GE FINANCE – ALTERNATIVE DISPUTE RESOLUTION
By Jan Pentland
The Advisory Council of the GE Finance ADR Scheme met on 4 June 2001. The
Council is chaired by Dick Viney with two representatives from GE Finance and
two consumer representatives – Kate Keating and Jan Pentland.
Level of Complaints�
There was a range of discussion at the Council meeting including the Internal
Complaints Resolution process established by GE. Currently less than 100
complaints a month are being referred to this section of GE. Referrals are
through branches where they are unable to resolve the complaint or dispute
within two days, through third parties such as financial counsellors and
consumer advocates, or directly by customers.�
This relatively low level of complaint referral with GE being a national
finance provider, and the internal auditing of the process was discussed. I
strongly recommend that financial counsellors and consumer advocates utilize
the complaints process�
How to use the Complaints Process
The first avenue for you or your client is the local branch but if you do not
feel satisfied with the outcome, do ring 132826 to access GE’s Internal
Complaints Process. Check with your clients if they have been satisfied with
problems they may have had with branches, e.g. in rescheduling payments, and
whether unresolved problems have been referred on in the complaints process as
they should have been. GE’s own manual for branches instructs them to
refer unresolved problems after two days.
Issues Raised
I also raised issues I have had with GE in the six months since the Council
met:�
I expressed disappointment with the lack of effective communication between
GE’s arrears, collection and legal action sections. Several instances
have led to unhelpful outcomes both for GE and for my clients. It has also
caused me considerable frustration.
The second issue I raised was the continuing practice of serial refinances
often leading to overcommitment and in many cases to bankruptcy. My view is
that branches may be using refinances inappropriately to deal with local
arrears problems. I understand that GE’s Compliance and Complaints
section is currently undertaking research on this issue. I have just lodged a
complaint in relation to a client who received an original loan for $2000 and
then was refinanced three times in the following 8 months including an
inappropriate consolidation of other debts and taking of security over her car.
I would be interested in hearing about any other instances of inappropriate
refinancing.
The third and perennial issue raised was the continuing practice of overselling
and forced selling of insurance. I understand that GE’s Compliance and
Complaints section is undertaking a customer audit in relation to this
practice. I understand that GE customers who are sold insurance should be told
that it is optional; that the loan is not conditional on them taking the
insurance; that they have a ‘free look’ for 30 days and can cancel
the insurance within that period; and that they must be quoted loan repayments
first without insurance and only then with insurance.
Feedback
I believe that GE’s Compliance and Complaint section is committed to
addressing the issues we have had for many years with AVCO and now experience
with some GE branches. They need feedback from us to do that. Kate and I rely
on feedback from the consumer movement to be able to legitimately represent
consumers on the GE Advisory Council for the ADR. So, please contact me on
(03)9836 1958 or e-mail janpentland@hotmail.com� or contact Kate Keating on
(07)3257 1957.
Jan Pentland is currently Chairperson of AFCCRA (Australian Financial Counselling and Credit Reform Association) and Kate Keating is the manager of FCSQ (Financial Counselling Services Queensland)�
Client needs, counsellor needs
by Wayne Warburton
Why is financial counselling so effective? Why does it seem to reach into so
many areas of the client's life, apart from those involved with money? Why do
many of our clients experience a greater empowerment to deal with other people
and the world once their finances are brought under control?�
My personal belief is that financial counselling is a mechanism by which a
client's basic needs can be met, and that when basic human needs are met, a
person is freed to deal with other areas of life that have perhaps been
neglected in the struggle to survive financially. The client's capacity to deal
with problems, to absorb information, and to make life changes may be greatly
improved once the mental and emotional resources previously used to worry about
money related issues are released to deal with other areas of the client's
life.�
Such a principle can also be applied to the well-being of the counsellors
themselves. When a counsellor's basic needs are being met, it seems reasonable
to suggest that he or she is going to be freed to be more effective in their
dealings with clients. So, if a counsellor is properly paid, is well supported
at home and at work, and is able to practice in a relaxed workplace, fewer
mental and emotional resources will be wasted coping with the work and/or home
environments, and more resources can be directed towards client contact.�
One theorist who looked at such issues was Abraham Maslow. Born in New York in
1908, Maslow was the eldest in a large family of recently emigrated Russian
Jews. Bored to distraction at university, he failed to complete a law degree
and later, a psychology degree, much to his disappointment. He was a very shy
man, and his first kiss with his future wife, Bertha, was such an intense
experience for Maslow that he became fascinated with all ‘peak life
experiences’. He eventually began another psychology degree at the
University of Wisconsin, and worked with Harry Harlow, a famous animal
behaviourist. Maslow noticed that many animals would work to solve problems,
even when they were not hungry. The stronger and healthier the animals, the
more they would explore their surroundings, and show alertness and interest in
the world around them. He used his animal findings as a starting point for his
theory of a ‘hierarchy of human needs’, in which he suggests that
humans have a drive towards knowledge, power and insight, but cannot obtain
these things until basic human needs have been met (see Maslow, 1970).
