Inside this issue:

• Notes & Notices
  
• Federal Government to Take Over Jurisdiction for Consumer Credit
  Wayne Warburton
  
• Internet and Phone Scams
  Richard Brading
  
• Telstra Warning About Telemarketing  
  
• Another Phishing Scam does the Rounds 
  
• The Law Matters: Overseas Bankruptcy
  Richard Brading 
  
• AFCCRA Up date
  Jan Pentland 
  
• ITSA Bankruptcy Amounts and Limits
  
• Bankruptcy Contribution Calculator
  
• Round-Up
  News, views and information about financial counselling around Australia
  
• In the Media
  Snippets of interest and information found in the media regarding issues around financial counselling 

   Notes and Notices

Immigration Rights Website

A number of financial counselling services in Australia have clients with immigration issues. Elizabeth Terry from Wesley Gambling Counselling Services has notified Sharkwatch of a helpful website—that of the         Immigration Rights and Advice Service (a legal centre).

Their website (www.iarc.asn.au) has a lot of helpful fact sheets as well as details of their new street address, new phone number, and new arrangements for appointments.

AMEX Hardship number

The hardship number for American Express is 1300 660 562 (thanks to Elizabeth Terry for sending this in).

One stop website for information and help with Mobile Premium Services

19 SMS Services are information and entertainment services that deliver various forms of content to mobile phones. These services are created by a content supplier and delivered via the network of each person’s mobile service provider. They are called 'Mobile Premium Services' because people buy them using their mobile phone, receive them on their mobile phone, and will be charged a premium cost for them. 19 SMS services are more likely than not to be subscription services. Whenever people buy content using a 19 number - such as a ring-tone - they will in all likelihood be signing up to receive more than one and to pay for more than one.

To find out about a 19 SMS service, how to get it, how to pay, how to stop, how to get help, and how to look up a 19 SMS service, people can visit a one-stop information and help website at www.19sms.com.au, which provides helpful advice and information about Mobile Premium Services.

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.

ATO Debt-Hardship Hotline

The ATO Debt Hotline phone number is now available for all financial counsellors nationally*.

After a short trial period the initial feedback from financial counsellors and the ATO has been very positive. Hopefully this will aid and expedite advocacy and negotiation with the ATO on behalf of clients.

Contact the ATO Debt-Hardship Hotline at:
Phone: 1300 788 347
Fax: (08) 9268 5566

Third Party Authority:

1. Please fax through an authority to speak on behalf of a client. This way the call centre operator will verify the date you sent the fax as a way of determining who they are talking to.
2. The authority should be sent even if the client is with you.

The ATO have asked for names and organisations of all F/Cs, but the AFCCRA council felt that this was not appropriate or necessary at this time.

As they get to know us it will become easier for them to identify us. If you have any issues please contact me on my mobile phone (0402 065 473) or email me at:  geraldine.phillips@dfc.sa.gov.au

Gerry Phillips
AFCCRA Representative (SA)

*Eds note: This is an FC only line. The number should not be given out to clients or members of the public.

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.

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   Federal Government To Take Over Jurisdiction for Consumer Credit

Wayne Warburton
National Financial Counsellors’ Resource Service

A number of people have contacted our service asking for clarification about who has jurisdiction over consumer credit now. In the past, consumer credit legislation was enacted separately in each State and Territory, with the Queensland legislation serving as the ‘template’ for other states to follow.

On July 3 last year, the Commonwealth Government announced that, in line with Productivity Commission recommendations, the jurisdiction for consumer credit would be transferring to the Commonwealth Government.

These changes are timetabled to occur in two stages, with the first stage of legislative changes scheduled for mid 2009. It is possible that the legislative changes may be in place as early as July 1 2009.

Stage 1

• The existing State and Territory legislation (the  Uniform Consumer Credit Code) will become enacted as Commonwealth legislation;
  
• Credit providers, finance managers and mortgage brokers will be need to be licensed nationally;
  
• There will be a number of conduct requirements to attain and maintain a license, including responsible lending;
  
• The Australian Securities and Investment Commission (ASIC) will be appointed as the regulator;
  
• Membership of an ASIC approved external dispute resolution scheme such as the Financial Ombudsman Service (FOS) or the Credit Ombudsman Service Limited (COSL) will be compulsory for credit providers, finance managers and mortgage brokers;
  
• The new legislation will cover loans made for the purpose of investing in residential property.

Implications of Stage 1 changes

The editorial team of Sharkwatch are of the opinion that the changes will not have huge implications for financial counsellors, but some possible changes should be noted.

One implication of the change is that some State and Territory bodies that currently deal with credit-related matters may no longer have jurisdiction. For example, in NSW, the Consumer, Trader and Tenancy Tribunal (the CTTT) may not have jurisdiction over credit-related matters once the Commonwealth legislation is enacted.

Having said this, there are mechanisms by which state bodies can work as agents of the Commonwealth, and so it is possible that the CTTT, the various Magistrates Courts, and other bodies that hear credit-related matters, may be given Federal jurisdiction over credit matters (and thus the ability to continue to hear such matters). There are no guarantees however, and financial counsellors should watch for the content of the draft legislation once it becomes available.

