Sharkwatch April 2001

Direct debits

by Jan Pentland

As we are aware there has been somewhat of an explosion in the use/abuse of direct debit authorities recently. It has become the payment method of choice by many credit providers and sometimes the loan (or mobile phone contract) is contingent on the borrower signing a direct debit authority to make the payments.

Recently at Banyule Community Health, Victoria we've again had some difficulty with getting banks to cancel direct debit authorities at the request of the account holder - their customer. I took this issue up with Colin Neave, the Banking Ombudsman last year on the basis of my belief that it is the account holder's money, and they have the right to decide what happens with their money in their account. The primary relationship of the bank should be with their customer regardless of any relationship with a third party who may have a direct debit authority.

Colin agreed with my view, which is also the position of the ABIO as set out in their Bulletin 24, March 2000. Despite third parties now holding the authority in many cases (pages 4 & 5), the Bulletin states on page 6 that "The new arrangements do not override a customer's entitlement as between itself and the bank to withdraw any authority given to a third party by notice to the bank or instruct his or her bank not to accept a particular debit request." and further states that "While it is desirable that a third party debit user be notified by the account holder of any withdrawal of authority, and while DDR service agreements will request customers to direct such requests to the debit user, a bank is required to comply with any instruction from its customer countermanding a DDR, whether or not that instruction has also been sent to the debit user."

This is pretty clear, I think, yet I had a Commonwealth Bank branch refusing to cancel a direct debit at the request of the account holder, my client. He then contacted GE Finance who cancelled it at their end while I clarified the matter with the ABIO and then with the complaints section at CBA head office. The bank branch in question then did a back flip and contacted my client with an apology. I understand that that branch and hopefully others will receive additional training on this.

If you would like a copy of Bulletin 24 and a Bank Contact List for their consumer liaison/complaints sections, contact the ABIO on (03) 9613 7373 or 1800 337 444.

Jan Pentland is a financial counsellor at Banyule Community Health Centre in Victoria. The above is an article taken from the April edition of the newsletter ‘Devil’s Advocate’ produced by the Financial and Consumer Rights Council of Victoria.

Dear Bank Manager

A polite letter of thanks I am writing to thank you for bouncing the cheque with which I endeavoured to pay my plumber last month. By my calculations, some three nanoseconds must have lapsed between his presenting the cheque and the arrival in my account of the funds needed to honour it. I refer of course, to the automatic monthly deposit of my entire salary, an arrangement which I admit, has only been in place for eight years.

You are to be commended for seizing that brief window of opportunity and also for debiting my account by $50 by way of penalty for the inconvenience I caused to your bank. My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways.

No more will our relationship be blighted by these unpleasant incidents, for I am restructuring my affairs in the second half of the year taking as my model the procedures, attitudes and conduct of your very bank. First, I have noticed that, when I try to contact you I am confronted by the impersonal ever-changing, prerecorded, faceless entity which your bank has become. From now on I, like you, choose only to deal with a flesh and blood person. My mortgage and loan repayments will, therefore no longer be automatic, but will arrive at your bank, by cheque addressed personally and confidentially to an employee of your branch, whom you must nominate.

Please find attached an Application Contact Status which I require your chosen employee to complete. I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me. Please note that all copies of his or her medical history must be countersigned by a justice of the peace and that the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof.

In due course I will issue your employee with a PIN which he/she must quote in all dealings with me. I regret that it cannot be shorter than 28 digits but, again, I have modeled it on the number of button presses required to access my account balance on your phone bank service. As they say, imitation is the sincerest form of flattery.

Let me level the playing field even further by introducing you to my new telephone system which, you will notice, is very much like yours. My authorized contact at your bank, the only person with whom I will have dealings, may call me at any time and will be answered by an automated voice. By pressing buttons on the phone, he/she will be guided through an extensive set of menus:

To make an appointment to see me
To query a missing repayment
To make a general complaint or inquiry
To transfer the call to my living room in case I am there
To return to the main menu and listen carefully to options 1 to 8

On another note, we come to the matter of cost. As your bank has always pointed out, the ongoing drive for greater efficiency comes at a cost. A cost which you have always been quick to pass on to me. Let me repay your kindness by passing some costs back.

First, there is the matter of advertising material you send me. This I will read for a fee of $20 per page. Inquiries from your nominated contact will be billed at $5 per minute of my time spent in response. Regrettably I must also levy an establishment fee to cover the setting up of this new arrangement.

