ATO payment scheme riles consumer watchdog

Monday 20 July 2009

Article by Mozo

A new initiative from the Australian Tax Office (ATO) which lets people pay off their outstanding tax obligations via credit card has come under fire from consumer groups.

The new trial scheme, which will be evaluated next month after being introduced earlier this year, has been criticised by Choice and other watchdogs on the grounds that the ATO should not be encouraging people to add to their debt burden.

Speaking to the Courier Mail, Carmel Franklin, a spokesperson for Care Financial Counselling Services, said that people are already being put under pressure and need "all the help they can get" in getting their debts in order.

"That means suspending interest payments, not directing them to credit cards that charge 20 per cent a year," she exclaimed.

Credit card companies themselves have also been on the firing line in recent months because of their failure to cut headline interest rates in line with the record reductions to the Reserve Bank’s cash rate.

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