Inside this issue:

• Notes & Notices
  
• The Mental Health Implications of Financial Stress
  Wayne Warburton
  
• Privacy Commissioner Case Notes
  Richard Brading
  
• Who is this man?
  
• The Law Matters:
  
• Travelling Overseas When Bankrupt
  Richard Brading
  
• National Bankruptcy Update
  Anna Mandoki
  
• AFCCRA Update
  Jan Pentland
  
• Pro Bono: For The Public Good
  Lisa Turner
  
• Round-Up
  
• News, views and information about financial counselling around Australia
  
• In the Media
  Snippets of interest and information found in the media        

   Notes & notices

National Australia Bank Contact Details

Sharkwatch has received word from Lynda Johns (financial counsellor, NSW; Secretary FCAN) that some of the details for the National Australia Bank Customer Feedback and Resolutions section on the BFSO website are currently outdated. We expect that these will be updated by the time this edition of Sharkwatch goes to press, but, for the record, the details are as follows:

The phone number is still the same: 
1800 152 015,

The fax and the address are different:
Fax:  03 9322 7020

Address: 
National Australia Bank Customer Feedback and Resolutions
Reply Paid 
GPO Box 2870
Melbourne VIC  8060 

Information about Low Cost Bank Accounts

The Australian Bankers Association website has a fact sheet on ‘Fee Free and Low Cost Banking’ at http://www.bankers.asn.au/Default.aspx?ArticleID=585. There is a certain amount of pro-bank propaganda, as one would expect on this website, but there is also a lot of good factual information on what is available to low   income consumers. It is definitely worth a visit.

ITSA Practices and Policies Webpage

David Bergman, in his capacity as Acting Chief Executive and Inspector-General in Bankruptcy Insolvency and Trustee Service Australia, has released the following statement regarding the ITSA Policies and Practices web webpage (which can be found by going to http://www.itsa.gov.au/, selecting ‘About Us’ from the menu at the top of the page, and selecting ‘ITSA Practices and Policies’ from the drop down menu). This is an important new development because this page details the guidelines that ITSA uses when making decisions.

“It is with much pleasure that I announce the release of the new ITSA Practices and Policies webpage on the ITSA website.

The practice statements published on our website cover our various function and provide transparency and certainty for clients in understanding the basis on which we make decisions.

Generally, there are two types of document you will see on our website. The first encompasses Official Receiver Practice Statements, Debt Agreement Practice Statements, Official Trustee Practice Statements and Inspector-General Practice Statements - these explain our approach to making decisions and exercising the statutory powers of those offices. The second type is Inspector-General Practice Directions - these provide details of our expectations of trustees and debt agreement administrators and provide guidance about the Inspector-General's interpretation of the law as it will be applied in regulating these practitioner groups.

We will be monitoring these over time to make improvements, ensure they are up to date and address any new issues which emerge. I encourage you to read these documents and provide feedback to us on their content and usefulness.

David Bergman Acting Chief Executive and Inspector-General in Bankruptcy Insolvency and Trustee Service Australia (02) 6270 3401.”

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Wesley Community Legal Service gratefully acknowledge the sponsorship of LexisNexis, whose assistance has enabled our solicitors to have  access to the Butterworths Direct Online package.

   The Mental Health Implications of Financial Stress

Wayne Warburton
National Financial Counsellors Resource Service

Across Australia financial counsellors are seeing more and more clients with serious mental health issues, so it seems timely to examine the links between financial stress and mental health.

Currently there are a large number of factors with the potential to cause financial stress in Australia. Interest rates have risen, rental and housing costs are very high in many major capitals and in regional areas that have benefited from the minerals boom, petrol prices are very high (and continue to rise as the Australian dollar plummets), and basic commodities seem to become more expensive by the week, especially in regional and remote areas. Given the recent exponential increase in clients seeking financial counselling, it seems fair to  assume that more and more Australians are experiencing financial stress. Apart from being unpleasant for the person, financial stress has serious mental health implications.

Depression

I think the most common outcome of financial stress is depression. Over the past ten years Jennifer Gracie and I have spoken to a large number of financial counsellors across Australia about this, and almost all of them have reported that about half of their clients appear to suffer from severe depression, and that as many as 80% appear to be depressed to some extent. I cannot recall speaking to a financial counsellor whose experience had been different. If you compare these figures to the lifetime prevalence of 16.6% for clinical depression, and a further 2.5% for non-clinical depression1, it becomes apparent just how powerful a factor financial stresses might be in causing depressive illness.

Research shows that depression is linked with reduced life expectancy, increased physical and mental illness, suicide, poor job performance, relationship difficulties and increased drug and alcohol use. In this light, such large figures are very disturbing and emphasise the huge hidden cost of modern financial pressures.

One of the nastier features of severe depression is that it can negatively affect a number of normal brain functions. Short term memory may be reduced, and   depressed people tend to be slow and less productive, to be indecisive and uncertain, to make more mistakes, and to have reduced capacity for problem solving  generally. For the person struggling to make ends meet, or with problems repaying loans or credit cards, this makes financial problems even harder to sort out.

Financial counsellors need to be aware that many of their depressed clients literally may not have the capacity to solve their own problems or undertake complex tasks in order to do something about their situation. In this instance, the counsellor needs to step into the breach, offering enough help to overcome these depression-related difficulties, but also asking the client to undertake tasks that they are capable of successfully completing.