Best wishes
Your Humble Client

The forgotten duty of care: Looking after oneself

By Wayne Warburton (Credit Helpline, NSW)

The lack of self-care is a constant problem amongst practitioners in the counselling professions. Counsellors often work in situations where demands on their emotional resources are heavy and constant throughout the working day (and sometimes beyond). If these stresses become too much for the individual, they can result in professional and personal impairment for the counsellor, and can lead to many problems. Whilst a lot of attention is given to burn-out and depression in counsellors, there tends to be less focus on other areas of impairment, such as reduced professional performance, the development of inappropriate relationships with clients and the overuse of alcohol and pharmaceuticals/drugs in order to cope. The NSW registration board for psychologists sees self-care problems as being so important for their members that they have worked with the NSW government to legislate self-protective practices into law, under the ‘NSW Psychologists Registration Board Code of Ethical Conduct’ (1997; Section D). Although there is no legally binding duty of self-care as yet for most counselling professions, the issue is no less important for us.

For a counsellor, the tools of trade include (amongst other things) communication skills, empathy, problem solving ability and experience. Additionally, a counsellor needs the motivation, energy, wisdom and self-awareness to use these tools effectively. Because all of these things come from the self, it seems reasonable to suggest that a counsellor must take good care of the self in order to function effectively with clients.

Recent research from Janet Coster, Milton Schwebel and various others seems to indicate that a number of areas are central to a counsellor’s well-being:

1) The support of peers is important. Counsellors often need to be able to speak to others who have experienced similar stresses and dilemmas. This may not always be straightforward to arrange, as many financial counsellors work in areas where peers are few and far between. For this reason, regular meetings with other financial counsellors from your region may be an important resource, along with attendance at conferences and seminars. Peers are also available by phone. Call other counsellors in your area or, find out from your State Association who might be available to support you. Some counsellors may also find benefit from meeting with local peers from other counselling disciplines, such as gambling, family or personal counselling services.

2) Stable personal relationships and social support are also important for a counsellor’s well-being. They provide security and companionship in everyday life, and stability in times of crisis. It is quite normal for counsellors to have problems with relationships periodically (e.g. to experience difficulties within their marriage/ partnership or with their wider family), and at these times it is desirable that other relationships are intact. A great deal of recent research has found that social support (the support of family, friends or social contacts) plays a very important role in the physical and emotional health of all people, and I suspect that future studies will identify social support as being vital to the health and professional performance of counsellors from all disciplines. Counsellors who find themselves isolated usually benefit greatly from seeking out the support of others. Possible avenues of contact include community or church groups, clubs and professional organisations.

3) Good supervision is vital. A supervisor can often detect the early signs of poor coping, performance decline, distress, or impending burnout in their supervisees well before the counsellor in question becomes personally aware that a problem is occurring. Supervisors can also advise and share the load when difficult situations arise, and may be a valuable voice of reason when emotions run high in a crisis situation. A supervisor should have input into all difficult decisions, and especially those which involve professional ethics, such as whether to disclose confidential information about a client to the authorities, whether a relationship with a client is appropriate, or what to do if you believe a client is a danger to themselves or others.

4) A balance between work and recreation is also important. Sometimes it seems that clients need a great many things to be done now in order to avert a disaster - so many things, in fact, that there is no time for leisure. Recovery time and personal time in your life schedule are highly important, and should be given priority. It is usually possible to prioritise work actions so that all vital functions are performed and there is time left over for personal activities. If it is a struggle to do this, your supervisor is an appropriate source of assistance.

5) Continuing education is valuable for all counsellors and is a legally binding requirement for psychologists. Financial Counsellors of some State Associations are also required to demonstrate a certain level of ongoing education before they can be re-certified each year. Financial counsellors who keep up to date with relevant issues and continue to sharpen their counselling skills tend to be and to feel professionally competent, and to thus feel more settled and happy at work.

6) Strategies for coping should be part of every counsellor’s armoury, and should be thought out and in place prior to crises or heavy work loads occurring. These can involve:

(Away from work): holidays, relaxation, rest, time with family and/or friends, time alone, physical exercise;
(At work): exercise and stretching, regular short breaks, meditation and relaxation exercises, debriefing with others after difficult sessions, friendly contact with workmates, taking time to just read the paper or wind down in another way, even when work matters are pressing;
(Self): Personal belief systems may help counsellor make sense of their experiences at work and help them to cope with the distressing situations they sometimes encounter.
Personal counselling and therapy have both been shown to be powerful aids for coping with, and making sense of, situations encountered at work.

There are a number of signs that personal or professional impairment may be approaching:

high levels of dissatisfaction and/or tension
irritability
boredom
withdrawal
loss of energy
feelings of aggression towards clients
sexual impulses towards clients
strong feelings of failure
increased use of alcohol, prescription drugs or illegal drugs.

This list is not comprehensive, and these symptoms do not necessarily mean that a counsellor is heading for trouble. Nevertheless, counsellors experiencing any of the above symptoms to a degree that distresses or disturbs them should consider taking action towards greater self-care.

