Harmful Financial Products Project


Harmful financial products pose a significant threat to the wellbeing of Australian consumers. In recent years, Australia has witnessed the emergence and proliferation of non-mainstream, or ‘fringe’ financial products.  According to consumer advocates, providers of some of these products generate substantial profits by taking advantage of their customers, charging above-market prices, high interest rates and unconventional, ad hoc fees. There is evidence that such products serve to entrench the disadvantage of consumers who are already marginalised.

Grant information

Type of grant: Australian Research Council Linkage Grant


Associate Professor Paul Ali (Chief Investigator)
Paul Ali is an Associate Professor at the Melbourne Law School. For further information, please refer to Paul's profile on Our Staff webpage.

Professor Ian Ramsay (Chief Investigator)
Ian Ramsay is the Harold Ford Professor of Commercial Law at the Melbourne Law School, where he is also Director of the Centre for Corporate Law. For further information, please refer to Ian's profile on Our Staff webpage.

Lucinda O'Brien (Research Fellow)
Lucinda O'Brien is a Research Fellow at the Melbourne Law School. For further information, please refer to Lucinda's profile on Our Staff webpage.

Partner Organisations

Consumer Action Law Centre

Financial Counselling Australia Incorporated

Good Shepherd Australia New Zealand

Mallee Family Care


Aims and objectives

This research will fill a significant gap in Australian scholars’ and policymakers’ knowledge of harmful financial products, their impact on the lives of Australian consumers and their role in perpetuating financial exclusion.  It will combine a comprehensive legal analysis with a rigorous empirical study of these products and their impact.

To achieve these aims, the project will:

  • Investigate, document and analyse the impact of harmful financial products, with a focus on demographic groups that experience above-average rates of financial exclusion (such as women and young people) and particularly marginalised and disadvantaged populations (including newly arrived migrants and rural and remote indigenous communities);
  • Conduct surveys, interviews and focus groups involving consumers, providers of fringe financial products, consumer solicitors, financial counsellors, social workers, youth workers and other advocates. These surveys, interviews and focus groups will examine the design and marketing of harmful financial products and explore their financial, social and other impacts upon consumers;
  • Consider the extent to which these products work in combination to create or perpetuate financial exclusion;
  • Analyse the ways in which these products are regulated and the ways in which they adapt to law reform; evaluate the effectiveness of current laws in managing the risks associated with these products; and, if appropriate, develop law reform proposals to address deficiencies in these laws;
  • Publish the research findings and any resulting law reform proposals in scholarly journals and freely available online research papers; and
  • Promote public awareness of these products and the risks they represent through engagement with the media, a series of public seminars and the production of accessible educational materials.

Status of the project

The project commenced in 2018. In 2018, the research team carried out a detailed literature review and consulted with the partner organisations regarding the project’s scope, methodology and key focus areas.

In 2019, the research team designed a major online survey exploring consumers’ experiences with three financial products: payday loans (including online loans), buy-now-pay-later services (such as Afterpay) and pawn loans. The research team obtained ethics approval for the survey and launched it in late 2019.

In 2020, the research team carried out extensive statistical analysis of the data gathered in the online survey. It also conducted focus groups with consumer solicitors, financial counsellors and other consumer advocates. These focus groups explored the impact of debt collection on consumers. They also investigated point-of-sale credit and its impact on specific groups such as recently arrived migrants and women affected by family violence.

In 2021, the research team published articles on point-of-sale credit and debt collection, drawing on the focus group data. It also published a major study of the funeral insurance industry.  So far, in 2022, the research team has published an article evaluating the Australian Securities and Investments Commission’s new Product Intervention Power, focussing on ASIC’s use of the power in relation to short term credit products.

Further publications are currently in development, including several articles drawing on the survey data.


Lucinda O’Brien, Ian Ramsay and Paul Ali, ‘Australia’s Product Intervention Power and Protection From Consumer Harm: An Evaluation’ (2022) 29(1) Competition and Consumer Law Journal 32-64

Lucinda O’Brien, Peng Guo, Ian Ramsay and Paul Ali, ‘Funeral Insurance and Consumer Harm: Recent Reforms in Australia’, Oxford Business Law Blog (online), 6 April 2022

Lucinda O'Brien,Peng Guo, Ian Ramsay and Paul Ali, ‘Putting a Price on Peace of Mind: Funeral Insurance and Consumer Harm’ (2021) 48(2) University of Western Australia Law Review 641-89

Lucinda O’Brien, Ian Ramsay, Paul Ali and Mihika Upadhyaya, ‘Consumer Credit Issued at the Point of Sale: New Australian Study’, Oxford Business Law Blog (online), 29 October 2021

Lucinda O’Brien, Vivien Chen, Ian Ramsay and Paul Ali, ‘Debt Collection Practices and Women’s Safety’, The Power to Persuade (online), 29 September 2021

Lucinda O’Brien, Vivien Chen, Ian Ramsay and Paul Ali, ‘An Impending “Avalanche”: Debt Collection and Consumer Harm after COVID-19’ (2021) 49(2) Australian Business Law Review 84-115

Lucinda O’Brien, Ian Ramsay, Paul Ali and Mihika Upadhyaya, ‘One-Stop Shop: Consumer Credit Issued at the Point of Sale’ (2021) 32(1) Journal of Banking and Finance Law and Practice 3-25

Vivien Chen, ‘Online Payday Lenders: Trusted Friends or Debt Traps?’ (2020) 43(2) University of New South Wales Law Journal 674-706

Vivien Chen, ‘Payday Lenders: Trusted Friends or Debt Traps?’ Monash Impact (online), 15 October 2019

Paul Ali, Steve Kourabas, Cosima McRae and Ian Ramsay, ‘Consumer Leases and Indigenous Consumers’ (2017) 20.1 Australian Indigenous Law Review 154-177.


Ian Ramsay, Paul Ali and Lucinda O’Brien, Submission to the Senate Standing Committee on Economics Inquiry Into Credit and Financial Services Targeted at Australians at Risk of Financial Hardship, 9 November 2018

Other references

Paul Ali, Cosima McRae, Ian Ramsay and TJ Saw, ‘Consumer Leases and Consumer Protection: Regulatory Arbitrage and Consumer Harm’ (2013) 41.5 Australian Business Law Review 240

Australian Securities and Investments Commission, Report No 465: Paying to Get Out of Debt: The Promise of Debt Management Firms (21 January 2016)

Stephanie Chalmers and Michael Janda, ‘Banking Royal Commission Hears Funeral Plan Targeted Aboriginal Customers’, ABC News (online), 4 July 2018

David Chau, ‘Afterpay: Consumer advocates fear “instant approvals” will cause serious financial hardship’, ABC News (online), 27 September 2017

Kavita Datta, Migrants and Their Money: Surviving Financial Exclusion (Policy, 2012)

Financial Conduct Authority (UK), Understanding the Financial Lives of UK Adults: Findings from the FCA’s Financial Lives Survey 2017 (October 2017)

Good Shepherd Microfinance and Digital Finance Analytics, Women and Payday Lending: An Update (2018)

Nicola Howell and Therese Wilson, ‘Access to Consumer Credit: The Problem of Financial Exclusion in Australia and the Current Regulatory Framework’ (2005) 5 Macquarie Law Journal 125

Howard Karger, Shortchanged: Life and Debt in the Fringe Economy (Berrett-Koehler, 2005)


For more information about the project, please contact Lucinda O’Brien on (03) 8344 7096 or by email.