Financial counsellors also have a duty of care to depressed clients. If the financial counsellor is concerned about the client’s level of depression they should gently suggest that the person consider seeing their GP or seeking other professional assistance. If the counsellor believes that client may be suicidal,  action needs to be taken, and justification for the   action written up clearly in the case notes. This may involve calling a friend or relative and placing the client into their care, arranging for the client to be taken immediately to their GP, psychologist or psychiatrist, or calling a mental health crisis team to assess the situation. Suicide training courses (such as ASIST) are strongly recommended for all financial counsellors.

Anxiety

It is important to remember that depression increases anxiety levels, and that the normal response to anxiety is to avoid the thing that makes us anxious. We can all remember those clients who have turned up at our office with a box of unopened letters, and who have refused to answer the door or phone for fear of being confronted with the severity of their financial problems. Eventually, of course, the problems cannot be avoided. Court proceedings, a visit from the Sheriff, a garnishment of wages, or the repossession of a car or house are hard to ignore. Part of our job is to gently assist the client to face reality, and to do so in a way that offers hope rather than increases anxiety.

Of course, you don’t need to be depressed to be anxious. Financial stress by its nature increases anxiety in any case (i.e., by being stressful). In addition, many people have anxiety disorders such as Panic Disorder, Agoraphobia, Obsessive Compulsive Disorder (OCD), Social Anxiety Disorder, Post Traumatic Stress Disorder (PTSD), various phobias, or a pervasive Generalised Anxiety Disorder. For these people, financial stress will only increase their existing anxiety, and may become overwhelming. Those who are taking medication for their anxiety disorders may need to    increase the dosage during times of financial stress to reduce its negative impact, and it may be important for the financial counsellor to gently suggest to very anxious or stressed clients that they may want to consider seeing their GP about how they are feeling.

Psychosis

Episodes of psychosis involve the person experiencing disrupted thinking and such symptoms as hallucinations, paranoid delusions (e.g., the CIA are trying to kill me) or delusions of grandeur (e.g., God has specially chosen me to be the next Messiah), and usually result in hospitalisation and ongoing disruption to the person’s life.

About 17% of teenagers experience prodromal symptoms, which are the precursor to psychotic illness, and involve episodes of unusual thinking and strange perceptual experiences, that, while not psychotic, are a little unusual. About 3% of people have one or more psychotic episodes in their life, so the other 14% of people with a possible tendency toward psychotic illness never have a psychotic episode.

The cause of psychosis is a tendency toward psychosis coupled with a trigger. Triggers fall into two categories – drugs and stress.  Many first psychotic episodes are brought on using drugs such as marijuana, which has strong links with psychotic illness, amphetamines (such as speed), ecstasy, ice, and a range of other illegal and legal drugs. This is because psychosis is linked to an excess of the neurotransmitter dopamine. This excess causes brain activity to increase to the point that thinking becomes confused, the person may see, hear or feel things that are not really there, fears become      exaggerated, and the line between the person’s inner experience and outside reality becomes blurred. In a person with a tendency toward psychosis, drugs that increase dopamine can cause a dopamine excess that is great enough to trigger the person’s first psychotic episode. Once a person has had one psychotic episode, others are triggered much more easily.

The second cause is stress. It may be a severe stress such as being lost at sea or thrown into combat, but more often it is an accumulation of stress over time.  Ongoing financial problems are just the sort of stressor that could trigger a first psychotic episode, and are very likely to trigger a subsequent episode. Unfortunately, many people with psychotic illness have difficulty finding employment and live in grinding poverty, and thus experience financial stress regularly. This can only add to their mental health problems and may set up a cruel spiral of stress, psychosis, reduced capacity to work or manage money, more stress, more psychosis, worsening financial situation and so on.

A person with a tendency toward psychotic illness can avoid psychotic episodes altogether by avoiding stress and certain drugs, but the increasing pressures of modern life,  particularly in high school and the work place,  make this harder and harder to do. If you add to these pressures such things as housing stress, rental stress, and the rising cost of living, it seems that many facets of modern life in Australia may have the unwanted side-effect of triggering psychosis in many people who would not otherwise experience it. For this reason financial stress needs to be taken seriously by those with a family history of psychosis or those with early symptoms (if unsure, check out the fact sheets at the Mental Illness Fellowship Australia website.

Bipolar Disorder

Of all the mental illnesses, bipolar disorder has the greatest genetic component, so a family history of the illness is a very important indicator of whether a person is at a greater risk of having a first episode of mania (the critical symptom of severe bipolar disorder). Like psychosis, mania can be brought on by stress, and a percentage of those with severe bipolar disorder will experience psychosis as part of their manic episode, with stress being a significant trigger. Again, financial stress has significant potential as a trigger.

Bipolar disorder usually has an onset between in the late teenage years or the early twenties (although it mat start earlier or later in some people), and so, for people with a family history of the illness, this period is particularly critical in terms of reducing financial stress.

During a manic episode, whether there is psychosis or not, the bipolar person tends to behave recklessly, and may spend large amounts of money that they cannot afford. Again, the resulting financial problems may cause further stress, which increases the likelihood of a further episode, which increases the likelihood of more reckless spending, and so on. One task the financial counsellor can undertake is to help the person break this cycle by helping them to protect assets, and encouraging them to consider making a ‘living will’ that empowers a trusted friend to take action and seek help on their behalf should they start to see signs of mania or psychosis.

Schizophrenia

The defining symptom of schizophrenia is repeated psychotic episodes, and so most of the information in the psychosis section applies here. It should be noted though, that disorganisation of thought is often more pronounced in the person with schizophrenia, making money management and problem solving particularly difficult, especially during periods of psychosis. For this reason, people with schizophrenia often have significant financial problems and I am sure that financial stress contributes to a worsening of the illness in many.  Again, many people with schizophrenia live in terrible poverty.