Such action may take a number of forms. For example, a counsellor may imagine that they are a client, analyse why they are experiencing a particular problem (e.g. irritability), and then reflect on what they would advise that client to do in a similar situation.

If such a strategy does not work, it may be valuable to talk openly and honestly to a trusted peer and/or to your supervisor. If this also is not helpful, then personal counselling and/or therapy may be advisable. In such a situation it is important to keep a positive and balanced perspective; personal counselling is a common consequence of working in a demanding, caring profession, and such assistance is regularly sought by a great many competent and respected counsellors and mental health professionals.

Early intervention seems to be the key to self-care. If potential problems are identified early and dealt with, they are much easier to sort out, and are less likely to compound with other problems. Many undesirable outcomes can be averted simply by being aware that self-care is important, and arranging life as a counsellor with self-care as a very high priority.

References and further reading:
Coster, J.S., & Schwebel, M. (1997). Well-functioning in professional psychologists. Professional Psychology: Research and Practice, 28, 5-13.
Hoenk Shapiro, C. (1982). Creative supervision: An underutilised antidote. In W.S. Paine, (Ed.), Job stress and burnout: Research theory and intervention perspectives Beverley Hills: Sage publications.
Maslach, E., & Jackson, S.E. (1982). Burnout in health professions: A social psychological analysis. In G. Saunders & J. Suls (Eds.), Social Psychology of Health and Illness, Hillsdale, N.J.: Erlbaum and Ass.
Skorupa, J., & Agresti, A.A. (1993). Ethical beliefs about burnout and continued professional practice. Professional Psychology: Research and Practice, 24, 281-285.

Wayne Warburton is a financial counsellor from Credit Helpline NSW, and is studying psychology at Macquarie University. His research on suicide has led him to a particular interest in the well-being of both counsellors and their clients.

QUEENSLAND

The Financial Counsellors Association of Queensland (FCAQ) Annual Conference was held in Brisbane on Thursday 8th and Friday 9th March this year and the theme was “Towards a Positive Future”.

The conference was well-attended with Financial Counsellors from all over Queensland as well as some from as far away as South Australia (Hugo Antezana) and from the Northern Territory (Dianna Bessell and Cheryl Cryer). Others who attended from long distances were Sue Cook (Cairns), Saskia ten Dam ( Townsville) and Margaret Clements (Rockhampton).

Matt Miller, the Commissioner of the Department of Fair Trading opened the conference and spoke about the “Achievements of, and Challenges for, Government in Consumer Protection”. The annual general meeting of FCAQ was held on the first day of the conference with Greg Mowle from Lifeline at Capalabar (07 3823 2555) elected as the new President.

NEW SOUTH WALES

The Financial Counsellors Association of NSW held their annual conference in Bathurst this year from 18th to 21st April at the attractive campus of Charles Sturt University. The theme of the conference this time was “Building a Future on the Lessons of the Past” in keeping with the year of Federation. The conference was opened by the Independent Federal Member for Calare, Peter Andren who spoke about the social and economic impact currently being felt in rural areas and towns outside the major cities.

FCAN’s AGM was held the month before the conference this year as it was thought that it would allow members more time for general discussion on important issues during the time allocated for a meeting at the conference.

Russell Franks of Creditworthy, Wollongong (02 4229 4711) was elected President of FCAN for a third successive year.

Also news from NSW – the founder and long time leader of Credit Line in Sydney, Betty Weule has retired after making an enormous contribution to the field of financial counselling for over twenty years. Tony Devlin has now taken over as manager of Credit Line after working as Senior Facilitator on the Commonwealth Financial Counsellors Program for the last three and a half years.

SOUTH AUSTRALIA

Rosie Atkinson from South Australia reports that the Adelaide Central Mission, SA has received a grant to develop and facilitate the delivery of three basic financial counselling courses in 2001. The first of the three courses is well under way with a second course scheduled to begin at the end of May. A condition of entry into the course is that trainees have access to supervised casework supervision for a period of 12 months.

Currently there are 12 new counsellors being trained. The courses run one full day per week for 15 weeks.

When trainees complete the supervision phase they will be in a position to apply for accreditation through SAFCA. This will ensure ongoing accreditation for agencies who are already accredited, and will enable new agencies to apply for their accreditation once their newly accredited worker has been with that agency for a period of 12 months.

Kevin Woon, from Coober Pedy says that the Coober Pedy Multicultural Community Forum is a really exciting place to work at the moment. They have been successful in obtaining two new grants which will provide for a library and also a part time worker to help with literacy and numeracy problems in the culturally diverse community of Coober Pedy. His involvement with the Community Newspaper and Community Radio has also provided a wonderful opportunity to advertise the services of the Coober Pedy Financial Counselling Service and to provide information to the community.