Another change that the legislation will bring is an Australia-wide decision on interest rate caps. These vary from state to state. For example, the cap is 48% in NSW, QLD and Victoria. At this stage there is no indication as to what approach the Federal legislation will take, but a national cap of 48% would not be a surprising outcome. This would certainly be helpful for low income and disadvantaged consumers in states or territories that currently have a higher cap or no such cap.

Stage 2

Plans for the second stage are a little more nebulous, and to our knowledge there is not yet a timetable for Stage 2 changes. In Stage 2, the Commonwealth will consider whether further regulation is required in terms of:

• The regulation of remaining areas of consumer credit, including pay-day lending (for example, pawnbrokers), credit cards, store credit,           investment and small business lending, reverse mortgages and personal loans.
  
• Examining whether the conduct obligations for issues (such as unsolicited credit increases) need to be bolstered.

Further information can be obtained from http://www.coag.gov.au/coag_meeting_outcomes/2008-10-02/index.cfm#regulat.

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   Internet and Phone Scams

Richard Brading
Principal Solicitor, Wesley Community Legal Service

Scammers are getting better at fleecing the greedy and unwary.  Here are some of the latest tips from the Australian Securities and Investments Commission (www.fido.com).

Internet Scams

Phishing

Phishing means emails that try to trick people into giving out their personal banking information.  People who fall for phishing scams usually are unable to recover the money that is stolen because they have broken their bank’s requirement that they keep their account numbers and access codes secure.  The best known scam is the Nigerian 419 scam, where you are promised a huge reward if you help someone transfer money out of their country by paying fees or giving them bank account details.

1. Fake surveys

• From the desk of the CEO of your bank – I am very pleased to introduce the online survey for our fellow customers. You have a chance to win one of 25 laptops for participation. The purpose of this survey is to obtain your opinions about the way your bank operates.  We are entering a new phase in our company history and I feel it would be appropriate to understand your perceptions of our company at this time. The survey measures opinions and perceptions.

2. Fake security and maintenance upgrades

• Your account has been randomly selected for maintenance and placed on ‘Limited Access’ status, please enter your account details to reactivate your service.
• Please provide your account details to reactivate your account following the introduction of a new security system which will help you avoid fraudulent transactions and keep your investment safe.
• Urgent, system problems. Please go to <web address> and re-enter your details.

3. Phoney investigations

• Your credit card has been cancelled in accordance with Article 205 of Chapter 210 of the international fraud department.  We suspect that your card was involved in some criminal activity.  A violation of the law is a serious criminal offence and could bring you before the courts.  Your bank will not be able to assist you until the investigation is over.  For further information visit our website at <web address>.
• You are subject to a tax e-audit and must complete the following questionnaire within 48 hours to avoid assessment of penalties and interest.  Please provide social security, bank account information.

4. False bills and charges

• According to our records your payment for your internet access account is late.  Perhaps you overlooked it? Please contact us at <web address> to update your details.
• Your domain name registration is due for renewal, please enter the following information exactly as it appears on your credit card statement. This will be compared to the information your bank has on file for your card to verify your payment.
• You have won a free gift (or prize), simply complete your credit card details for postage and handling costs and we’ll send it out to you.

5. Money has been withdrawn from your account

• $9,000 was withdrawn from your account last Friday.

Why these new fraudulent emails look genuine

Fraudsters make their emails look genuine by using:

• The names of real people
  
• The right logos and branding
  
• Links to pages from the real website
  
• Official looking fine print
  
• A site that mimics the real thing.  Technically, it’s quite easy to copy parts of genuine web pages to a new fake address.

Some of the biggest names on the internet have been targeted by fraudsters, including:

• eBay – users received emails masquerading as official PayPal alerts that asked recipients to submit bank and credit card details after the user’s account has been randomly selected for maintenance and placed on “Limited Access” status.
• Yahoo! – users were encouraged to divulge their personal information in response to an email posing as being from Yahoo! Employees.
• Melbourne IT – deceptive emails lured Melbourne IT customers to a mimic site where they were advised to input their financial details, including credit card numbers, to renew their domain name registrations.  The mimic site had a similar web address to the official one.
• Westpac Banking Corporation – customers were sent emails inviting them to complete an online survey for a chance to win attractive prizes.  The fraudsters web address was similar to the official one.  Customers needed to log in their account  details to participate in the survey.

How do these internet-based scams work?

You get an email out of the blue with some story about why you have to reply.  The email claims to be from your bank, credit card company or some other service you use.  It usually asks you to send your account details, and sometimes your PIN, either by return email or through a website. Then—whooshka—your account has been emptied.

Other types of frauds

1. Work from home scams

Employment opportunities that promise huge incomes for little work. These scams usually ask victims to transfer money to someone else for ‘establishment costs’ or to recruit new victims.

2. Helpless victim/attractive female scams

My name is Binta Agota originally from Seirra Loene, it's gives me the greatest joy to reach you and became interested in knowing you better, for a real and true relationship and am sure we can have allot to do together in the nearest future so i will like you to reply to me back on <email address> For better recorgnition . I will wait to hear from you

3. Spyware and Trojans

Some computer programs conceal hidden programming to invade your computer and send secret
passwords and PIN numbers back to criminals.  Your computer can get infected with these dangerous bugs if you don’t keep your computer security up-to-date.  For example, your computer could be attacked while downloading games, music or videos, even if you always delete suspect emails.  The risk is greatest from websites that don’t have an established business reputation to protect.