Given the links between stress and psychosis, it is not surprising that financial counsellors have seen a recent sharp rise in the number of clients with serious mental illnesses such as schizophrenia. Over the same period there have been significant rises in the cost of accommodation and basic necessities.

For clients with schizophrenia, systems like Centrepay, and other well-managed and ethical automatic payment systems can be helpful, because the person does not have to rely on memory  and may not be able to manage the complex tasks involved in putting money aside for payments, balancing a budget and so on. Anything you can do to reduce stress has to be good for the schizophrenic client’s mental health.

A final word

Financial stress has the potential to negatively affect mental health in a number of ways, and to bring on or worsen a number of mental illnesses, not all of which are discussed in this article.

The take home messages are:

1. that financial counsellors should be aware of the effects of stress on mental illness, and be prepared to gently encourage clients struggling with the strain of financial stress to see their GP or seek professional help; and
   
2. that financial counsellors have a key role to play because we are able to provide options that have the potential to reduce financial stress, and that can only be good for our clients mental well-being.

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1. Kessler, R. C., et al. (2005). Lifetime prevalence and age of onset  of DSM-IV disorders in the National Comorbidity

Survey replication. Archives of General   Psychiatry, 62, 593-607.

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   Privacy Commissioner Case Notes

Richard Brading
Principal Solicitor, Wesley Community Legal Service

The Privacy Commissioner has been increasingly active in protecting privacy.  The following are summaries of some of the more interesting recent cases.

Own Motion Investigation v Bankruptcy Trustee Firm [2007] PrivCmrA 5

A financial counsellor complained to the Privacy Commissioner that a bankruptcy trustee was publishing on its website a wide range of personal information  belonging to the bankrupts whose estates the firm was administering.  The Commissioner then conducted an ‘own motion investigation’ of the practice. 

The bankruptcy trustee argued that the information it published on its website was publicly available information taken from the publicly available sections of the bankrupt’s Statement of Affairs and the NPII.  The bankruptcy trustee also argued that statements of opinion published on the website, particularly the    trustee’s opinion about whether the bankrupt had broken the law, did not constitute the personal information of the bankrupt.

The Privacy Commissioner accepted that the bankruptcy trustee included the bankruptcy information on its website as a means of providing this information to relevant creditors.  However, it was also available to the general public.  Any internet user was able to browse hundreds of bankrupts’ files.  This was a secondary   purpose which was not related to the primary purpose of providing information to creditors.  The Commissioner considered that individuals would not reasonably expect this unrestricted disclosure of their bankruptcy information.

Importantly, the Privacy Commissioner also held that the trustee’s opinion about whether the bankrupt had broken the law did constitute the personal information of the bankrupt.

The Commissioner recommended that the bankruptcy trustee take steps to prevent general internet users from browsing the bankruptcy files (for example by securing the information using password protection). 

The Commissioner also recommended that the trustee’s opinion on whether bankrupts had breached the Bankruptcy Act be removed from the information made available to creditors.

T v Retailer [2007] PrivCmrA 22

The consumer purchased an item from a door-to-door salesperson.  Within the ten day ‘cooling off’ period provided by the retailer, the consumer decided to return the item and left a voicemail message with the retailer informing them of their desire to return the goods. The goods were not returned until after the cooling off period had expired.

The retailer denied receiving the voicemail message and stated that the first time the consumer made direct contact was outside the cooling off period.  The retailer then requested a credit reporting agency to list a payment default on the consumer’s credit file.

In conciliation, the retailer agreed that it was sufficient notice for the consumer to leave a voicemail message and acknowledged that the purchased item had been returned in its original condition. 

The retailer agreed to remove the default listing from the consumer’s credit file.

P v Tenancy Database [2007] PrivCmrA 18

The Residential Tenancies Tribunal ordered a tenant to give up possession of their tenancy and to make payment to the landlord.  5 years later, the landlord’s agent listed the order on a tenancy database. The  tenant complained.

National Privacy Principle 3 requires an organisation to ensure that the personal information it collects, uses or discloses is accurate, complete and up-to-date. 

The Privacy Commissioner held that after 5 years the information about the Tribunal order was no longer up-to-date and should not have been listed. The  tenancy database agreed to remove the default listing from its database.

Note that the same principle would apply to prevent creditors listing old credit defaults on a consumer’s credit file.

A v Licensed Club [2007] PrivCmrA 1

The complainant was a member of a licensed club. The complainant claimed that they had been harassed by 2 individuals visiting the complainant’s house.  One of the individuals was a long-time ex-partner of the complainant.  The individuals did not know previously know where the complainant lived.

According to the complainant, the individuals told the manager of the club that they were friends of the complainant and the manager then gave them the   complainant’s address. The manager also made comments to the individuals about the complainant’s drinking habits. 

The complainant claimed to have suffered embarrassment and distress as a result of the breach of privacy. Because the ex-partner was making threats, the complainant had to move to a different suburb to escape. 

The club paid an amount of compensation to cover the complainant’s costs of relocation and lost income resulting from the move.

   Who is this man?

Answer in News, views and information on what's happening in financial counselling around Australia.

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   The Law Matters

Richard Brading
Principal Solicitor
Wesley Community Legal Service

   Travelling Overseas When Bankrupt

Clients often worry about whether they will get permission to travel overseas whilst bankrupt. 