Maslow suggests that healthy human development is likely only in a society that
‘offers all [the] necessary raw materials, and then gets out of the way
and stands aside [so] that the … organism itself [can] utter its wishes
… and make choices’ (p 277). In other words, a person will thrive
best in an environment where their needs are first met, and they are then
empowered and encouraged to stand on their own two feet.�
Maslow suggested two types of human needs: deficiency needs (basic human needs)
and growth needs (meta needs).
Basic needs he saw as being arranged in a hierarchy, although he also notes
that there may be exceptions. Our most basic needs must be met in order for
higher needs to emerge, and all basic needs must be satisfied before we can
begin to fulfill our growth needs. From most powerful to least powerful, the
basic needs are:
- The physiological drives. These include hunger, thirst and sex. If these are not met, the drives become more and more urgent, taking all our attention and energy to procure. Further needs cannot be pursued until these needs have been met. Once our physical needs are satisfied, the need for safety emerges.
- Safety needs This set includes such things as the need for security, protection, structure, law, order, limits, and freedom from fear, anxiety and chaos (Maslow, 1970 p. 39). Once safety needs have become established, a need for belongingness and love will usually surface.
- Belongingness and love needs We all need to be wanted and accepted by others, whether through family, friends or wider society. Also, we need to gather love from others before we can give it. The love of others can only be attained once all of the earlier needs are met.
- Esteem needs These are the last basic urges to emerge, and, according to Maslow, individuals become sick if this need is not met. We need to feel competent, independent, accomplished, and evaluated highly by those important to us. The healthier person bases their esteem on actual competence and adequacy, rather than on the praise or criticism of others.
Once these basic needs have been met, humans are then free to pursue their growth needs. Maslow called this moving towards self-actualisation. Ryckmann (1992) suggests that in the quest for self-actualisation, ‘people seek to gratify their innate curiosity about themselves and the workings of the environment, to know and understand phenomena that go beyond the gratification of basic needs, to move towards realization of their own unique potentialities’ (p. 379). The drive towards self-actualisation may be part of what empowers people to take control of their lives and develop their inner selves.
It is important to put Maslow’s thoughts into perspective. This is
just a theory, and it certainly has its share of detractors. However, in terms
of financial counselling, many of my experiences with clients seem to make more
sense if the meeting of needs is taken as a key factor for success.�
Clients often appear to feel quite powerless when we first see them. Maslow
would predict this, because clients often come to us in a state of anxiety and
amidst a chaotic life, and thus are not having their needs of personal safety
met. In more extreme cases of poverty, clients have hungry families, and basic
physical needs are not being met. He would argue that such clients would not be
able to feel personal power until all these ‘deficiency’ needs are
satisfied.
This is where the financial counsellor comes in. We can arrange for some
physical needs to be met, such as the need for food (sex we must leave to
others), and can also look at safety issues. Secure accommodation, a regular
source of income, protection for the abused, and the haven of the counselling
room are all safety areas which financial counsellors try to facilitate. In
addition, counsellors refer highly stressed clients for other treatment, try to
provide a low stress environment face to face, and assist the client to create
order from chaos.�
Most counsellors also try to provide their clients with a warm regard and a
sense that they are welcome. All in all, the 3 areas of physical, safety and
affiliation needs are often met during financial counseling, allowing client
and counsellor to also delve into areas involving self-esteem.
Let me provide a case example as an illustration. I had a client in serious
trouble with debts. He was a carpenter, but could not read or write, and so had
worked for very low wages because he had not pursued his contractor’s
licence.�
Contact with the landlord secured his accommodation, and calls to the creditors
bought enough time for the client to begin to feel relaxed enough to start
putting his life in order. Staying within his social support network was
identified as a priority for the client, and he started to renew relationships
which he had let slip a little, due to feelings of depression and a wish to
withdraw. English classes were arranged, along with a skills assessment to gain
a contractor’s licence. When the licence was finally obtained, the client
felt a surge in self-esteem, was able to work as a sub-contractor, and had a
large rise in income. Consequently, debts were repaid, and the client felt
empowered in many ways to take control of his life.�
This is not an atypical story. I believe that in many cases, clients are
unable to sort out their problems because their basic needs are not met, and so
a huge slab of their attentional resources, emotional resources and problem
solving resources are wasted on just procuring basic needs, not on fixing the
problem. If we as counsellors can assist our clients to obtain physical
necessities, and to feel safe, welcome, loved and capable, then those clients
may well become more able to take on board new information, to make good
decisions, and to move forward in strength.�
This is also true for counsellors. We need to eat. That means we need to be
paid regularly and paid enough to live comfortably. We need relationships that
fulfill our physical and emotional needs. We need the safety of job security
and a low-anxiety working environment. We need some order in our lives, and we
need limits. We need to feel like we belong and we need the love of others. We
need to become capable and to feel capable.
