Complaints against finance lenders have risen 30 percent since a new legislative crackdown was introduced in 2015, a dispute resolution service says.
The Credit Contracts and Consumer Finance Amendment Act makes lenders responsible for checking that the borrower and guarantor can make payments without them suffering substantial hardship.
Financial Services Complaints Limited chief executive Susan Taylor said complaints exceeded 1000 in 2016 and in the last half of the year, formal investigations by the firm rose by 37 percent on the same period - with 115 formal investigations opened.
She told Nine to Noon lenders were not doing thorough checks on borrowers.
"We're certainly starting to see more [complaints] where we have found that the lender has failed to meet that obligation to check that the customer can afford to repay the loan."
Ms Taylor said lenders should be looking at the income levels of customers at the time of granting a loan.
"Things like the stability of their income, whether they're still going to be able to meet their basic living expenses, as well as paying the loan," she said.
"That would probably involve, in many cases, looking back through at least the last three to six months' worth of bank statements for the customer, and perhaps doing some testing around what would happen if they weren't able to work for a period of time."
Lenders should also do checks on the suitability of loans for different people, she said.
"They've got to look at things like 'what's the purpose of the credit, is it perhaps for a one-off project, holiday expense, or is it to support a person's lifestyle.
"So for example if someone's seen a new credit card advertised and they go in and say they'd like to have this new credit card, the lender really ought to be making inquiries as to why they want that credit", she said.
She said the firm does not take complaints against banks, instead looking at non-bank lenders such as large finance companies, down to pay-day lenders.
"Where we're seeing the most complaints is in, for example, car finance, and those smaller personal loans up to about $5000, sometimes $10,000."
Ms Taylor said settling complaints early in the process was a win-win for both sides, but if a fault was found with the lender, compensation of up to $200,000 could be awarded to the complainant.