The law requires the bankrupt to surrender their passport to their trustee upon becoming bankrupt.  The bankrupt must not leave Australia or do any act in preparation to leaving the country without written permission from their trustee. It is an offence (s.272) to do anything substantial in preparation to leaving the country without written permission.  In theory this means that a bankrupt could be prosecuted for buying a plane ticket prior to permission being granted, although such a prosecution is unlikely.  A bankrupt who tries to go through immigration at an airport without permission, however, is likely to be arrested and charged.

How to request permission

ITSA have a form called “Request for permission to travel overseas whilst bankrupt” which can be downloaded from its website. This form must be completed for bankrupts whose trustee is ITSA.  It can also be used when making requests to private trustees.  ITSA also has an information sheet called “Overseas Travel” which sets out the information required for standard requests, being:

• Reasons for going overseas
  
• Dates of departure and return
  
• Details of the itinerary and any overseas contact details
  
• Particulars about who will fund travel costs
  
• Any documentary evidence supporting the request, e.g. confirmation by an employer of the need to travel, confirmation of costs by a third party.

Get the proper paperwork

In the case of El-Maghraby v Pattison [2003] FMCA 103, the bankrupt applied for permission to visit his sick mother in Egypt. One reason the trustee           rejected the application was lack of paperwork. Eventually the court granted him permission to travel, but still required him to provide the proper             paperwork to the trustee first.  The court in that case was convinced that the bankrupt’s reason for going overseas was genuine because he filed an affidavit in support made by his brother, who was a Federal Police Officer.

If there are discrepancies in the names used by the bankrupt, then an explanation needs to be provided to the trustee.  If photocopies are provided to the trustee, then they need to be clearly legible.

Co-operate with the trustee

It is inevitable that the trustee will refuse permission if there are outstanding matters in the administration of the estate.  For example, in a business bankruptcy, the trustee will not grant permission if the bankrupt has failed to comply with a request to furnish business books and records or attend an interview. 

Bankrupts who are unhappy with their bankrupt status and are hostile towards their trustee are less likely to get permission than those who are co-operative. 

Reasons for going overseas

The main grounds for going overseas are work or  compassionate reasons. 

If the bankrupt will be making a contribution from income, the trustee will want to be satisfied that the contribution will be made.  A letter from the employer will assist if it provides some assurance that the contributions will continue during the person’s absence. 

If the bankrupt wishes to visit a sick or elderly relative, it will assist to provide a doctor’s letter or other documentation confirming this.

The law does not preclude holidays as a reason, but it will be more challenging to get permission. An application to holiday with overseas relatives will be received more favourably than a gambling trip to Las Vegas.

How does the trustee decide whether to grant permission?

The trustee has discretion to grant or refuse permission.  In exercising the discretion, the trustee should consider the following questions:

1. Is the proposed visit genuine?
2. Is the bankrupt likely to return to Australia as promised?
3. Will the visit hamper the administration of the estate?

The trustee will refuse consent where the bankrupt’s presence in Australia is necessary for the proper and efficient administration of the bankruptcy. 

This means that a bankrupt who has failed to provide important information sought by a trustee will not get permission to leave the country.  However, once the bankrupt provides all the required information the   trustee cannot refuse permission as punishment for being difficult.

Nor can the trustee impose unreasonable conditions. 

In the case of Jatkar v Rambaldi [2003] FMCA 355, the trustee demanded a bond of $30,000 before granting permission to visit her sick mother in India.  Her son offered a bond of $2,000 which the trustee rejected.  The court held that there was no evidence that the bankrupt could provide a bond of $30,000, and granted permission for the bankrupt to travel without providing a bond.

Appealing a decision to refuse permission

If the trustee decides to refuse permission to travel, the bankrupt can appeal to the Federal Magistrates Court within 60 days of the bankrupt being notified of the refusal.  The filing fee (currently $374) may be waived on grounds of financial hardship. 

The presumption is in favour of granting permission to a bankrupt.  In re Tyndall ex parte Official Receiver (1977) 17 ALR 182, the High Court said:

“An application by a bankrupt for permission to travel overseas requires careful consideration of all relevant circumstances for the reason that is ordinarily related to the freedom of a subject who is neither a criminal nor under criminal restraint to travel to pursue his legitimate commercial or personal desires.”

What to say to clients

Clients considering bankruptcy often worry about whether they will be permitted to visit family overseas while a bankrupt. These clients can be reassured that their trustee cannot unreasonably refuse permission to travel. 

However, the client needs to understand that their co-operation in the bankruptcy is one essential factor in obtaining permission, and good paperwork is also important.  Provide the client with a copy of the ITSA information sheet and encourage the client to contact ITSA if they want to obtain further information. 

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   National Bankruptcy Update

Anna Mandoki
AFCCRA representative on the Bankruptcy Reform Consultative Forum

Bankruptcy Reform Consultative Forum
I have recently taken over from Jan Pentland as AFCCRA’s representative on the Consultative Forum. If you have any bankruptcy issues you feel it might be appropriate to raise at a national level, please contact me on 0431 233 651, or send me an email at: amandoki@hotmail.com.

The latest meeting of the Consultative Forum was held by ITSA in Sydney on 12 September. I attended this to represent the interests of consumers and financial counsellors. Representatives of creditors, the ATO, and registered trustees were also present.

Attorney-General
We were very fortunate to have the new Attorney-General, the Hon Robert McClelland, present for the first part of the meeting. The AG was interested in hearing about current bankruptcy issues, and we had the opportunity to raise the matter of outsourcing with him, which is essentially an issue of resources.