Unless these needs are met, it may be difficult to love others and to function
at the higher levels needed for counselling. Attention may be divided away from
our clients and from problem solving, by worry and anxiety. It may be hard to
empathise with our client’s needs if our own needs are too pressing. We
may stop growing as counsellors and as people.
For these reasons, I believe that counsellors need to be well looked after by
their employers, enfolded in a personal and professional network which is
supportive, and constantly building skills and esteem through continuing
education.
In summary, it can be very important to look at whether a client’s basic
needs are being met. Is your client being freed for growth? Equally
importantly, is this also true for you as the counsellor?
References and further reading
Maslow, A. H. (1970). Motivation and personality (2nd ed.). New York: Harper
and Rowe.
Ryckman, R.M. (1992). Theories in personality. Belmont CA: Brooks Cole
Publishing.
Wayne Warburton is a financial counsellor with Credit Helpline, NSW. He is also in his final year of psychology at Macquarie University, where he has recently been recognised as having achieved the most awards ever, in his year.
QUEENSLAND
Greg Mowle, president of the Financial Counsellors Association of Queensland says that they are developing their own web-site and have undertaken to link it to a national website for consumers Australia wide.�
At this stage www.financialcounselling.org.au� has been registered and from this central point consumers will be able to access each State's web address (those that have one). The State site will primarily be a database of financial counsellors: what they do, how they can help and how you can contact them etc. There will also be links to more technical sites for information on bankruptcy, civil law, debt recovery etc.
If anyone would like to contribute or add input to this project, please contact Gregory Mowle on gmowle@brisbane.lifeline.org.au�
NEW SOUTH WALES
Steve Ackland from Dubbo Community Legal Service and Jon O’Mally from
Centacare, Narromine have both been inundated with requests for Tax Help from
clients this quarter. Steve estimates that approximately 40% of his clients
have come in for Tax Help. Available from July to October, volunteers who have
been trained by the Tax Office, are able to help people on low incomes prepare
their tax returns through this scheme.�
The areas that both Steve and Jon work in cover some of the most remote areas
in New South Wales. Every six weeks they meet up with Kevin Howard of Credit
Line, Bathurst and catch up on information, and do ongoing training.�
SOUTH AUSTRALIA
The South Australian Financial Counsellor’s Association (SAFCA) will hold their annual conference a little later this year on Thursday 8th and Friday 9th of November. The venue will be the Adelaide Hotel in O’Connell Street, North Adelaide with spectacular views of the city. Sue Heathcote, President of SAFCA, says guest speakers are lining up for an opportunity to present at the Conference so there should be plenty of stimulating and challenging dialogue.
VICTORIA
The Financial and Consumer Rights Council (FCRC) are now well settled in their new premises which are on level 13, Wales Building, 227 Collins Street in the heart of Melbourne, diagonally opposite the Town Hall. They also have a new phone number (03) 9663 2000 and fax (03) 9663 7677�
Jessica Goldsworthy, editor of the stimulating and highly respected Consumer Rights Journal informs us that the FCRC have recently had to make the difficult decision to conclude publication of the journal due to cost constraints. The final edition will be a double at the end of this year. Anyone wishing to contribute to this, please contact Jessica via the FCRC on email fcrc@vicnet.net.au� or fax. (03) 9663 7677�
NORTHERN TERRITORY
Peter Carratt from Sommerville Community Services in Darwin, celebrated his first twelve months as a financial counsellor in July. He is now looking forward to some community training with three very different groups of people.
One group consists mainly of aboriginal women, the second group will be made up of disabled people and the third is geared towards people who are recent recipients of Child Support.�
WESTERN AUSTRALIA
Jacinta Laffer co-ordinator of the Financial Counsellors Resource Project (FCRP), reports that the booklet “When the Repo Man Comes” designed and written by Ian Macdonald with colourful illustrations by Sue Gregory, has proved to be such a hit with workers that another 3,000 have been ordered from the printers. The booklet explains the rights and obligations of consumers who have purchased cars under finance. If you would like to order copies please ring the FCRP on (08) 9221 94111 or email fcrp@iinet.net.au��
TASMANIA
Judy Cornwell reports that seven financial counsellors have been given brand new laptop computers through funding from ‘Breakeven”, the Gambling Counselling service. This has been an enormous help for them particularly when doing outreach work at another location. Now, says Judy, she can take her work with her and do it when she has some spare time instead of having to wait to get back to the office before she can start.
NEWS FROM AFCCRA (Australian Financial Counselling and Credit Reform Association)
Jan Pentland, Chairperson of AFCCRA, reports that the Australian National
Training Authority (ANTA) has funded a review of the Community Services
Training Package (CSTP) over the last few months. One of the outcomes of the
Review undertaken by Community Services Health Training Australia (CSHTA) has
identified counselling, including financial counselling, as a gap in the
CSTP.�
In phase 2 of the Review for ANTA which includes development of draft
competencies for financial counselling, the FCRC in partnership with Delaney
Associates, has submitted an expression of interest (EOI) to undertake this
work. Delaney Associates has the required expertise in developing training
package materials within the ANTA frameworks and FCRC believes it has the
necessary industrial knowledge and expertise on financial counselling.�
This is an Australia wide project and Jan Pentland as Chair of AFCCRA, has
notified all states and territories of FCRC’s expression of interest.