Big smiles from all at the highly successful Remote and Isolated Financial Counsellors Conference held in November last year. Counsellors who came from far and wide were - Standing: John Mumford (Wonthaggi, VIC) Abdulla Adam (Perth), Sue Cook (Cairns), Charles Dawborn (obscured Bendigo, VIC) Graham Lockey (Gympie, QLD), Tony Devlin, Kevin Rolfe (Alice Springs), Steve Ackland (Dubbo, NSW), Saskia ten Dam (Townsville, QLD) Dianna Bessell (Katherine, NT), Margaret Clements (Rockhampton, QLD), Kevin Woon (Coober Pedy, SA) Seated: Anita Seery (Meekatharra, WA) Peter Carratt (Wagaman, NT) and Kirsten Horne (Conference Organiser)

VICTORIA

Barbara Romeril, Executive Director of the Financial and Consumer Rights Council in Victoria says in her editorial for “Devil’s Advocate” this month that ‘acting on behalf of vulnerable consumers through advocacy and supporting member agencies, sometimes feels like being a juggler with lots of balls in the air at once.’ These are some of the things they are and have been involved in recently:

Debating the banks on what their social responsibilities are
Assisting members to respond to the opportunity to review service models in the Consumer Support Program
Campaigning for increased recurrent funding to financial counselling services
Participating in the campaign to stop payday lenders exploiting poor people in need of credit
Dealing with a dramatic increase in callers to the state-wide telephone referral service, as more and more vulnerable consumers hear of the services

NORTHERN TERRITORY

Darwin is struggling to keep their local ITSA office open. Cheryl Cryer, a financial counsellor from Anglicare in Darwin, says enquiries they receive about bankruptcy have increased alarmingly over the last few months and she is fighting to stop ITSA closing their office there. This would mean lodging bankruptcies in the Northern Territory through South Australia, leading to complications and difficulties. Cheryl is also busy organising the first Northern Territory Financial Counsellors conference to be held sometime in June and has invited ITSA to attend.

WESTERN AUSTRALIA

Jacinta Laffer from Western Australia reports the Financial Counsellors Resource Project in Western Australia has produced a book “When the Repo Man Comes” written by their Projects contract solicitor Ian Macdonald.

This colourful book has been designed to catch the attention of consumers and to set out in straightforward terms the protections which the Credit Code offers consumers in the event of harsh or oppressive actions by lenders. The book is based on information gathered by Ian in travelling to remote communities in WA discussing in detail with financial counsellors and their clients the sort of problems encountered and the resources they need.

Limited copies of the book can be obtained from the FCRP in WA tel 08 9221 9411 or fax 08 9221 9422 or email: fcrp@iinet.net.au�

Any contributions to “Round Up” would be most welcome. Our aim is to include some news from each state and territory. Contact Jean Lewis on 1800 647 409 if you have anything you would like to have included. Alternatively, you can email to: jean.lewis@wesleymission.org.au

The Law Matters

CORPORATIONS LAW— CREDITOR’S DEMAND FOR STATUTORY PAYMENT

By Chris Joyce, Solicitor, Credit Helpline NSW

Under section 459E of the Corporations Law, a person may serve on a company a statutory demand relating to a debt of $2,000.00 or more. So long as the company has assets and is trading, this can be an extremely effective way of getting a company to pay a debt. Once the statutory demand has been served the company has only 21 days to either defend the claim in the Supreme or to pay the debt. If neither the debt is paid nor an application made to the Supreme Court to set aside the statutory demand (S.459G), then the creditor may apply to the Court for the debtor company to be wound up. If the creditor’s application is granted then a liquidator may be appointed .

Accordingly, it is absolutely crucial that when a solvent company is served with a statutory demand for payment of a debt, that it either pays the debt in full immediately, or that it files within 21 days an application to set aside the demand at the Supreme Court. It should be noted that this 21 day time limit is usually very strictly applied.

As with Bankruptcy Notices the creditor must strictly comply with the procedure when completing the statutory Form 509H and accompanying affidavit.

Generally speaking the creditor has only 6 months to apply to the court for the debtor company to be wound up. The period can be extended. The notice can be served on the company in a variety of ways (S.109X), including leaving it at, or posting it to, the company’s registered business address.

In regards to company debts, it should also be remembered that directors may be made personally liable for the debts of their company if they have allowed the company to trade whilst insolvent.

GAMBLING PROVIDER’S CONDUCT ‘UNCONSCIONABLE’

By Richard Brading, Principal Solicitor, WCLS

“I’m going to sue the club/hotel/casino” is a phrase often heard from problem gamblers or their families. It is a reflection of the anger felt by the victims of gambling when they feel they have hit rock bottom.