ITSA is currently outsourcing some bankruptcy administrations to registered trustees, as it does not have the capacity to deal with all administrations in house. For financial counselling clients, outsourcing can raise problems of equity of access and treatment in bankruptcy.

The AG also appeared very informed about, and supportive of, the work of financial counsellors. He undertook to look into possible sources of support for our sector, particularly around financial counsellors’ interaction with community legal centres, and the   recommendations of the Productivity Commission that more resources need to be applied in these areas.

Part IX Debt Agreements
In the last few months in particular there has been a large increase in DAs, and these now account for approximately 25% of all bankruptcies. Creditor     representatives reported that the reforms introduced last year appear to be working well from their point of view, and there is increased confidence in the system overall. However, financial counselling clients continue to have problems with some Debt Agreement Administrators. These problems include high initial set-up fees, non-viable agreements, problems with marketing of services, and the provision of misleading information.

ITSA Reviews
The review of offences is now complete. Gambling remains a potential offence under s271. Although there have never been any prosecutions brought under this section, ITSA wants it to remain as a deterrent. Our sector will continue to lobby to have this section removed.

Submissions to the recent review of trustee remuneration can be viewed on ITSA’s website. There were several submissions from consumer groups,    including AFCCRA. The proposals made in this review seem likely to be implemented. This includes a proposal to prevent registered trustees from pursuing debtors for the minimum fee, where there are insufficient assets in the estate to cover the fee. The rate of trustee remuneration was not within the scope of the review, however, and this remains an issue for our clients in a small number of cases.

ITSA publications
Practice and policy statements are available on ITSA’s website, under ‘About Us’, and these continue to be developed and added to. Reports due to be released very soon include a research report on Debt Agreements, as well as the latest profile of debtors.

7th ITSA Bankruptcy Congress
This is being held in Sydney on October 30 & 31. The program offered is excellent and includes a debt management stream that would be of interest to  financial counsellors. Probably due to the good program, the reasonable cost, and the relatively accessible location, there has been unprecedented    demand this year from financial counsellors wishing to attend the Congress. While on one level it is good to see such strong interest from our sector, unfortunately it has meant that ITSA has had to place a cap on numbers. Currently, more than a quarter of the attendees at Congress will be financial counsellors – this is more than double the number of ITSA staff attending, and is also far higher than the 2006 Congress in Brisbane.

In order to keep a reasonable balance in attendees, ITSA is unable to accept any further registrations from financial counsellors. There are also many financial counsellors currently on a waiting list who will unfortunately be disappointed. While this year’s level of demand took us by surprise, we anticipate that demand for the 2010 Congress, to be held in Melbourne, will also far exceed the number of places available. As a result, for the Melbourne Congress AFCCRA intends to work closely with ITSA and the states and territories to implement a registration process for financial counsellors that we hope will ensure (as much as possible) a fair and equitable allocation of places.

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   AFCCRA Update

Jan Pentland
Victorian AFCCRA representative

2008 AFCCRA Conference
The 2008 AFCCRA Conference and Financial Literacy and Inclusion Forums in Sydney in July were very successful as was the EDR Forum held previous day. Over 150 attended each day and the feedback has been excellent. The main highlights were:

• The EDR Forum opening address from Minister  Chris Bowen;
  
• Opening addresses by David Tennant on Wednesday and Paul Clitheroe on Thursday;
  
• Keynote addresses by Michael Raper, Dr Charles Livingstone and Dr Paul Harrison.

Charles Livingstone presented on Monash University’s research comparing the Australian model of financial counselling with those in the US and the UK. The Literature Review which is the first stage of the research is now available at www.afccra.org. The next stage is focus groups and discussion with stakeholders and a final report.

This research has a particular focus on potential conflict of interest when financial service providers fund financial counselling casework. The panel on  conflict of interest which followed Dr. Livingstone’s presentation progressed AFCCRA’s national discussion on this issue.

The workshops at the Financial Literacy and Inclusion Forum on engaging diverse groups, and financial literacy in a community development context saw active participation and animated discussion.

Over 20 indigenous workers from across Australia enjoyed the yarning session on Thursday afternoon. AFCCRA continues to make it a priority to facilitate attendance of indigenous workers and financial counsellors who work with indigenous communities.

Planning for the 2009 EDR Forum and AFCCRA Conference is underway. Conference proceedings will be available at www.afccra.org very soon.

Review of the Diploma of Community Services (Financial Counselling)
Having completed its input to the review of the Diploma, AFCCRA is now focused on maximising  accessible, flexible, high quality delivery of the new  Diploma. As part of this process it is contracting a technical writer to prepare training and assessment  materials for the specific financial counselling units of competency.

Pilot project to establish an independent Foundation
Work on the pilot of an independent foundation as a conduit for industry funding support of the financial counselling sector continues. AFCCRA Council is considering appropriate models for such a foundation. Recently we met with the seed funders: ANZ, NAB, CBA, Westpac and Abacus.

Increased funding for financial counselling
Increased funding for the financial counselling sector in 2008 is encouraging after many years of lobbying .The doubling of funding for Commonwealth Financial Counselling in the first Rudd budget on 13 May was very welcome. There was also increased funding in the NSW and WA state budgets. Hopefully it signals a commitment to the sector going forward.

Clearly there is a need for additional monies particularly in these challenging times with financial hardship affecting an ever growing number of         Australians. In some states, the situation is dire despite hard working state associations making a case for more financial counsellors. There is very broad support including from the financial services industry, for increased funding as a matter of urgency.