Feedback to date is supportive. A comprehensive Australia wide consultation
process is part of the proposed project plan.�
The outcome will be national competency standards for financial counselling.
Registered training providers including the TAFE system, will then develop
training packages to meet the competencies.�
If anyone has any queries about any of the above, please contact Jan Pentland
on (03) 9879 8760 (W) or (03) 9836 1958 (H) or 0407 042 483.�
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
Notes and Notices
RELATIONSHIP DEBT UNDER SCRUNITY
The NSW Attorney General has asked the NSW Law Reform Commission to review the law relating to third party guarantees to discover if it has a more severe impact on particular groups within the community. As part of that review the Commission, with the Faculty of Law at the University of Sydney, has prepared a questionnaire to find out more about experiences of third party guarantees and ‘relationship debt’. They would like financial counsellors and other consumer advocates to encourage their clients to contact the Commission about the questionnaire.�
Jenny Lovric, Legal Research Associate, can be contacted on (02) 9228 8189 for further information or by email on Jenny_Lovric@agd.nsw.gov.au�
IMPORTANT NOTICE RE HECS DEBTS IN BANKRUPTCY
Rosie Atkinson, Senior Resource Worker, South Australia has passed on this
important message about Higher Education Contributions Scheme (HECS):
Amendments to the Bankruptcy Act 1966:
HECS debts related to the pre-bankruptcy period (ie. before the date of
bankruptcy) are provable in bankruptcy; and HECS debts related to the
post-bankruptcy period (ie. after the date of bankruptcy) are not provable.
Legislative amendments take effect from 7 June 2001
NEW INFORMATION ABOUT ONE-TEL
Lydia Fournaris, a financial counsellor with Credit Line, Penrith, NSW, has
passed on information she received about One-Tel from their administrators,
Ferrier Hodgson. They do not have access to the accounts and can only give
limited information to One-Tel customers. But, if you have a client who may be
in dispute over a debt with One-Tel they are advised to contact the One-Tel
head office on 1300 300 371 or (02) 9777 8140 or alternatively they can write
to:
The Account Inquiry Team, PO Box 476, Sydney 2001.�
The Financial Industry Complaints Service
by Tony Devlin
If your client has a dispute in regard to a financial product or service, FICS can possibly help
What is FICS?
FICS is an alternative dispute resolution scheme. It is industry funded but has
consumer involvement e.g. there are consumer representatives on the board, the
panel and on the rules committee. It can be a cheap, timely alternative to
using the Court system. It is free to consumers and if a consumer is still
unhappy with the outcome of a complaint at the end of the process the consumer
can still pursue their rights in the Courts. The scheme has been approved by
the Australian Securities and Investment Commission.
What type of complaints does it handle?
It can deal with complaints in relation to; life insurance, superannuation,
funds management, stockbroking, financial advice, investment advice and sales
of financial and investment products. FICS currently only deals with personal
superannuation products sold by life insurance companies. The Superannuation
Complaints Tribunal can deal with other superannuation disputes.
Complaints tend to relate to; insurance claims denied, inappropriate advice,
misrepresentation, standard of service provided, non-disclosure of fees and
charges and non-disclosure of tax and social security implications. FICS
receives about 800 complaints each year.
How does it operate?
Consumers need to try to have the complaint resolved through the internal
dispute resolution scheme of the organization they have the dispute with.
However, generally, if it cannot be resolved, or 45 days have elapsed, the
matter can go to FICS.
The majority of the cases before FICS are settled by investigation, negotiation
and conciliation. If the complaint cannot be resolved at this level and it
relates to a matter of more than $10,000 it can go to the panel for
determination, or if less than $10,000 it can be decided by an Adjudicator.
Complaints have been approximately decided 60% in favour of the company and 40%
in favour of the consumer.
How to contact FICS
To contact FICS call 1800 335 405 or visit their website at
www.fics.asn.au�
If you have any queries about FICS or are not happy with your experiences with
FICS call Tony Devlin on 02 9951 5512.
Tony Devlin is Manager of Credit Line, Sydney and is a consumer representative on the board of FICS
Bridging the Breach
By Marian Buckley, Solicitor, WCLS
Community concern is increasing over social security penalties having a
harsh impact. Unemployed disadvantaged clients may need assistance to bridge
the breach.
The numbers of unemployed clients whose Social Security payments have been
penalized for not meeting specific requirements (activity breach) have
escalated, since the new “preparation for work” agreement system
was introduced in July 2000. In “Breaching the Safety Net: the harsh
impact of social security penalties” ACOSS estimated an 159% increase in
the number of nil payment period penalties applied from 2000 to 2001.�
The most common activity test breach was for failing to attend an interview (on
time). In any 2 year period, first and second breaches result in a 26-week
payment reduction. Subsequent breaches result in nil payment for 8 weeks.
