UQ law academic, Paul O’Shea’s, research into disclosure statements was incorporated into the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011.
UQ law academic, Paul O’Shea’s, research into disclosure statements was incorporated into the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011.
5 July 2011

Research conducted by The University of Queensland’s (UQ) TC Beirne School of Law was used to support new consumer credit protection legislation passed by the Senate yesterday.

The legislation will introduce practical measures to prevent consumers becoming overburdened by debt, including introducing simplified disclosure statements that clearly detail the real cost of debt repayments.

UQ law academic, Paul O’Shea’s, research into disclosure statements was incorporated into the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011 to assist consumers in making more informed choices about mortgage products and credit card contracts.

The legislation provides for simplified disclosure statements detailing the real cost of debt repayments, for example, the total interest payable over time if consumers make only the minimum monthly installments to pay off mortgage and credit card balances.

Mr O’Shea said he was delighted that his research is being used to support regulation, which seeks to introduce practical measures to prevent consumers becoming overburdened by debt.

“It’s exciting that the Government, in an effort to produce evidence based regulation, is using research conducted by UQ’s law school as part of the process of reforming consumer credit in ways which will be relevant for many years to come,” he said.

Federal Member for Fraser, Dr Andrew Leigh, mentioned Mr O’Shea’s report in an address to Parliament as he spoke in support of proposed credit protection reforms designed to assist consumers in making more informed choices about mortgage products and credit card contracts.

Dr Leigh spoke of the importance of helping consumers to understand what it is they are signing up for to help them avoid financial stress caused by debt.

He said that research by Mr O’Shea had taken an innovative approach to assess the impact of simplified disclosure statements.

“The research provides empirical support for what many of us would have intuitively thought – better disclosure improves customer knowledge,” he said.

Entitled ‘Simplification of Disclosure Regulation for the Consumer Credit Code,’ the research project was commissioned on behalf of the Standing Committee of Officials of Consumer Affairs and published in April 2010.

The two-year project was the most intensive and comprehensive experimental research of its kind carried out in Australia, and larger in scale and detail to any similar research into consumer credit disclosure conducted in Europe. It used consumer comprehension tests, focus groups and cognitive interviews to develop meaningful Consumer Credit Code pre-contractual disclosure statements.

The project’s findings were incorporated into a Commonwealth Treasury white paper on consumer credit reform and used in a call for response on the issue to industry and consumer groups.

It is also being used by researchers at the University of Bristol who are conducting similar work with the UK financial services industry.

Media: Mr Paul O’Shea, TC Beirne School of Law, 07 336 56614, p.oshea@law.uq.edu.au or Melissa Reynolds, School of Law Marketing, 07 3365 2523, m.reynolds@law.uq.edu.au