4. Phone scams

‘Vishing’

Vishing is when you receive an unsolicited phone call or email asking for personal information which you provide by phone.  Because you are talking to someone official on the phone you may be more trusting.  You might get a phone call from someone claiming to be from your bank asking you to “update your account information”.  Or you might get an email asking you to make a call such as:

• Due to unusual levels of fraud we have had to suspend any future authorisations being conducted with your Visa Card.  If you want this restriction to be removed from your account please call us.  Call this number to have the restriction removed.  We apologise for any inconvenience caused.
• Dear Credit Union member, The personal identification number (PIN) was entered incorrectly more than three times.  For your protection we have deactivated your card.  To reactivate your card, please complete the authentication form or call this number.

5. Mule recruitment

Victims respond to job advertisements and agree to work for a fake company and provide their bank account details.  The victims may agree to provide details for an account without any funds.  The fraudsters then deposit stolen funds into the victims account and transfer the money out of the account somewhere else.  The victim may receive a payment for their assistance.  The fraudsters disappear but the victim is usually identified and may be prosecuted for participating in a fraud.

For more information

Contact the Australian Securities and Investments Commission or your local Office of Fair Trading for information about scams and to report a scam.  If you believe you are the victim of a scam you should report it to your financial institution immediately as they may be able to catch the fraudster and recover your money.

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   Telstra Warning on Telemarketing

Telstra note that in 2008 the ACCC instituted legal proceedings, alleging that Clarus Telecom telemarketers had misled consumers by making representations that the company and its services were affiliated with, or  provided on behalf of, Telstra Corporation. The Federal Court found that by this conduct, Clarus had made false and misleading representations to consumers. Telstra have since released the following suggestions to assist consumers to deal with ‘dirty tricks’ in telemarketing.

“1. Don't assume it is Telstra. You should not assume telemarketing calls are from Telstra, even if the telemarketer says they are a representative of Telstra at the beginning of the call. You can ask for proof that the telemarketer is calling on behalf of Telstra, such as asking them to provide information that only Telstra would know - such as your address.

2. Find out who it is. You should stay on the call until the telemarketer reveals who they work for - usually when they do their sales pitch - then make a note of all the details including what they said and the time of the call. Telstra needs to know who is doing this, where and when, so they can take steps to stop them.

3. Tell Telstra. If you, your family or friends have received these misleading telemarketing calls, call Telstra on 1800 260 270 between 8am and 5pm - Telstra is prepared to receive complaints about any type of sales activity, including telemarketing and door-to-door activity. It is important that Telstra captures the details of complaints, so they can investigate and take action.

4. Telstra reviews your complaints. Telstra will review people’s complaints, including competitor sales behaviour, and follow up with the companies involved as appropriate. Improper or unethical sales practices should also be reported to the company involved.

5. The TIO - If you are not happy with the response you receive from the company involved, you can forward your complaint to the Telecommunications Industry Ombudsman on 1800 062 058.

6. Do Not Call Register. The Australian Communications and Media Authority manages the ‘Do Not Call Register’ for people who do not wish to receive unsolicited telemarketing calls from companies they do not have a relationship with. To register, visit www.donotcall.gov.au or call 1300 792 958 or send mail to PO Box 42, North Melbourne VIC 3051.”

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   Another Phishing Scam Does Rounds

The Australian Communications and Media Authority, ACMA, has recently warned of an email currently doing the rounds that provides misinformation about mobile numbers being made 'public' in the near future. The email also incorrectly suggests that as a consequence, mobile users will be charged for calls made by telemarketing companies to their mobile service. This email is in reality a phishing scam that attempts to con people into providing personal details online.

ACMA notes that although the email “refers to the Australian Do Not Call Register website, it appears to have originated in North America a number of years ago and has been intermittently circulating since that time. The reference to consumers being 'charged' arises from the different charging regime for mobile calls in the USA, where often charges are incurred by mobile phone users for calls they receive. This charging regime does not apply in Australia.

“The Australian Do Not Call Register has strong mechanisms in place to protect the privacy of registrants. The numbers on the Do Not Call Register are never provided directly to telemarketers.

“Consumers can list their Australian fixed line and mobile numbers on the Do Not Call Register, provided the numbers are used primarily for private or domestic purposes, on www.donotcall.gov.au. Consumers can also register by phoning 1300 792 958.

“Under the Do Not Call Register Act 2006, telemarketers can check their calling lists against the Do Not Call Register. If a telemarketer calls a number on the Do Not Call Register, they may be in breach of the Act, and may face penalties.

“ACMA recommends recipients of the email delete it and not forward it on to other email users.”

Here is a version of the scam email being circulated:

REMEMBER: Mobile Phone Numbers Go Public next month.
REMINDER.... all mobile phone numbers are being released to telemarketing companies and you will start to receive sale calls.
YOU WILL BE CHARGED FOR THESE CALLS
Below is a link where you can enter your phone numbers online to put an end to telemarketing calls

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   The Law Matters

Richard Brading
Principal Solicitor
Wesley Community Legal Service

Overseas Bankruptcy

Your client came to Australia to enjoy the surf, sun and laid-back lifestyle, leaving behind a trail of unresolved debts in the old country.  Now the client has incurred some fresh debts in Australia and would like to know what to do about the debts that are still hanging around overseas. 