Aboriginal, psychiatrically ill, young and other vulnerable people may be even
more harshly penalized than those found guilty of offences such as theft or
drink-driving. The Salvation Army advised that 11% of people using their
emergency services reported turning to crime after their payments were
cut.
While Job Network providers make recommendations, a discretionary decision is
made by a Centrelink officer, as to whether or not to impose an activity test
breach. Many alleged activity test breaches can be and are set aside as
invalid, once they are scrutinized.�
Issues and Circumstances:
Centrelink officers or clients may appear to inadequately meet their Mutual
Obligations:�
- A person’s special circumstances may prevent them from meeting the activity test. Centrelink has an obligation to assess whether a temporary exemption was appropriate e.g. a major personal crisis.�
- A reasonable excuse for not complying with an activity test requirement is something which was outside of the person’s control and unforeseeable, such as an unexpected clash of responsibilities.
- A person ought to be notified of the nature and details of the breach and their rights. Centrelink’s responsibilities include an obligation to act fairly and to strictly follow the required breach procedures.�
What action to take:
Clients may need assistance to exercise their appeal rights and take
appropriate action.
- Check the person’s circumstances and situation with Centrelink on 132850.�
- For an original decision maker (ODM) review, make an appointment on 131021.
- Provide a client authority and request the payment be restored pending the review.�
- If unsuccessful, they may request an ARO review (authorised review officer).
- If review is unsuccessful, they may appeal to SSAT Social Security Appeals Tribunal (1800 011 140)�
- If that appeal is unsuccessful, they may appeal to the Administrative Appeals Tribunal (AAT)
- To obtain more information, make a Freedom of Information (FOI) request to Centrelink�
- For legal assistance, contact the local legal aid office or Welfare Rights: www.welfarerights.org.au�
- If transparency or fairness are issues, contact the Commonwealth Ombudsman (1300 362 072)
- If mal-administration caused a person losses, they may request Centrelink compensation (CSDA) .�
- To make a complaint about service issues, contact Centrelink Customer Relations (1800-050004).
- To raise issues through your local federal member, phone or write to them.
What else is happening?�
Two reviews are currently in progress. The Federal government is reviewing its
administrative procedures over the next two months. Meanwhile, an independent
inquiry chaired by Professor Dennis Pearce is focusing on the impact of
breaches and how the system can be made fairer and more effective.
Marian Buckley has worked as a social worker and then as an advocate in Administrative Law, for Centrelink�
Casework Discussion Teleconference
During a recently held teleconference on casework, a financial counsellor
presented the case below. Each participant was invited to express their
thoughts on what was going on in the case and to say what they might do if the
client was theirs.
This is a summary of issues discussed and some ideas explored. It is not meant
to be a detailed description of all that was said during the conference but
rather to capture the broad outline of what was raised and the issues
discussed.
The situation:
A client was referred to the financial counsellor by the Deaf Society and
required an interpreter at each interview. The major finance problem seemed to
be over repayments on a car loan which the client was unable to keep up due to
being recently retrenched. The client seemed set on a voluntary surrender of
the car.
What has happened so far:�
After doing a Money Plan, the counsellor realised that the client’s
literacy skills were weaker than he had originally believed, as it was clear
the client was having problems reading.
This raised the question of how much the client had understood when the
original contract was signed. This was backed up by the client stating they had
understood the payments were to be monthly not fortnightly, which had led to
difficulties from the start.�
When questioned about other savings such as superannuation or retrenchment
payouts, the client became evasive and was reluctant to reveal any
details.�
It was also made clear to the financial counsellor that the client did not want
to carry on with the car loan but wanted to surrender the car as soon as
possible.�
The financial counsellor warned of the possibility of a residue debt and the
implications that might follow. The financial counsellor has spoken to the
creditor and hopes for a waiver of the residue debt once the car is sold.
Each financial counsellor who participated in the teleconference was then asked
what they would do if the client was theirs. These are some of the main ideas
and suggestions of how the participants felt they would respond:
What I think the case is about:
The primary concern for each financial counsellor was the client’s
capacity to understand what had been and was now being communicated. The
question of the client’s initial capacity to understand the original
contract was of concern as was the ability to understand the full implications
of a voluntary surrender and a likely residue debt.
The reluctance to disclose assets was also seen as a stumbling block to any
real negotiation with creditors. Financial counsellors expressed caution in
negotiations with creditors in this type of situation due to credibility
implications both for the financial counsellor and the agency.�
Suggestions by counsellors of what they might do in the
situation:
Could pursue original contract as unconscionable due to communication
difficulties from the start as evidenced by the client’s misunderstanding
of the fortnightly payments. Or, could use this to persuade creditor to waive
any residue debt.
If client is set on a voluntary surrender of car, do nothing, but explain
options as clearly as possible to make client aware of problems that might
occur – if there is a residue debt how will it be paid off?