Until recently, the suggestion that a gambler might win a case was treated with ridicule by the gambling industry, some of whom still deny that problem gambling even exists.

The case of Famularo v Burst P/L (O’Malley’s Hotel), is the first case in which a problem gambler has been successful in obtaining damages against a hotel for unconscionable conduct under s.51AB Trade Practices Act.

Between April and November 1997, O’Malleys Hotel at Kings Cross provided Famularo with a total of $67,770.50 in cash advances on his American Express charge card in 226 transactions. All of this money was gambled and lost by Famularo on the hotel’s TAB and poker machines.

The provision of cash advances for gambling was a breach of the Liquor Act N.S.W. In earlier proceedings before the Licensing Court, O’Malleys had been found guilty of breaching the no cash advances condition of its hotelier’s license and fined $7,500.

The cash advances were also a breach of the merchant’s agreement between O’Malleys and American Express. AMEX cards (other than the blue credit card) are only available to pay for purchases of goods and services, and cash can only be accessed at AMEX offices in emergencies.

Staff had misrepresented to Famularo that the cash advances were “no problem”. The licensee, Phelim O’Brien, had admitted to a government inspector that he had installed an EFTPOS terminal in the hotel’s Las Vegas Lounge, specifially to be used by Famularo.

Famularo had told the licensee, Phelim O’Brien, that he had a gambling problem and had banned himself from Star City Casino.

Judge Terry Naughton said “I find that if the defendant had been told by the hotel or staff that he was not permitted to get cash advances from the hotel against his Amex card, he would have accepted that and consequentially, the transactions would not have occurred. As a matter of commonsense, the hotel knew or should have known the defendant was a problem gambler.”

The staff had also induced Famularo to remain in the hotel and thus increased the frequency of his gambling. The judge found that by reason of the misrepresentations, O’Malleys Hotel had to compensate Famularo for the cash advances.

The judge also stated that alcohol had increased the gambling losses. Famularo had drunk to the point of moderate to heavy intoxication while gambling.

Judge Naughton was critical of the hotel and its licensee, Phelim O’Brien and ordered that the hotel pay the outstanding amount of the American Express charges plus interest, a total of $85,043.44.

After the case, Famularo was quoted as saying “This case has stopped me gambling totally, believe me, I’m never going to gamble again.”

O’Malley’s have filed an appeal.

The case does not establish a duty of care towards problem gamblers. The judge in a previous case of Reynolds v Katoomba RSL Club held that there was no duty of care. Reynolds appeal is due to be heard in May.

What is important is that gambling providers can be held liable for unconscionable conduct particularly misrepresentation, in a similar way to other businesses. Knowledge of a gambling problem, alcohol consumption and provision of credit are important factors, but not sufficient to win a case on, alone.

PAY DAY LENDING UPDATE

By Mathew Deighton

At present, the Uniform Consumer Credit Code (UCCC) does not regulate loans of less than 62 days duration, and thus there are no requirements on pay day lenders to conform with any of the Code’s disclosure requirements, and consumers are left without important protections (eg. over securitisation prohibition provisions) or avenues of recourse (eg. applications to have a loan contract reviewed).

The push for regulation

In 2000 various consumer groups, such as Queensland Legal Aid, the ACA, financial counsellors and community legal centres campaigned to have the pay day loan industry regulated by bringing it within the operation of the UCCC regime.

The issue was taken up by the Ministerial Council of Consumer Affairs, with all State and Territory governments agreeing that the UCCC needed to be amended to allow regulation of the pay day lending industry. This resulted in the development of a draft bill.

A State and Territories co-operative arrangement underpins the UCCC with any amendments to the UCCC being passed in the Queensland parliament. The 2001 Queensland State election has delayed the development of the Bill and at the time of writing the Bill had not yet been introduced into the Queensland parliament.

Thus, at this stage the pay day lending industry remains unregulated!

The delay in the passage of the Consumer Credit (Queensland) Amendment Bill has concerned consumer groups as it has allowed the pay day lending industry to continue its expansion thereby exposing more consumers to their nefarious lending practices and increasing the industry’s political power (the ‘regulation means job losses’ mantra).

In early 2001 the consumer lobby decided to step up its campaign against pay day lenders. A highlight of the campaign was a day of protest in NSW and Victoria on 3 April 2001. On that day the NSW Fair Trading Minister, John Watkins MLA, announced that NSW would not wait for Queensland to pass amending legislation, and would ‘go it alone’ and introduce legislation immediately to regulate the industry.

