Adjudication No. 1342  (adjudicated December 2006)

The Australian Press Council has upheld in part a complaint against The Courier-Mail, Brisbane, arising from a series of articles campaigning for increased legislative protection for short-term, high-risk borrowers.

The newspaper's campaign was stimulated by the Queensland Government's failure over eight years to act on promises to cap interest rates on what are known colloquially as "pay-day" loans. The campaign has resulted in a government promise to release a discussion paper early in 2007.

The newspaper published a series of articles beginning in June outlining the situation that allowed Queensland operators to charge rates that, if projected over a year, could result in borrowers paying from 250 - 1300% in interest. In subsequent articles, a potential annualised interest rate of 1600% was used, based on a claim by a consumer advocate.

The first article in the series was balanced by quotes from a spokesman for loan operators, who argued that the majority of loans were relatively small and short-term. Therefore, they said, the projection of rates over 12 months was unrealistic: the amount of interest actually paid by borrowers was small, and high rates were needed to meet operator costs. In states where interest rates were capped, operators were allowed to charge establishment fees that covered upfront costs.

The complainant, a software supplier to the industry, said that there was a complete lack of balance in the series of articles and, in particular, that follow-up articles in the series continued to use the 1600% annualised figure, unproven, also making no attempt to provide the balancing analysis the industry had provided.

In the Council's view, The Courier-Mail's continued use of the hypothetical figure as if there were no challenge did not meet the newspaper's obligation to provide balance. To that extent, the complaint is upheld.

Note: The Council rejected an appeal from the newspaper on this finding at its meeting in early February.

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