There are no easy answers to this problem.  Each country has its own debt collection and insolvency laws and few countries will accept an Australian bankruptcy as validly extinguishing debts created in their jurisdiction.

That brings us to the fundamental purpose of bankruptcy. Financial counsellors like to think of bankruptcy as a means of clearing up a mountain of unpayable debt, and allowing the bankrupt a chance to make a fresh start.  However, the big end of town are more interested in collecting money from high profile bankrupts, and it is these slick operators that are the primary focus of cross-national bankruptcy practices.

Remember Bond?  Remember Skase? The time is ripe for a fresh crop of high profile bankrupts to appear. The economy is down, smelly business practices are being exposed and there are sure to be corrupt corporate captains packing their bags for a first-class one-way flight to Majorca.

International bankruptcy law

So, the focus of international bankruptcy law is about trustees chasing the large and slippery fish into foreign jurisdictions and trying to claw back some of their ill-gotten gains. The sort of international debts commonly encountered by financial counsellors are relatively small and are often written off by the overseas creditors as too difficult to collect.  However an overseas debt is still a debt and must be disclosed in an Australian bankruptcy. So if the trustee accepts the debt is provable, the overseas creditor will be notified of the bankruptcy and have the opportunity to prove in the bankruptcy along with local creditors.  As the debt is extinguished by the bankruptcy in Australia, the overseas creditor will not be able to take further independent action in Australia to collect the debt.

Bankrupts that return overseas

However, should the bankrupt decide that they have had enough surf and sun and return to the country from which they came, then the overseas creditor may take further action to collect the debt there.  This is because each country has its own bankruptcy and debt collection laws and generally they do not recognise foreign bankruptcies as affecting their local debts.

Simultaneous filing for bankruptcy?

A simple suggestion is to file for bankruptcy simultaneously in all jurisdictions where debts are located. However, there are practical problems. Australia, like most jurisdictions, requires bankrupts to live in this country while they are bankrupt. If a bankrupt could live overseas, it would make the administration of the bankruptcy much more difficult. Trustees want bankrupts to assist in the bankruptcy, answer questions, provide documents and pay contributions.  This is not easily achieved if the bankrupt is sitting under a palm tree on a tropical island in the Caribbean.  Likewise, most other countries expect bankrupts to be living there, not on an Australian beach.

Consecutive bankruptcies?

Alternatively, a person could become bankrupt in Australia, and then go overseas after being discharged from bankruptcy here and then file for bankruptcy in the foreign country.  In that case, the person could be including the same debt twice in their bankruptcy.  While few people would bother to file a debtor’s petition twice it is more likely that a creditor would pounce on the person when they return to the foreign country and take debt collection action, including   bankruptcy.  Bear in mind that some less civilized countries still allow creditors to imprison debtors.

Betcorp case

The law also applies to company liquidators and may be used to protect them from overseas legal claims as well as recover assets.  A recent case involving an insolvent company is the Betcorp case.  Betcorp was an internet gambling company incorporated in Australia but aimed at U.S. gamblers.  Unfortunately for Betcorp, the U.S. government passed a law in 2006 prohibiting online gambling and took drastic action against overseas online gambling operators.  Betcorp lost its business and was put into voluntary liquidation.  Then a U.S. company commenced court proceedings in the U.S. against Betcorp alleging patent infringement.  In response, the Australian liquidator of Betcorp applied to the U.S. Bankruptcy Court to have the Australian liquidation recognised as a foreign main proceeding.  The liquidator relied on Chapter 15 of the US Bankruptcy Code.  The U.S. Bankruptcy Court held that Betcorp was primarily located in Australia, even though it had operated in the U.S.  The court noted that:

• Betcorp’s headquarters were in Australia
  
• Betcorp’s management was mostly in Australia
  
• Most of Betcorp’s assets were in Australia, and
  
• The laws of Australia applied to the company and its operations.

The liquidator won the case.  The U.S. Bankruptcy Court held that Betcorp’s centre of main interests was Australia.  This meant that the liquidator was able to stop the U.S. patent infringement case.  The U.S. company was required to commence an Australian patent infringement case if it wanted to pursue its rights against the liquidator.  In Australia, the liquidator could rely on the insolvency laws to protect it against the U.S. company. A similar case could have been run by a  trustee in bankruptcy.

Model Law on Cross-Border Insolvency

The Cross Border Insolvency Act became law in Australia on 1st July 2008.  It incorporates the Model Law on Cross-Border Insolvency formulated by the United Nations Commission on International Trade Law (UNCITRAL).  A number of other countries have also adopted the Model Law, including the U.S., the UK, New Zealand and Japan.

The model law provides a framework for co-operation between insolvency administrators and creditors where a bankrupt (or insolvent company) has assets or debts in more than one country.  The key points are:

• Where a person has been made bankrupt overseas, the overseas bankruptcy trustee can apply to the Australian Federal Court to seize the property of the bankrupt located in Australia;
  
• Where a person becomes bankrupt in Australia, the Australian bankruptcy trustee can apply to overseas courts to recognise the Australian bankruptcy and assist in the recovery of assets and other aspects of bankruptcy administration;
  
• Where a person becomes bankrupt in Australia with a debt located overseas, the overseas creditor can apply to participate in Australian bankruptcy proceedings on the same basis as Australian creditors;
  
• A framework is established for bankruptcy trustees in Australia to work together with overseas bankruptcy trustees and courts to recover the overseas assets of the bankrupt.