On 10 April 2001 the Minister introduced the Consumer Credit (NSW) Amendment (Pay Day Lenders) Bill 2001 into the NSW parliament.

Regulatory proposals

A. Consumer Credit (NSW) Amendment (Pay Day Lenders) Bill 2001.

The Bill extends the operation of the UCCC to include loans where:

the provision of credit is limited to a total period of less than 62 days; and
credit fees and charges exceed 5%; and
interest charges exceed 24% per annum

The Bill partially addresses the issue of disguising interest charges as “credit fees and charges”, stating that “[i]n the case of a short term credit contract, the regulations may require interest charges and all credit fees and charges under the contract to be included for the purpose of calculating the maximum annual percentage rate … ”

Thus, whilst the NSW Bill recognises that pay day lenders do disguise interest charges through the imposition of excessive credit fees and charges the use of “may” indicates that the NSW government has yet to commit itself to the adoption of an extended meaning of “interest” and therefore pay day lenders may continue to escape regulation.

B. Draft Consumer Credit (Queensland) Amendment Bill 2001

The draft Queensland Bill could be described as ‘minimalist’ at best, and a waste of time at worst.

The Bill adopts the same threshold test as the NSW Bill for determining the applicability of the Code to pay day lending, with the main point of departure between the two Bills being that the Queensland Bill does not address the issue of pay day lenders disguising interest charges as “credit fees and charges”.

Given that Schedule 1 of the UCCC makes it clear that “credit fees and charges” are distinct from interest charges, defining the former as “fees and charges payable in connection with a credit contract or mortgage, but does not include…interest charges “ it is likely that under the Queensland amendments pay day lenders will escape regulation as long as they only charge borrowers “credit fees”, as opposed to interest, no matter how excessive the “fees” are.

In other words, under the draft Queensland amendments, only those pay day lenders stupid enough to charge borrowers interest and credit fees and charges, will actually be regulated!

Without stipulating that for the purposes of short term loans all credit fees and charges are to be included in the calculation of the annual percentage rate of interest, the Queensland amendments offer very limited protection for short-term borrowers.

Conclusion

Whilst consumer groups are pleased that pay day lenders are likely to be regulated by the UCCC, the NSW Bill has the potential to provide much better protection for short term borrowers than the Queensland Bill does.

However, the effectiveness of any proposal to regulate the pay day lending industry will largely depend upon the definition and interpretation of “interest charges”.

Mathew Deighton is a solicitor with Redfern Legal Centre, NSW

AFCCRA UP-DATE

By Jan Pentland

The Annual General Meeting of the Australian Financial Counselling and Credit Reform Association (AFCCRA) was held by teleconference on 30 April 2001. The outcome of election of Office Bearers from the state nominated AFCCRA Council members is:

Chairperson - Jan Pentland (Victoria)
Secretary - Rosemary Warren (South Australia)
Treasurer - Lola Mashado (Queensland)

Council members for other states and territories are Paul Guinane (ACT), Phillip Powell (Tasmania), Pam Richardson (Western Australia), Peter Carrat (Northern Territory), Jennifer Gracie (New South Wales).

AFCCRA representatives were confirmed for the Bankruptcy Reform Consultative Council (Jennifer Gracie), Telstra Consumer Consultative Council (Lola Mashado), Optus Consumer Consultative Council (Ann Marie Paulsen), Credit Helpline Board (Jo Boltin), Consumer Law Centre Victoria Board (Barry Hahn).

Membership fees were set at $50 for State Associations with 10 members or more, and $25 for those with less than 10 members.

AFCCRA’s policy priorities, given its very limited resources, continue to be bankruptcy and telecommunications. The Council is also working hard in establishing and maintaining effective information networks within and between states and territories. Regular input into this newsletter will be part of that process.

If you would like to discuss any of the information or issues above, or any other matters pertaining to AFCCRA, please contact the Chairperson, Jan Pentland on (03)9450 2070 or e-mail jan@bchs.org.au

Teleconference Dealing with Casework Demands

by Kirsten Horne (Credit Line Sydney)

On 20 November 2000 a teleconference was held for financial counsellors from around Australia to discuss the issues of dealing with the demands of casework. The issues discussed are shown below and are generally relevant to most Financial Counsellors.

The financial counsellors represented a variety of small and large agencies and came from both management and counsellor roles. Most participants described themselves as having a moderate caseload but also agreed that there had been times when it had been heavy. Some counsellors had telephone casework as well as face to face clients and some had financial counsellors not consumers as their clients.

Pitfalls

Burnout was identified as the biggest direct pitfall for counsellors. It was also generally agreed that poor client service was a likely outcome as a result of this. Clients may not get all their options presented when a counsellor is under pressure.