There is also a clear need of resources for the national peak body. AFCCRA has received no core funding from Government since 1996.  We continue to raise the need for increased resources for financial counselling and for AFCCRA with Government.

AFCCRA’s other activities:
AFCCRA represents financial counsellors and our client groups in a number of forums and on a range of issues:

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   Pro Bono: For The Public Good

Lisa Turner
Solicitor, Wesley Community Legal Service

More and more often, clients of financial counsellors have issues with worrying legal implications. While such problems are worrying enough on their own, they are often complicated by concerns about how any  solicitors or lawyers that are hired might be paid. Very few clients of financial counsellors have the resources to pay the full price for legal representation. This is where pro bono schemes can help.

Pro bono publico is a Latin term meaning ‘for the public good’, and in the legal arena generally means the provision of legal services at no cost or at a            substantially reduced rate. When a client has no other access to the courts or legal system there are a broad range of services available nationally to assist them.  Many of these services have a selection criteria usually based on a means and merit test. 

One common criteria is proof of Legal Aid rejection, so the first step for any client with legal issues is to approach Legal Aid, who have their own means-testing procedure. Clients must meet the strict criteria and check to see if Legal Aid provides services for the type of matter involved.  The National Legal Aid website (http://www.nla.aust.net.au/) contains links and contact    details for Legal Aid in all States and Territories.

Pro Bono Referral Schemes

A Referral Scheme takes applications for pro bono assistance then refers individual matters to solicitors who have volunteered to assist the program.  If the type of matter is one that the Scheme assists, the application is then put through two tests:

1. A means test to ensure the Scheme is available to the person making the application; and
2. A merit test to assess the likelihood of a successful outcome in the matter.

Referral Schemes cannot operate without private legal practitioners willing to volunteer their time to assist people who cannot afford legal representation.  No solicitors participating in these schemes are required to assist your client and your client should be reminded of this before seeking a referral.  Because of the voluntary nature of the Schemes, many have discretion to allow or disallow an application regardless of criteria. 

The willingness of your client to contribute a small amount for the legal representation will always assist the Scheme in finding a solicitor willing to take on the referral. This amount need only be as much as your client can afford, and arrangements for instalments can be made.  This agreement is between the solicitor and your client - your client need only indicate an estimate of the contribution they can make to the Referral Scheme.

Referral Schemes will take applications for matters related to: Administrative Law; Animal Law; Apprehended Violence Order applications; Business Law in relation to non-profit organisations; Child care and protection; Criminal Law; Debt and credit matters; Discrimination matters; Employment/Industrial Law; Family Law (limited to children's matters); Immigration Law; Tenancy matters; Wills and Estates.

Some matters are excluded from pro bono assistance under the Referral Schemes, either because of the amount of time and money needed for a successful conclusion, or because the matter can be settled through compromise between the parties.  Examples of the types of matters that are excluded include: Business Law, except in exceptional circumstances; Intractable disputes between neighbours; Family Law property settlements and maintenance; Workers Compensation; Professional Negligence and Personal Injury (normal or conditional fee basis); Defended AVOs; Traffic matters/motor vehicle accidents; Local government and planning; Victims compensation. 

The above list of matters that are included and excluded is far from exhaustive, and your client should contact the specific organisation running the scheme to check what will and will not be referred. 

For a list of the Schemes available in your region, see the National Pro Bono Resource Centre website which assists with finding Legal representation, legal information, information on Legal Aid; Community Legal Centres; Pro Bono Legal Referral Schemes, the Public Interest Law Clearing House, and other options including self representation and Court based referral schemes.  This site has State and Territory  directories and lists free legal advice help line numbers (see www.nationalprobono.org.au).

Pro Bono Centres

The Public Interest Law Clearing House (PILCH) is an independent, not for profit legal referral service dealing with public interest legal matters.  PILCH is located in the ACT, NSW, QLD, VIC and WA.  The WA, VIC, and ACT branches also run pro bono Referral Schemes for private matters.  In NSW, QLD and VIC PILCH also jointly manages the Homeless Person’s Legal Service. 

Eligible clients for public interest matters are ‘not for profit’ organisations and individuals who are unable to pay for legal services at the normal charging rates.  Public interest matters are matters requiring a legal remedy or other assistance and that affect a significant number of people, or that raise matters of broad public concern, or impact on disadvantaged or marginalised groups.  For private matters talk to the specific branch for an outline of eligibility criteria.

Community Legal Centres

Community Legal Centres (CLCs) are community  organisations that provide free legal services to the public. CLCs can offer specialist legal advice on     matters such as child welfare, credit and debt, employment, disability discrimination, tenancy matters and a lot more.  CLCs are open to members of a community who suffer economic, social or cultural disadvantage and clients whose circumstances are   affected entirely by their legal problem. CLCs are  located in urban, regional and remote areas and deal with the community as a member of the community.  Some CLCs are staffed completely by volunteers,   others receive funding from state and federal governments and other organisations.  For more on specific CLCs see the National Association of      Community Legal Centres website (www.naclc.org.au).

Self Representation

Legal processes and procedures can be daunting. However if your client has no choice but to represent themselves there are available resources to help them identify the processes they will need to follow. Courts, Community Legal Centres and other Legal Resource Centres have pamphlets outlining what will happen during Court and what needs to be done. They contain handy hints and tips that will help your client feel confident during the process.

Judges and Magistrates will assist a self represented appearance in Court in the interests of justice.  When the other party has legal representation, the Judges and Magistrates will explain representations made by the Solicitor and highlight consequences of statements or actions to the self represented person.

