Outback loan shark strikes gold in indigenous welfare payments – from article by Paige Taylor in The Australian January 15, 2010 12:00AM

PROSPECTOR Sam Tomarchio has struck a new kind of gold in outback Western Australia by taking control of Aboriginal Centrelink payments and creating a lucrative, one-man bank.

He holds the debit cards and personal identification numbers for hundreds of welfare-dependent Aborigines across central Australia from Kalgoorlie to Alice Springs, often lending between $3000 and $5000 a day at an interest rate of 33 per cent, sometimes more.

“The thing you need to understand about these people is that, unlike you and I, they don’t do anything for their money and they have no respect for it,” he said when questioned by The Australian. There is no law to stop what Mr Tomarchio is doing but he has upset local elders.

His other business – renting chalets to miners and public servants – has become a sideline as he now spends seven hours a day dealing with the broke Aborigines who often wait in the shade under his carport for money. He knows the intimate details of their lives, including the days each month they receive money from Centrelink; this is especially important so he knows when to crank up his EFTPOS machine and get
back the money he is owed – plus interest. Mr Tomarchio says he gives his clients a portion of their Centrelink payments to live on, and the amount is negotiated depending on their needs. Living on a fraction of their centrelink p[ayments means they return to borrow yet more money from him before their existing loans are paid off.

For example, one woman’s debt to Mr Tomarchio blew out from $990 to $1290 when he lent her $200 – at an interest rate of
50 per cent.

Damian McLean, the shire president of the Ngaanyatjarraku lands to the north, where so many of Mr Tomarchio’s clients live, is leading a campaign to shut him down. So far, he has succeeded in encouraging more than 100 Aborigines to cancel their bank cards and default on their loans, which are now the subject of a Department of Consumer Protection investigation because Mr Tomarchio is not a licensed credit
provider.