A long way to go

However, there remains a large area of uncertainty.  Whilst the legislative changes allow courts to recognise and assist with the administration of bankruptcies, the judges have discretion to decline to recognise the     applications.  Cases such as Betcorp are important as they set a precedent for future co-operation, but it should not be assumed that all future cases will follow the same path.  These international court cases are complex and expensive to run.  They are for the high flyers and are out of the question for the typical bankrupt seen by financial counsellors. 

The law is not at the point where it can be assumed that an Australian bankruptcy will prevent additional bankruptcy proceedings being instituted overseas.  Nor can it be assumed that a foreign creditor who proves in an Australian bankruptcy will be precluded from taking independent action to recover the debt overseas.  So the client who files a debtor’s petition here must disclose their overseas debts, but will have no guarantee that the overseas debts will be extinguished.

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   AFCCRA Update

Jan Pentland
Victorian AFCCRA representative

Challenges abound in 2009

It’s been a horrific start to 2009 with the Victorian bushfires, floods in other parts of the country and the global financial crisis. Once again we find financial counsellors at the coal face assisting people in dire straits. You have the strong support of AFCCRA Council as you go about that difficult work.

Within its limited resources, AFCCRA is working in a number of areas to try to make sense of the present, and think through how to influence development of the sector to best meet the needs of financial counsellors working with low income, disadvantaged and vulnerable people caught in circumstances beyond their control.

Extraordinary times throw up a range of suggestions for dealing with the emerging crises. The need for accurate, timely provision of information and assistance is thrown into sharp relief. How can the broad range of stakeholders respond effectively and appropriately? Financial counsellors’ experience is invaluable and AFCCRA is taking that perspective to discussions with Government, industry and the community sector.

2009 AFCCRA Conference

The 2009 AFCCRA Conference and External Dispute Resolution Forum will be held in Melbourne at Rydges Hotel, 186 Exhibition Street.

The EDR Forum will be held on Tuesday 28 July, followed by the AFCCRA Conference on Wednesday 29 July and the Financial Literacy and Inclusion Forum on Thursday 30 July.

The programs for the three days are being finalized. Information is available at www.afccra.org  and will be updated regularly.

A focus of the AFCCRA conference will be the changing landscape: the challenges and opportunities it presents. We need to look at the bigger picture within which financial counselling finds itself.

The research by Monash University comparing the Australian model of financial counselling with overseas models is progressing with focus groups and stakeholder discussions. A report informed by a close look at service responses in the UK will be available in the next few months. Dr Charles Livingstone will deliver the key note address at the AFCCRA Conference.

Financial Counselling Foundation

The first funding round of the Financial Counselling Foundation being piloted by AFCCRA commenced on 1 February with applications to be received by 6 March. The Foundation has been established with funds provided to AFCCRA by Westpac, Commonwealth Bank, ANZ, NAB and Abacus. We’ll trial it during 2009 and 2010.

The purpose of the Foundation is to provide grants for projects that will build the capacity of the Australian financial counselling sector, and contribute towards the sector’s long-term sustainability.

The Foundation is managed and administered by AFCCRA with an independent Advisory Committee to review grant applications and make funding recommendations. Applications are welcomed from not-for-profit, community-based organisations incorporated in Australia.

AFCCRA and its member financial counselling state associations are also eligible to apply for grants from the Foundation. However, AFCCRA and the state associations will not be given priority for funding. All applications will be assessed equally on their merits by the independent Advisory Committee. These recommendations will be ratified by AFCCRA Council.

The total funding available in this funding round is $80,000. The minimum grant size is $5,000 (including GST). The maximum grant size is $30,000 (including GST).

Further information including the Guidelines and Application Form is available at www.afccra.org.

Update on the 2009 delivery of the Diploma of Community Services (Financial Counselling)*

The Diploma of Community Services (Financial Counselling) as part of the Community Services Training Package (CSTP) has been undergoing its 5 year review process since July 2005.

An AFCCRA working group has been actively involved, making the only submission on behalf of the financial counselling sector. Our submission’s focus was the specific financial counselling units. This submission has been accepted which means that the new Diploma will have:

Increased emphasis on financial counselling skills and knowledge;
Inclusion in the core units for the Diploma of the ‘Utilising legislation’ unit;
Additional elective units tailored specifically for specialist services, such as rural financial counselling and gambling financial counselling.

The CSTP (including the financial counselling diploma) has been ratified nationally and can now be delivered for 2009 and onwards. Those Registered Training Organisations (RTOs) which are delivering the diploma now have a year to complete the training for those students doing the current diploma and 12 months to implement the CHC08 Diploma.

As the national peak body for financial counsellors, AFCCRA wants to encourage consistent, high quality delivery of the new diploma in a way that maximizes accessibility and flexibility.

To that end AFCCRA has secured funding from the Commonwealth Government and is developing training and assessment materials for the four specific financial counselling units in the new diploma. This work is underway and we expect that the materials will be available by March 2009. These four units are the fundamental skills and knowledge financial counsellors need to work in the field. 

There are 17 units of competency in the new Diploma of Community Services (Financial Counselling). Of the 17 units, there are 13 compulsory units and 4 electives. There is a significant increase in choices for the electives. All 17 units must be completed to be awarded this nationally accredited qualification. As well as the 4 financial counselling units, other units in the Diploma include counselling, advocacy, community education, OH &S.