Court Network is a Court based service run in Victoria and Brisbane.  This is run by volunteers and assists people attending Court with free advice as to the Court processes. It does not, however, give legal advice.

It is important that when your client approaches or applies for any type of legal assistance they forward all paper work with their application, or, if they are meeting a legal representative they take all their paper work to that meeting. What this means is copies of bank statements and pay slips and anything that shows income or debt. Your client will also need to take,   depending on the type of matter, the charge sheet, a copy of a statement of claim or other Court notice, a family court report, and anything else relating to the matter so far. 

All State and Territories have a Law Society or Law Association. These are a great resource for finding ways for your client to deal with their legal issues.  Many run Pro Bono Referral Schemes, have pamphlets available on self representation, fact sheets on different kinds of law, and numbers your client can ring for free legal  advice over the phone (such as LawAccess in NSW).

Pro Bono Australia: www.probonoaustralia.com.au

This website is a very important resource, as it has a great deal of information in its fact sheets, and has lists and contact details for most relevant services .

AFCCRA Update: Continued from Page 11.

• Anna Mandoki has replaced Jan Pentland on the Bankruptcy Reform Consultative Forum. Anna will speak at the Bankruptcy Congress on 30 and 31 October;
  
• The ACCC Consumer Consultative Committee where Jan Pentland represents AFCCRA has met with Centrelink about the review of Centrepay and concerns about a minority of exploitative businesses abusing the system;
  
• Jan Pentland  is a member of an advisory group for the NAB project with Money Fast to test the claims of fringe lenders that less than 48% interest rates are unviable.
  
• AFCCRA has made submissions to the Green   paper on reform of financial services, the Code of Banking Practice Review, the review of the Code Compliance Monitoring Committee; ITSA review of remuneration of Registered Trustees, and the Australian Compact. We’ve also participated in joint consumer movement submissions.

If you would like further information on any of the above please contact Jan Pentland on 0407 042 483 or email me at janpentland@hotmail.com.au.

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   Round Up

Western Australia

Retirement of Janet Pine

Janet Pine, financial counsellor from the beautiful town of Albany on the West Australian south west coast, has recently announced her retirement. Janet made a late career change from teaching to financial counselling, and found that her new profession suited her background and skills ‘like a glove’.

Janet says that she is looking forward to having time to ‘enjoy the beauty of Albany's special environment even more than before’, a very understandable sentiment given how truly lovely Albany is.

Janet is very well-liked and respected, and financial counselling in Australia will be all the poorer for her retirement.  The financial counsellor from Anglicare, Ann Maroni, who has worked in the area for several years, will continue to provide local financial counselling.

All of us at Sharkwatch and the National Financial Counsellors’ Resource Service wish Janet the very best for the future.

Marianne Mayer Joins FCRP
Marianne Mayer, ex-President of the Financial Counsellors Association of Western Australia and the current WA representative to AFCCRA, has recently been appointed as the new Training and Professional  Development Officer at the Financial Counsellors’ Resource Project in Perth. Marianne has a wealth of knowledge about financial counselling and will do a fantastic job in this important role. We at Sharkwatch are delighted to see Marianne’s many skills and talents being put to use in this new role.

New South Wales

Vale Eileen Wildy

At Sharkwatch we were very upset to hear about the recent death of Eileen Wildy. Eileen was a much loved financial counsellor from the NSW Central Coast. She has worked in various services in NSW, most recently at Credit Helpline and the Credit and Debt Hotline.

Eileen was well known for her gentleness and wisdom, and for the great compassion she had for her clients. She will be greatly missed, and Eileen’s many friends at Sharkwatch offer their condolences to Eileen’s family.

Responsible Gambling Fund (RGF) Gambling Financial Counselling Services

The following NSW services have been funded by the RGF to provided financial counselling from July 1 2008:

• Anglican Counselling Service New England 
       Phone: 6752 3419
  
• Lifeline North Coast
       Phone: 6651 4093
  
• Lifeline Central West
       Phone: 6332 3456
  
• Mission Australia Illawarra 
       Phone: 4229 4711 or 4422 0455
  
• Mission Australia Riverina
       Phone: 6933 9700
  
• St David's Care Albury  
       Phone: 6021 7099 or 6021 7175
  
• Wagga Wagga Family Support Service   
       Phone: 6921 7675
  
• Lifeline Western Sydney (Parramatta)  
       Phone: 9891 6212
  
• Wesley Mission Penrith     
       Phone: 4731 3511
  
• Mission Australia South West Sydney   
       Phone: 4621 7400
  
• Salvation Army Fairfield     
       Phone: 9723 8134
  
• Mission Australia Campsie    
       Phone: 9718 8544
  
• Wesley Mission Surry Hills    
       Phone: 9951 5566

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   News, views and information on what’s happening in financial counselling around Australia.

• Wesley Mission St George/Sutherland
       Phone: 9542 2578
  
• Lifeline Harbour to Hawkesbury
       Phone: 9498 8695

Increase in NSW bankruptcies

Bankruptcies in NSW have increased 38% since 2005. Currently, 26 people a day in NSW are filing for bankruptcy, with 9722 becoming bankrupt last year.

This means that NSW, which has 32.6% of the Australian population, accounted for 37.4% of all the bankruptcies in Australia (25,964 in total last year). Overall, 1 in 711 people in NSW become bankrupt last year.

The 38% increase compares to an average increase in other states of just over 15%.

It is hard to know why NSW has had such a great   increase in bankruptcies compared to other states, but factors such as high rental and housing costs and inflated grocery prices have been put forward as possible contributors.