Explore possibility of a private sale to get best possible price for the
car.�
If client is willing to disclose the true position of superannuation or other
savings, it may be possible to use these later on if creditor refuses to waive
residue debt.
Challenging and Confronting Clients
By Jenny Fitzgerald
When we talk of challenging and confronting people, this often brings up
emotions of fear, anxiety and apprehension. When we ourselves are challenged or
confronted, we often feel threatened and may become defensive.
In a counselling situation, confrontation involves raising the awareness of the
client by presenting information to them that, in some way, they are
overlooking, or failing to identify, themselves. Correct and careful use of the
skill involves bringing into the client’s awareness, in an acceptable
way, information that may be unpalatable to them which is either being avoided
or just not being noticed.
All clients deserve a high degree of respect and like most of us, they usually
don’t like being told painful truths. Metaphorically speaking, the art of
good confrontation is to help the client swallow bad medicine voluntarily, so
that they can incorporate it into their bodily system and digest it.
Confrontation is an invitation to examine some form of behaviour that seems to
be either self-defeating, contradictory or harmful to self or others, and to
challenge that behaviour.
The skill focuses on the discrepancies, distortions, evasions, games, tricks,
excuse making and smoke screens in which clients involve themselves (and may
attempt to involve you) and that keep them bogged down in their problem
situation.
We should remember that the purpose of confrontation is not to strip people of
their defenses. Rather, it is to invite clients to challenge the defenses that
keep them from managing problem situations and developing opportunities.
Confrontation involves giving the client feedback on his or her behaviour which
may be difficult for them to hear. The following ways help ensure that
challenging feedback will be given in such a way that the receiver is most
likely to use it:
- Avoid labeling—derogatory labels put people down and make them resistant to accepting and acting on feedback.
- Use reflection—describe the context and self-limiting behaviours in question as specifically and as accurately as possible without labeling.
- Describe where possible, the impact or consequences of the behaviour. Point out how relevant parties are affected by the behaviour in terms of both emotions and behaviours.
Before using confrontation we should always be careful to examine our own
feelings, motives and goals. Ask yourself “ Do I want to confront this
client because I am impatient and not prepared to allow the client to move at
their own pace; do I want to confront because I enjoy it; or am I feeling angry
with the client and want to express my anger through
confrontation?”�
If the answer to any of these questions is ‘Yes’ then the
confrontation is inappropriate. Satisfying the counsellor’s own needs is
no justification for confrontation. It should only be used after the use of
other counselling skills has failed to effectively increase the client’s
awareness of their situation.
Confrontation is appropriate where the client is:
- avoiding a basic issue that appears to be troubling them�
- failing to recognise possible serious consequences of their behaviour
- out of touch with reality (excluding mental illness)
- going round in circles by repeating the same story over and over�
Good confrontation usually includes elements of some or all of the following:
- a reflection or brief summary of what the client has said, so that they feel heard and understood
- a statement of the counsellor’s present feelings
- a concrete statement of what the counsellor has noticed or observed, given without interpretation
Some examples of confrontation that could be used:
- I’m really confused. I can see that your debts are growing rapidly and you’ve come here today to sort things out, but on the other hand you seem to be avoiding some tough decisions.
- I’ve noticed that we seem to be going round in circles, so I’ll summarise what we’ve talked about.......(summary)
- I’m concerned that several times you’ve mentioned the amount of money your husband spends on cigarettes and alcohol but then you make excuses for him.
Jenny Fitzgerald is Director of Lifeline Western Sydney
Mobile Phone Complaints
The following is an extract from a TIO media release dated June 19, 2001.
The full report also contains other statistics about billing and customer
service and can be found on the TIO’s website under
www.tio.com.au/media_statements� Contact no for TIO is 1800 062 052
Ombudsman reports rising complaints about misleading advice from mobile phone
salespeople:
Telecommunications Industry Ombudsman Mr John Pinnock has issued his strongest
public criticism yet of the conduct of mobile phone dealers with the release of
his office’s statistics.
Statistics published in the June issue of the TIO’s quarterly report TIO
Talks show that in the first three months of this year 585 people contacted the
TIO claiming they had received misleading advice about their mobile phone
contract.
Complaints about misleading advice now account for 31% of all complaints to the
TIO about mobile phones, compared to 24% at the same time last year.
“I regard this as concerning, “ says Mr Pinnock. “This is the
second consecutive quarter in which calls regarding misleading information
about mobile phone contracts have been at over 30% of all mobile phone
complaints; and in terms of actual numbers, this is the highest figure
we’ve seen.”
“Particularly worrying is that there are a number of recurring themes in
the stories the TIO is hearing about the claims made by mobile phone
salespeople.”
“People are telling us they have been told they are a guarantor when
they’re not, or that there is a credit limit when there isn’t, or
that they have won a phone when they haven’t, or that they were going to
get free extras and they didn’t,” says Mr Pinnock.
