Car debts are the biggest debts of the clients of St Vincent de Paul Otahuhu’s budgeting service, which is called “Building Financial Capability”.
Financial mentor Alanah Baker said irresponsible lenders are all over south Auckland, taking advantage of Pacific people’s cultures.
“People would be appalled if they knew the way the lenders around here operate, because they know what the social pressures are on the Pacifica people, and they take advantage of that,” she said. “Some of [our clients] are paying for cars that they haven’t had for years. It’s an awful, awful scenario for them.”
Ms Baker said Building Financial Capability (BFC) is funded by the Ministry of Social Development to help cash-strapped people manage their finances better. They are situated on the second floor of the SVdP Otahuhu office.
“We had an increase in funding because of the Covid lockdown impact on people. They [clients] come to us and we help them with managing the income that they have. We try [to] keep their expenses reduced, increase their income, but also teach them about the irresponsible lenders that exist in our area,” she said.
With the reforms that came in the middle of last year, Ms Baker said they now have the power to investigate irresponsible lenders and car dealers.
If the lenders or car dealers are found not to have kept within the letter of the law, they (BFC) can contest the contract on behalf of their clients.
“What we’re seeing now is that some of them, or unscrupulous operators, are either closing or they are just reinventing themselves, rather than call themselves payday lenders or high-cost lenders,” she said.
Apart from dealing with irregular loans, BFC helps people who are in boarding homes, and those who live in houses that have tenancy issues, as well as those who have mental health issues or drug dependencies.
“We work with these people because they are still our people,” Ms Baker said. For some of their clients, just getting an ID is hard. Others do not have bank accounts.
“Somebody else gets their benefit and they don’t always give that benefit to the person,” she said.
She said they had one family with four children. The father stopped working due to health reasons. The mother had worked for 16 years, but they did not receive family tax credits.
“They hadn’t had a cent of family tax credits at all in those 16 years while she was working, so she got a $7000 refund from the IRD. So, that’s brilliant when that happens,” she said.
Ms Baker said the clients they have are usually referred to them by Money Talks, which is a financial helpline, as well as from the Citizens Advice Bureau. They also get a lot of word-of-mouth referral in the Pacifica community.
She said the older members of the community, particularly, feel safer and more anonymous and not judged when they deal with SVdP.
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