Registered Training Organisations delivering the Diploma in 2009.

This is the information AFCCRA has in February 2009 about RTOs delivery plans.

Lifeline, Queensland

Information from Jillian Fletcher who co-ordinates the Diploma delivery.
Lifeline is delivering the Diploma and has been doing so for some years. Currently it is being delivered by correspondence to over 40 financial counsellors and students across Australia.

With the new Diploma in 2009, Lifeline plans to develop flexible modes of delivery including online, correspondence, face to face, and in the workplace - most likely a combination of these modes of delivery.

Lifeline plans to deliver the new Diploma from March 2009.
Current costs for the Lifeline delivery are:

• $150 per unit, ie $600 for the four financial counselling units.
  
• $75 per unit for assessment for recognition of current competency (also known as RPL);
  
• 17 x $150 for the full Diploma ($2550.00).

For more information ring Jillian on 0409 223 237 or email her at Jillian.Fletcher@lccq.org.au.

Kangan Batman TAFE

Information from Anna Hedjes, Senior Educator – Community and Residential Services.

From semester 2 in 2009 Kangan Batman TAFE intends to offer the four financial counselling units of competency online. The delivery will use the online materials being developed by AFCCRA and will be complemented with workplace assessments, mentoring and some face to face learning, scheduled alongside major events such as conferences, professional development and the like. The details are yet to be finalised and will be communicated in due course.

Unfortunately, due to funding and policy reforms it’s not possible to be definitive at this time in regard to costing and start dates. However, we are working towards the commencement of the units in mid 2009.

If you are interested in the financial counselling units through online delivery please register your interest with Charmaine Bazouni at Kangan Batman TAFE, 9279 2451. Information on the Diploma page of the AFCCRA website www.afccra.org will be updated regularly.

Queensland gets state government funding for financial counselling!

For the first time, the Queensland Government has made a commitment to funding generalist financial counselling. This is a huge achievement by the Financial Counsellors Association of Queensland.

A substantial and sustained effort by FCAQ President, Jillian Fletcher, was rewarded with an announcement on 8 December of $3 million over the next 18 months. Hopefully this funding will be continuing and increased.

With the doubling of the Commonwealth Financial Counselling Program in the May budget, an increase of $2.4 million a year in WA, and an extra $500,000 a year in NSW, 2008 was an encouraging year. While there was no actual increase in dollars in Victoria, staving off the risk of losing more than $2 million per year brought a sigh of relief.

Of course, more is needed especially in the current economic climate but after slogging away for many years, it’s good to have some return for effort and we need to celebrate that.

AFCCRA’s priority for 2009 is to secure core funding of its peak body functions; as well as to continue to make the case for additional funding for financial counselling services nationally.

For more information on AFCCRA, please access the website at www.afccra.org  - information and contact details are available and we continue to add relevant material to the website as it becomes available.

If you would like to contact Jan Pentland about any of the above, phone 0407 042 483 or email to janpentland@hotmail.com.au

* Eds Note: Financial Counsellors from NSW should see the following Round Up item regarding the training requirements for accreditation in NSW.

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   ITSA: Bankruptcy Amounts and Limits

Description	Limit
Tools: Can keep tools up to this total value if they are used to earn an income	$3,250
Vehicles: May keep vehicles (cars or motorbikes) up to this total amount. Refers to the amount of equity in the vehicle[s] - the vehicle value less the sum owing under finance	$6,500
Credit Limit. The amount bankrupts can borrow without disclosing bankruptcy*†	$4,664
Part IX Debt Agreement Eligibility: Maximum unsecured debts	$82,500.60
Part IX Debt Agreement Eligibility: Maximum divisible property	$82,500.60
Part IX Debt Agreement Eligibility: Maximum income level (net income)	$61,875.45
Registered Trustee Minimum Fee: This fee becomes recoverable if there are     insufficient funds from the sale of a bankrupt’s assets or their income contributions	$1536
Bankruptcy notice: The minimum judgment debt on which a bankruptcy notice can be based	$2,000
Base Income Threshold Amount (BITA) - No Dependents: Bankrupts earning less than this net amount do not have to pay income contributions. The threshold amount increases with the number of dependents, based on a formula linked to the BITA.	$41, 250.30
Official Receiver Allowances: People who travel to meet an ITSA Officer to give evidence or information are entitled to this allowanceτ	$21

* See www.itsa.gov.au for specific details of the ITSA policy regarding credit limits
† Bankrupts cannot obtain credit in certain circumstances, and criminal penalties apply. See www.itsa.gov.au
τ This amount can be claimed in advance when travelling to the meeting by car or plane. See www.itsa.gov.au

   Using the Bankruptcy Contribution Calculator

Step 1. Select appropriate column
Use the column for the correct amount of dependents

Step 2. Obtain gross income.
Calculate the client’s gross income.

Step 3. Calculate net income
Calculate the Tax Payable and the Medicare Levy using the guidelines in the tables at the bottom of the page, and work out how much child support or maintenance the client is paying (if applicable). Subtract those amounts, as well as any other legal deductions, from the gross income to obtain the person’s net income.