“If people read contracts thoroughly before signing them, the TIO
wouldn’t see a fraction of these cases. But is it wrong for consumers to
believe that they can trust at least some of what a mobile phone dealer tells
them? From our statistics it appears the answer is ‘yes’, and this
is a very unflattering reflection on the telecommunications industry at
present.
Below are some case studies from the report showing the type of complaints on
mobile phones the TIO has been dealing with:
Case Study 1:
A 13-year-old boy was told he had won a mobile phone for participating in a
market research survey. On signing the contract, the boy’s mother was
told there would be a $22 per month fee for the phone, which would be deducted
from the call charges. On receiving the first bill the woman discovered that
she had been charged a monthly fee in excess of $22, as well as a connection
fee of which she had not been informed. When she asked to be released from the
contract she was told she would be charged $250 to pay out the contract.
Following investigation by the TIO, the mobile carrier agreed to cancel the
contract without penalty on the basis that the dealer had used questionable
sales tactics and had given misleading information.
Case Study 2:
An 18-year-old girl unknowingly entered a mobile contract believing she would
only be guarantor for her 16-year-old friend. Automatic payments were arranged
to be made form the 16-year-old’s bank account. However, when the account
stopped covering the phone’s bills, the 18-year-old was pursued for the
debt. The 18-year-old provided a statutory declaration stating that she had
been advised by the salesperson that she would only be a guarantor, and that
her friend would be responsible for paying the bills. After investigation by
the TIO, the contract was terminated without penalty on the basis that the
salesperson had misled the complainant.
MINORS AND MOBILE PHONE CONTRACTS
Penny Quarry at the Redfern Legal Centre in Sydney is interested in pursuing cases of minors who are sold mobile phone contracts.
So, if you have any clients who are under 18 and as a result of a mobile
phone debt are in financial difficulty or facing bankruptcy, please
contact:
Penny Quarry at the Redfern Legal Centre on Tel: (02) 9698 7277 or Fax: (02)
9310 3586 or email penny@rlc.org.au
In the Media
Fury as Banks grab Record $6.3bn in fees
The fees charged by banks surged to a record $6.3 billion last year - up by 50%
since 1997 - sparking fresh calls for greater regulation. Total fees on
services including loans, credit cards and transaction accounts rose by 14% in
2000, a Reserve Bank report said yesterday.
The revelation came as the latest half-year results showed the combined profits
of the four big banks at a record $5 billion. The Reserve report said fees
accounted for 24% of all bank income for 2000, up from 21% in 1997.
Sydney Morning Herald, 20 July, 2001
Hot Stock
Collection House
Shares in receivables management company Collection House are up 420% since the
company listed last October. It is the best performing member of the
S&P/ASX200 index so far this year. Shares are trading at about $5.20
Why? Collection House offer one of the few chances to invest in the debt
collection and receivables management industry, a sector some analysts estimate
will increase four-fold over the next five years.�
Sydney Morning Herald, 18-24 July, 2001
Gamblers get points for Trying
Australia has achieved another world first in gambling - this time for giving
reward points to frequent punters. TAB Queensland announced a rewards program
yesterday for punters who use their automated telephone betting service.
But gambling counsellors said it will only add to the misery of problem
gambling. Newcastle City Mission counsellor Chester Carter said incentive
schemes were the worst thing for people trying to beat gambling habits. TAB
Queensland spokesman Paul Fitzmaurice denied wanton betting was being
encouraged.
The Australian, 11 July, 2001
Bankruptcies rocket as GST bites
More small companies and sole traders are going to the wall as the full force
of the GST hits the business community. Business bankruptcies blew out by 177%
in the last quarter compared to the same period last year, according to data
from the Insolvency and Trustee Service Australia.�
A personal insolvency expert from Hall Chadwick Chartered Accountants, Mr Paul
Leroy, said the bankruptcy explosion was the result of businesses delaying
payment of their GST liabilities.�
“These are not the corporate statistics,” said Mr Leroy.
“These figures are a reflection of the suffering of small business owners
and sole traders, the mums and dads and families.”�
At 21.2% business bankruptcies are at the highest level since 1998.
The Australian Financial Review, 9 July, 2001
Household debt through the roof
Australian households remain “vulnerable” to an economic downturn
after emerging as the main driver of a 25 per cent increase in private debt
over the past three years, the Reserve Bank of Australia has warned in its
annual report.
The RBA report says Australia’s banking system is in good shape, despite
the collapse of HIH Insurance, but it highlights a sharp rise in household
debt.
Over the past three years, private debt has risen from 100 per cent of GDP to
125 per cent.
Household debt has been the main mover, almost doubling to about 60 percent of
GDP since the early 1990’s.
The rise of margin lending was also a concern. The bank noted that household
debt had been growing at an average rate of 14 per cent a year in recent years,
and was now on par with corporate borrowing.