One of the difficulties highlighted was casework demands as a part time counsellor. Follow up work is hard to do and some described how their agency copes with this by providing continuity and supervision through two part time Co-ordinators. They are able to handle any urgent matters for workers between shifts and also provide supervision at the same time.

Planning Ahead

Consider helping fewer clients well, but this can result in real or perceived pressure from funding bodies or management.
For full time counsellors, no more than 4 days/wk caseload - leaving one day for admin, meetings, supervision
See new clients only in the morning. Ongoing and follow-up/supervision/consumer education in the afternoon.
Agency set up with full time resource worker for part time volunteer counsellors to ensure continuity for clients.

Handling Pressure

Consider using “do not disturb” functions on your telephone
Use of an electronic diary, or setting time limits to client sessions, number and length were considered important
Some agencies used an answering machine to help review and prioritise calls.
The importance of educating other co-workers and management in your role and what the pressures are

Strategies for coping

Good supervision as well as good self care practices
Acknowledging your own limitations
Making sure that you and not the client set the agenda
Keeping variety in your work
Delegate to appropriate staff where possible
Do not attempt to achieve too much too soon.
Do not book clients too far in advance two weeks in advance should be the maximum.
Some agencies interview clients over the telephone first to help to identify the major issues
Volunteers can be used to help but setting this up can take time and needs a lot of overseeing.
Ensure that case notes are written up in work hours
Importance of a relationship with management (as well as yourself) which gives you “permission” to ease off if you need to.

Last minute update on bankruptcy changes

By Betty Weule

The Government are still hoping to get the new legislative changes, the Bankruptcy Legislation Amendment Bill 2001, through prior to the Federal Government elections in November. To facilitate this, the following changes have been agreed upon.

Period of Bankruptcy to Remain at three years
The proposed reduction of the standard period to 2 years will not now proceed.

However, early discharge will still go.

Cooling-off Period
The cooling-off period will not apply in these circumstances:

If a debtor’s petition was withdrawn within the preceding 12 months. The reasoning behind this is that the debtor has already demonstrated a willingness to consider the alternatives to bankruptcy and is also included to prevent abuse through debtors frustrating creditors by presenting, and then withdrawing petitions on a regular basis.
If the debtor has been in business in the 30 days before presenting a petition. This is to alleviate the risk of assets being sold off, hidden or deteriorating. It also gives a chance of the business being sold as a going concern
If there is already a creditor’s petition on foot. This is to prevent debtors from using the cooling off period to gain additional time.
If the debtor has significant assets and the Official Receiver considers there is a risk of assets disappearing.

These changes have been agreed on following consultation with financial counsellors, trustees, creditors, policy advisers and the Bankruptcy Reform Consultative Forum.

TELSTRA MATTERS

by Rosie Atkinson

Client Authorisation

Despite reassurances from Telstra, financial counsellors are still reporting instances where Telstra operators are asking for financial counsellors’ dates of birth when discussing payment arrangements.

When a Client is present, Telstra may ask to speak with the client to gain verbal approval, prior to continuing a call with the financial counsellor. The client’s date of birth may be checked. When a Client is not present, Telstra may check that you have a signed authority on file to speak with them, or they may ask you to fax it through prior to continuing the call.

In both the cases above, financial counsellors’ dates of birth are not required unless the counsellor wishes to be registered as a permanent authorised representative on the account. In this case, each time the counsellor wishes to deal with Telstra on the client’s behalf the counsellor will be required to give their date of birth. In one off cases, the counsellor does not have to provide their date of birth.

Should you encounter any problems, please note the time of your call, check which State the operator is in, and, if possible, the name of the operator. Provided you have this information, you can contact Robert Morsillo on 1800 816 553.

Changes to InContact Credit Policy

Telstra has informed customers and consumer advocates that from Monday 19th March 2001, InContact customers who have a prior debt to Telstra will have 12 months to repay their debt, otherwise their InContact service may be withdrawn. Other InContact customers are not affected by this change. If the debt is not settled after 12 months, Telstra is offering its new communic8 prepaid home service as the customer’s final option.

Customers affected by this change should ring 1800 151 992 to discuss repayment arrangements. Financial Counsellors requiring more information about InContact and communi8 pre-paid can ring Robert Morsillo, of Telstra Consumer Relations on 1800 804 591 or contact their local financial counsellor representative on Telstra’s Credit Management Working Group: Rosie Atkinson on (08) 8202 5182, Lola Mashado (07) 3257 1957, Julie Smith (03) 5422 6052 or Jean Lewis (02) 9951 5514

Financial Counsellors’ Summary:

InContact Policy

Incoming calls only, can ring 000, 132200, 132203, and Telstra Homelink 1800 numbers. Must not accept (reverse) chargeable calls.
Connection charge $0 to $190.30 depending on state of the line and Telstra Pensioner Concession. Must supply own telephone handset.
No monthly access charge, except for a silent line (which is withdrawn if not paid).
If there is a previous Telstra debt then there is 12–18 months to repay, otherwise InContact will be withdrawn and communic8 pre-paid home becomes the customer’s option.
Not eligible if customer has any other phone service (including mobile, including other service providers).

communic8 pre-paid home

Network based pre-paid account service providing most residential telephone service features. Gives account balance at the beginning and end of each call. Can have multiple accounts on the one telephone line, eg. in a shared household.