Step 4. Calculate assessable income (B)
Add any assessable income items that would increase the person’s net income (e.g., fringe benefits), and then calculate the client’s assessed income for bankruptcy contribution purposes.

Step 5. Calculate income in excess of Actual Income Threshold Amount (AITA) (C)
Subtract the AITA amount (A) from the clients assessable income (B)

Step 6. Calculate likely contribution towards bankruptcy.
ITSA will take 50 cents in the dollar of any excess above the AITA. Divide the income in excess of AITA amount (C) by two. This will give the amount of the contribution towards the bankruptcy that ITSA is likely to ask for.

For further assistance, there are actual examples in Sharkwatch Vol. 5 No. 4 - November 2004. This issue can be found at: www.wesleymission.org.au/centres/creditline/sharkwatch.asp

#Disclaimer: Sharkwatch cannot guarantee these figures are correct at time of printing. Call ITSA to verify calculations

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   Bankruptcy Contribution Calculator: Figures as at January 28, 2009

Base/Actual Income Threshold Amounts (BITA/AITA)

No. of Dep- endentsτ	0	1	2	3	4	4+
A BITA/ AITA  Per Year	$41,250 .30	$48,675 .35	$52,387 .88	$54,450 .40	$55,275 .40	$56,100 .41
Est. Gross†  Per Year	$51.460	$62,299	$67,718	$70,730	$71,934	$73,139
Est. Gross†  Per Week	$990	$1,198	$1,302	$1,360	$1,383	$1,407
Est. Net  Per Week	$793	$936	$1,007	$1,047	$1,063	$1,079

Contribution Calculator
Total Gross Income (Year)
LESS
Medicare levy
Taxation
Child Support
Maintenance
Other deductions
= Net income
PLUS
Fringe Benefits
Other
B: = Asssessed Income
C: Income over AITA (B-A)
D: Likely contribution (C/2)

τ Dependents’ Allowable Income is $2,939
† Corresponding gross income if the only deductions are tax and Medicare levy and there are no other assessable benefits
* Levy may increase to 2.5% if client’s income is above Medicare Levy Surcharge threshold, plus no private health cover.

Base Tax Rates (from July 1 2008; less Medicare levy)

Taxable Income	Tax	% on excess
0	0	0
6,000	0	15.00%
34,000	4,200	30.00%
80,000	18,000	40.00%
180,000	58,000	45.00%

Medicare Levy*

Income	Medicare Levy (%)
17,308	0
17,309-20,363	1.0%
>20,364	1.5%*

See ATO website www.ato.gov.au for full details about Medicare levy exemptions and surcharges

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   Round Up

New South Wales

Financial Counsellor training requirements in NSW

Vicki Geraghty, the President of FCAN, has sent the following note regarding training requirements for financial counsellors in NSW.

“Financial Counsellors in NSW wanting to complete the Diploma of Community Services (Financial Counselling) are welcome to do so. However, to become accredited with the Financial Counsellors Association of NSW (FCAN) they are required to complete the FCAN Training Course which is run on a mostly face-to-face basis with accredited FCAN trainers. This course has been developed solely to train financial counsellors and is currently funded by the NSW Office of Fair Trading.”

FCAN Office now open and manned

The Financial Counsellors’ Association of NSW—FCAN— has opened its new office and appointed Shafiq Said as the new FCAN ‘Manager—Administration’.

The FCAN office address is:
Suite 114 / 410 Elizabeth Street,
Surry Hills, NSW, 2010
Phone: 1300 914 408
Fax: 02 9212 4481
Email: admin@fcan.com.au

The office hours are currently Monday – Friday from 9am to 4:30pm.

The President of FCAN, Vicki Geraghty, can be emailed on vicki.geraghty@fcan.com.au and Shafiq can be contacted direct on shafiq.said@fcan.com.au.  

FCAN asks for members’ patience as they start to establish the office records and so on, and remind  members that they will all be contacted by Shafiq as he gathers updated information on members and  agencies. Vicki Geraghty notes that “this is very exciting as we will finally be able to map financial counselling in NSW!”

FCAN conference in May.

The FCAN Annual Conference will be held from Sunday May 24th to Wednesday 27th May 2009.

The conference will be held at the Greenmount Beach Resort at Coolangatta (Eden Avenue, Coolangatta, Queensland, 4225. Phone (07) 5536 1222 or (07) 5536 1102, or email sales@greenmountresort.com.au for information).

Sessions include a discussion of emerging telecommunications issues with the Telecommunications Industry Ombudsman and her staff, information on working with clients in crisis, a keynote address by Clare Martin, the CEO of ACOSS, a case conference with expert input from ITSA and the TIO, an ITSA session focusing on tax debts and small businesses, and mock sessions of a CTTT hearing, a bankruptcy creditors hearing and a civil debt hearing.

Financial Counsellors from other states are welcome to attend. Please contact Shafiq Said for more information on 1300 914 408 or admin@fcan.com.au.

Queensland

At last! State government funding in Queensland

A December 8 2008 press release from the Queensland Premier, Anna Bligh, notes a $3million initiative to fund generalist financial counselling services in Queensland. All money will go to Lifeline Queensland.