Victoria

Launch of Education Costs Kit

The Education Costs Kit is a practical resource designed to assist community agencies who are working with low income Australians that are struggling to pay school costs.

The kit will be launched on Thursday October the 16th at 1.30 pm, at the Springvale Community Aid and Advice Bureau (5 Osborne Avenue, Springvale).

The kit should be a valuable resource for financial counsellors, as school costs are a constant battle for so many of our clients.

Those who are interested in attending the launch should contact Hilda Saultry by October the 10th, on 03 9546 6266 or at hsault@scaab.org.au.

National

The ACCC recently launched their new web page titled “Managing your mortgage”, a very timely initiative given the recent heavy increase in home repossessions. The page is located at: http://www.accc.gov.au/content/index.phtml?itemId=830004, but can also be accessed by going to http://www.accc.gov.au, selecting ‘For       Consumers’ from the menu at the left, scrolling down to ‘How can we help’ and choosing the ‘Tips on managing your mortgage before you consider selling your home’ link.

According to a press release from the Minister for Competition Policy and Consumer Affairs, The Hon. Chris Bowen, the site was created to “assist those home owners experiencing  mortgage stress or who are struggling to meet their mortgage repayments”.

The press release also notes concerns raised by the Federal Member for Blaxland, Jason Clare, about “certain unscrupulous practices of real estate operators in Western Sydney, targeting home owners that are both under financial pressure and looking to sell quickly”. It is hoped that this initiative will help home owners experiencing financial pressures to understand the steps they can take to avoid home repossession. These include:

• Seeking independent advice from a financial counsellor, community legal centre or legal aid office to identify possible courses of action
  
• Talking to the lender as soon as a problem is identified to discuss options
  
• Checking all the terms and conditions of new loans before deciding to refinance
  
• If a sale is necessary, arranging a number of valuations to get the best deal

It is advised that financial counsellors or consumers who have any concerns about illegal activities in this area they should contact the ACCC Infocentre on 1300 302 502.

Answer from Page 7-Who is this man?.
The mystery man is Bob Cruickshanks, Deputy Official Receiver from ITSA NSW. Bob is a well known and much loved figure amongst financial counsellors across Australia.

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   In the Media

Credit the positive: agency

Original story by Ari Sharp

This story notes the gaining momentum from agencies such as Veda Advantage to implement positive credit reporting in Australia. To our knowledge, two agencies in Australia lead the running to provide a positive credit reporting system, and one of these is Veda. Financial counsellors are split on this issue, with some believing that more comprehensive credit information will lead to better lending decisions and others strongly opposed. This article notes recent statements by Veda and also puts forward some alternate views.

“At present, Australia's credit rules allow only for negative reporting, whereby only serious payment problems are recorded on a consumer's credit file. But credit agency Veda Advantage is pushing for a move towards more comprehensive reporting that reveals   account payment history. Veda is calling for rules that allow credit reports to demonstrate account payment history over the previous 24 months to be introduced by the end of next year.

“But consumer advocates are wary of the benefits of credit providers having access to payment histories. Consumer Action Law Centre policy director Nicole Rich said the push for additional information was a   distraction from the regulation of reckless lending practices.     

“"It is pretty rich for lenders to suggest that they will lend better if they have more information, when they already use lots of techniques to make more money from pushing people into more debt for longer," she said.     

“A spokesman for the Australian Privacy Foundation said there was a chance the data could be misused or accessed by groups

without authorisation. "You are creating a general purpose honeypot," the spokesman said. "The absolute prize that any hacker would want, that any company would want, that a marketer would want, that the Tax Office would want."  

“To bolster its case, Veda released an analysis of a sample of bankruptcies over a three-year period that showed that 57% had had no adverse event in the two years  before bankruptcy. Veda also released information showing that Australia's credit binge had pushed up the rate of bankruptcies even beyond the level they reached during the recession in the early 1990s.”

Melbourne Age 8.8.08

Random calls woo gamblers

Original story by Jonathon Dart

This story notes that “the online bookmaking agency Sportsbet has started calling mobile phones randomly encouraging people to bet. When the phone is  answered, a pre-recorded voice message says: "What are you waiting for? Hit six [on the keypad] for a $60 betting voucher. Go on, hit six for $60 and you could win big." … The calls are made by a separate business, the mobile phone subscription service Jackpot SMS which uses a computer program to dial random numbers.

“Although NSW has stringent laws on gambling advertising, interstate online betting agencies have interpreted a High Court decision in March to mean they are not bound by them. The court found that online agency Betfair has the right to operate in  Western Australia despite legislation prohibiting betting exchanges in that state, after it was determined that restrictions on interstate trade contravened section 92 of the constitution.

“The principal solicitor for the Wesley Community Legal Service, Richard Brading, said Sportsbet must still abide by Northern Territory law, where it is registered, but he described the Territory as the "wild, wild west" of Australian gambling jurisdictions. "By offering that $60 voucher, it sends a psychological message that it is quite easy to get something for nothing," he said. "Now for a 13- or 14-year-old getting this on their mobile phone, that's going to have an impact. "It's a marketing ploy under the guise of responsible gambling that is quite irresponsible because it involves a free gambling product that is likely to result in people gambling their own money.””

The agency acknowledges it has no way of knowing whether the calls reach minors or problem gamblers.

Sydney Morning Herald, June 27, 2008

Financial assistance for this Project was provided by the New South Wales Government from the Responsible Gambling Fund. The views expressed in this publication are solely those of the authors and do not represent the views of the Responsible Gambling Fund or of the New South Wales Government.

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