Attractive pricing.: From $7.70 monthly access (compares to $17.50 for standard service), 20¢ local calls (11¢ Saturday), flat (Peak/ Off-Peak) STD rate, $2.97 capped STD 7 pm-12am [4 pm-12am Saturday], standard ID rates.
Starter packs $45, with $12 call credit, available from Telstra Shops, Dick Smiths, Crazy Johns, selected Retravision. $20 recharge cards.
Not eligible if have previous Telstra debt > $100 AND < 12 months old.

communic8 pre-paid mobile

Available with/ without handset as a package from Telstra shops/ MobileNet dealers.
$25 and $45 per month plans plus a range of other “free” services, such as FreeChat 15 minute calls, 9pm to 5am, and Free24/7 for 3 minutes anytime to one other communic8 or Telstra mobile.

Old debts

Telstra will not connect a new full telephone service where there are outstanding debts (except InContact for 12 months while those debts are being resolved.)
If the debt is < $100 OR > 12 months old, then the customer may be eligible for communic8 pre-paid home.
Old debts can be repaid over a longer period of time, by negotiation. It is important that payments are correctly applied to the relevant account so a Telstra Payment Card may be useful.
In general, Telstra tries to ensure that multiple previous debts are handled by a single collection agent. If this is not the case, it can be arranged through Final Accounts.

Collection agents

A small panel of collection Agents is utilised to recover the debt when Telstra’s internal processes are unable to do so. Agents are agents for Telstra, which still owns the debt.
Telstra does not refer debts to Agents where there is an arrangement to pay in place, only if the arrangement is broken.
Contracts with Agents are very strict in regard to compliance with industry and regulatory codes of practice, including ACCC guidelines. Telstra takes very seriously feedback on this compliance.
Payment of any Telstra debt can be made at Post Offices, Telstra Shops and via the Pay-By-Phone service using a credit card if the customer has a Telstra Payment Card, a Bill or Reminder Notice with the account number. This is irrespective of whether the debt is with the Agent or not. If the debt is with an Agent the means of making instalment repayments should be con.firmed.
Collection costs/ Agency costs are NOT passed on to the customer (unless they are legal costs awarded by a court).
An Agent will make every reasonable attempt to contact the debtor including call.ing on any known contact number (including an InContact number). However, Agents acting under contract to Telstra are bound by a specific confidentiality clause. Any confirmed breach of this clause would risk cancellation of their contract with Telstra.

Disconnection

Generally, the customer is sent a bill, a reminder notice, a disconnection notice, then an attempt is made by Telstra to contact the customer by phone, and then a recorded voice announcement is put on the line before disconnection occurs.
However, the specific treatment process and the total time taken after the due date to disconnect a service depends on the customers’ credit history and risk assessment by Telstra. For example, high risk customers may not receive a reminder notice, but rather an immediate disconnection notice, and rather more quickly.

Bankruptcy

If a Telstra debt is included in the statement of affairs, Telstra will make up a final account and generally continue to provide a local calls only service. However, for “serial bankrupts” on Telstra debts, InContact only may be supplied instead.
If a Telstra debt is not included in the statement of affairs, Telstra will monitor the account in regard to credit risk and payment history.

Telstra Contacts

Live accounts (ie. where the service is still operating, or is temporarily disconnected, but not been cancelled and not yet subject to collection action) contact the credit management call centre: Fixed phone – 1800 816 025; Mobile phone – 018 018 111.
Cancelled accounts (ie. where collection activity is under way) contact Final Accounts: Fixed phone – 1800 151 992; Mobile phone – 1800 816 553.
Credit management policy and process (eg. issues with collection agents): Mr Michael Ryan, 03 9253 4280

Taking it further

Telstra’s Customer Referral Centre for complaints, 1800 011 333.

Telstra’s Customer Service Charter Office, 1800 809 536.

Telecommunications Industry Ombudsman, office of last resort, 1800 062 058.

Rosie Atkinson is a financial counsellor from Adelaide Central Mission Counselling Services , South Australia . The above is based on an article reproduced in the South Australian newsletter "Circular".

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