Jillian Fletcher, the President of the Financial   Counsellors’ Association of Queensland (FCAQ), has responded by saying “at long last a breakthrough on [the] funding of financial counselling by the Queensland Government. … This represents the first funding for generalist consumer financial counselling service delivery in the  history of Queensland [by the State Government] and the FCAQ can now look forward to building on this positive outcome to meet the financial counselling needs of Queenslanders.… This is a great way to end the year for the association in respect to increasing service capacity in Queensland - from both the state and federal governments”.

This is wonderful news.

Victoria

TIO forum with Victorian Financial Counsellors

The Telecommunications Industry Ombudsman will be holding a forum with Victorian financial counsellors to exchange experiences and information about telco issues.

The TIO envisages that the discussion will encompass the sorts of telecommunications issues affecting consumers, and how these are being handled by the TIO, financial counsellors, and the industry.

The forum will be held on Tuesday May the 19th at the TIO offices, level 3, 595 Collins Street, Melbourne, between 10.30 am and 2 pm. Lunch will be provided.

Those who wish to attend should contact the FCRC on 03 9663 2000 or admin@fcrc.org.au.

Can NSW FCs Help?

Researchers from the Children and Families Research Centre at Macquarie University are wanting to talk to financially disadvantaged families about their experiences in engaging with early childhood services. We are interested in conducting face-to-face interviews at a time and place convenient to the family. Our questions focus on whether or not families see early childhood services as important, their experiences in approaching and maintaining engagement with these services, and how their family could be better supported whilst their child/ren are in the early years.

Can you help us find families who:

• Have at least one child who is 3 – 5 years old (not yet started school)
  
• Live in one of the following areas in NSW: Mt Druitt, St Marys, Wollongong, Nowra, Taree, Kempsey, Tweed Heads, Bathurst, Broken Hill
  
• Experience economic hardship

Participating families will receive a $20 Coles/Myer gift voucher and a book for their child.

If you are able to assist in finding families for this research please contact Dr Rebekah Grace (phone: 02 9850 9827, email: rebekah.grace@aces.mq.edu.au).

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   In the Media

Witch hired as debt collector in Lithuania ...

Original story: Firm hires witch to hunt debt dodgers

We at Sharkwatch were a little alarmed to hear of a new development on the debt collection front in Lithuania. The debt collecting bureau Skolu Isieskojimo Biuras has hired Lithuania’s ‘most famous self styled witch’, Vilija Lobaciuviene, to ‘hunt down companies and individuals who are failing to pay their debts amid the credit crunch’.

A spokesman for the company, Amantas Celkonas, noted that ‘our new employee will help them to understand the situation, reconsider what is right and wrong, and act accordingly…’

Debt collection companies are well known for using the tactic of trying to terrify debtors, but this is surely a new low. One can only hope that Australian agencies do not take up this new precedent and hire the services of resident witches and other assorted occultists, warlocks, necromancers and sorcerers.

Sydney Morning Herald, January 16 2009

Women shopping themselves bankrupt

Original story by Catherine Caines

“Young Australian women are literally shopping until they drop, forgoing food and bill payments to feed their addictions to the latest designer clothes and shoes.

“Ignoring empty bank balances and poor economic forecasts, the "urge to splurge'' generation of 18- to 35-year-old women have become binge shoppers, caught in a web of spiralling debt. Driven by a new wave of   influential high-end fashion magazines and celebrity role models, they are maxing out their credit cards on uncontrolled shopping sprees. Trends are changing faster than ever but the self-confessed shopaholics aren't interested in seasonal sales or bargain buys. The latest designer item is their priority -- but it comes at a heavy price.

“According to the Insolvency and Trustee Service Australia's annual report, over 10,763 women declared themselves bankrupt in the 2006-2007 financial year, up from 7000 in 2005. In 2006, almost a third of a record number of 3.7 million credit card applications were from 18- to 27-year-olds.

“But for "fashion lover'' Kat Hartmann, editor of the online culture site Kluster, owning the latest trends is a lifestyle priority. "For kids in the scene there is more about `I need to prioritise my life around what I'm wearing and what I'm buying' rather than what I'm paying for,'' Ms Hartmann, 24, said.

“Ms Hartmann admits her fashion habit bites into her life's essentials. "Most definitely. Just recently I got  myself a pair of Ksubi biker boots that were definitely out of my budget for that week but that's what I wanted and that's what I ended up spending the money on. That week my phone bill was delayed because of the last pair of boots -- I wanted them.''

“"It's a lot to do with the celebrity worship and looking at what stars wear and generally looking at others to model themselves on,'' says psychotherapist Odelia Carmon, who specialises in women's issues. "Looking for the answers outwardly rather than inwardly, looking at happiness through purchasing.''

“Online fashion sites, magazines and films like The Devil Wears Prada are driving the increasing "spend now, pay later'' climate, sending ever-growing numbers of young women into a treacherous cycle of binge shopping.

"The introduction of the Internet means everything needs to be more updateable on the retail sense, the range has to come out quicker and people are really impatient these days, they don't stick around so much,'' Ms Hartmann said. "There is also the easy ability for us to be financed these days ... in our grandparents' day they saved, then purchased. Now we purchase and pay later.''

“Christopher Zinn, spokesperson for independent watchdog Choice, says ... the culture of designer label worship is on the rise.  "Young women have more and more disposable incomes and so they are very skillfully targeted by the marketers and the designers to entice them into buying must-have products from iPhones to shoes,'' Mr Zinn said.”

Sunday Telegraph, August 19, 2008

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