The Australian Financial Review, 30 August, 2001
Welfare chiefs slate Abbott’s attack on
poor
Tony Abbott has stirred up another hornest’s nest, this time by blaming
the poor for their unhappy condition and rejecting suggestions that child
poverty is on the rise.�
Welfare’s chiefs yesterday condemned the Employment Minister’s
claims and called on the Howard government to do more to alleviate
poverty.
But Family and Community Services Minister Amanda Vanstone leapt to Mr
Abbott’s defence, saying she agreed with her cabinet colleague’s
views that poverty can be brought about “by silly choices” some
people make.
The Australian 25 July, 2001
Telstra expected to ring up $4bn�
Australia’s biggest phone company, Telstra Corporation, is expected to
deliver an underlying profit of about $4 billion today although the result will
be hit by massive writedowns on its Asian joint ventures.
The Australian Financial Review, 29 August 2001
ACCC to block Telstra fee hike
The Australian Competition and Consumer Commission said yesterday it would
block increased charges by Telstra on line rentals unless the carrier improved
its low-income pricing scheme.
The surprise decision marked another low in the hostile relationship between
the nation’s regulator and the dominant telephone company, which
complained the ACCC had gone public before fully considering Telstra’s
response to its concerns.�
Rejecting Telstra’s application for a 14 per cent increase in line
rentals, ACCC chairman Professor Allan Fels said he was concerned about the
take-up of a service for customers with low phone bills, designed to protect
the poor from price hikes
The Australian Financial Review, 23 August 2001
Q & A Corner
Working as a financial counsellor, you probably come across all kinds of
bits and pieces of information that you store away for future use. You may even
think you should probably pass that on to others but don’t have the time
or inclination because you’re so busy. So we thought we’d trial a
Question and Answer Corner to try and capture some of your findings.
Here’s one we came across the other day to start with (courtesy of Sue
Cook, Cairns):
A client was issued a Bankruptcy Notice made up of a Judgement debt of $1595
plus legal costs of $340 plus $177 interest, totalling $2112. Was this notice
valid ?
According to Section 41 under the Bankruptcy Act, a creditor must obtain a
final judgement or final order of at least $2,000, excluding costs or interest,
before the Official Receiver may issue a Bankruptcy Notice. The notice was
invalid.
If you would like to share some information with us, please email me on:
jean.lewis@wesleymission.org.au ) or fax (02) 9951 5511
Sharks watched—and caught!
There are still many who believe there are ways around the strict rules set
out by APRA for early release of superannuation (despite being told to the
contrary) and there are many sharks out there who take advantage of people
desperate to get access to their funds.�
After a client told a counsellor in Adelaide how just such a company, SUPER
RELEASE, had been recommended to them by the debt collection agency, Collection
House, alarm bells rang and this is what Rosie Atkinson, Resource Worker in
South Australia, found on APRA’s website at www.apra.gov.au :
APRA (Australian Prudential Regulatory Authority)
Dated 26 August, 1999 No: 99.15
Gold Coast businessman Timothy Melrose Barritt was convicted in the Southport
District Court Today on eight charges of forging and uttering documents
contrary to the Commonwealth Crimes Act 1914.
He was sentenced to 18 months imprisonment to be released forthwith upon giving
security by way of recognisance in the sum of $2,000, conditional that he be of
good behaviour for 4 years and pay the Commonwealth a pecuniary penalty of
$1,800.
Mr Barritt operated a business called SUPER RELEASE in Broadbeach, Queensland,
that charged clients a substantial fee for submitting applications to the
Australian Prudential Regulation Authority (APRA) for the early release of
superannuation benefits on specified grounds. Between 17 March and 1 June 1998,
Mr Barritt submitted forged documents to APRA in support of an application for
the early release of superannuation benefits by a client.
APRA General Manager Bill Gole said that they were concerned about the
activities of Mr Barritt and others around Australia who are charging needy
clients fees for making applications for early release of their superannuation
benefits.
“Where applicants or service providers use criminal means to try to get
round the system, APRA will not hesitate to refer matters to the Australian
Federal Police, as was done in the case of Mr Barritt”
Collection House have been informed of the information on APRA’s website
about SUPER RELEASE and say they will not recommend this company again.�
ASIC’s (Australian Securities & Investments Commission) website also
has details of recent prosecutions of financial advisers who have fraudulently
arranged early release of super funds for their clients.�
Under www.asic.gov.au� there is a media release in March this year (number
01/100) which details at least four different enforcement actions taken against
people who have fraudulently tried to obtain superannuation releases. At least
one of these people received a prison sentence.
Peter Kell who is Head of the Office of Consumer Protection at ASIC says
‘Some cases have involved the theft by unscrupulous advisers of all or
part of the consumer’s superannuation benefits.’�
He also advises that ‘ In addition to the risk of losing their money,
consumers may suffer taxation complications as a result of these fraudulent
payments.’
Help us expose fraudulent, unethical and illegal operators. If you have any information that can be legally used to make other Financial Counsellors aware of activities of “Sharks” let us know. We will publish it and then Financial Counsellors could warn others about the schemes and/or help get clients out of situations that they don’t want to be in.
