily increased across the period. Again, a higher proportion of particular subgroups reported missing a credit payment: