Sharkwatch June 2002

Something to ponder in the world of financial counselling

by Jean Lewis

Who or what are Financial Counsellors?

In a recent editorial in the SAFCA Chronicle (South Australian Financial Counsellor's Association's newsletter), Rosie Atkinson, Senior Resource Worker, posed the question Are Financial Counsellors becoming Extinct? and went on to describe how, just recently, a number of businesses have been actively and aggressively promoting a variety of services to the public such as restructuring loans, debt agreements, budgeting, financial and debt management.

All the things that financial counsellors do. The major difference being of course, that the services they offer are not free and the fees involved can, in fact, be quite substantial.�

So, where do we fit in? Should financial counsellors be charging a fee too? Our services are very similar and some agents are even referring to themselves as 'financial counsellors' and have asked if they could become members of a financial counselling association.

A fee for service

This question has been raised a number of times in the past and is currently being debated by one of the state associations. Lets take a look at some of the arguments:

There has always been a lack of adequate funding from both state and federal bodies and agencies are going broke.
People expect to pay something for a service they receive-the 'User Pays' philosophy.�
Clients who earn more than $30,000 pa. will be charged a fee, so low income clients will still be given a free service, thereby adhering to the funding body requirements as in the Commonwealth Financial Counselling Program.

Perhaps today, more than ever, we need to think about who we are and what philosophy underpins our role in the society we live in and the profession we have chosen to work in.�

So, with this in mind, here are some questions that might set you thinking We would welcome any others from you or your response to them.

Isn't a financial counsellor defined by the fact that they do not charge a fee for service?
Is there something not quite right about charging someone who is in financial difficulty, a fee that exacerbates their financial crisis?
If we charge a fee, does this mean that we only counsel those clients who can pay and if so, who helps the ones that cannot pay? Where do they go for help? In other words do the issues of the client take precedent over those who cannot pay?
If we accept a fee, how would that affect our funding, would state and federal bodies impose immediate cuts if we were gaining income from another source?
If we charged a fee, does everyone pay or should there be a sliding scale?
Will our service then become dependant on the clients who can afford the top fees. If so, do we end up only seeing those who can afford the highest fees?
If financial counsellors charged a fee for service, how would the public distinguish them from financial planners, financial advisors, brokers etc?
If we charged a fee, would clients feel inclined to press for results or even press charges if they felt they had received the wrong advice?

Well, what do think? Please feel free to respond and let us know your thoughts.�

You can write or send an email to us, we would welcome either. Details are on the page facing this one.

City Finance Loans and Cash Solutions

by Richard Brading
Principal Solicitor
Wesley Community Legal Service

Just when we thought that payday lenders were under control and loan sharks were heading for extinction…. along comes a whole new batch of creative moneylenders.�

City Finance Loans and Cash Solutions seem to be the leader of the pack - a franchised operation with seven offices in N.S.W., six in Queensland, four in Victoria, and a couple in S.A. and W.A. and no doubt more on the way.�

Consumers reply to print advertisements offering loans to people on low incomes such as pensions and who have poor credit reports.

City Finance has revived an old ploy - taking a Bill of Sale over the household goods of the desperate people who come their way for small loans (about $200-$3,000).�

The paperwork attempts to comply with the Consumer Credit Code and the Bills of Sale legislation, providing a secured loan at a very high rate of interest (from 30 - 46% p.a.).�

A City Finance loans officer comes to the consumer's home and makes a list of all the furniture and saleable items, including the children's possessions, down to the plates and cutlery, then takes the consumer back to the office to sign the paperwork.�

Payments are small and frequent and are often made by Direct Debit.�

City Finance will also take a REVS security over motor vehicles or boats.

In one example, a sole parent who borrowed $400, contracted to pay a total of $725.04 to City Finance over 36 weeks at $20.14 per week. As would be expected she got behind and was hit with enforcement expenses of $25 per letter of demand, $45 per home visit, and $350 for removal of furniture.

However, it appears that City Finance rarely need to take a person's furniture. The fear of seizure is enough to ensure that their desperate clientele maintain their loan repayments, or renegotiate a loan for an increased amount.

The West Heidelberg Community Legal Service in Victoria has been collecting information and case studies about consumer's experiences with City Finance. But Carol Francis from the Banyule Community Health Service, cnr Alamein Rd and Catalina St, West Heidelberg, is the person to contact. You can phone her on (03) 9450 4033 or send an email to carol.francis@bchs.org.au�

City Finance is not the only one of these "new lenders". Car dealers, loan sharks from Queensland and the usual suspects are cashing on the weakness of the Consumer Credit Code and getting into the moneylending business. The recent Payday Lenders law may have put some out of business, but there is always a new angle.

Unfortunately, the sort of consumers who utilize these bottom-of-the-market lenders are often reluctant to participate in litigation, media expose's and social action, so it can be difficult to obtain the momentum to effect change.

AFCCRA Report

By Jan Pentland
Chairperson, Australian Financial Counselling and Credit Reform Association

While the challenge of maintaining a national advocacy group without any Government funding since 1996 remains a somewhat daunting task, AFCCRA continues to be active around our priority issues. I would like to express my continuing appreciation to AFCCRA Council members and their agencies who make a very significant contribution to the organisation. Thanks also to Telstra who have funded our bi-monthly teleconferences - AFCCRA's lifeline.

Despite their own full workloads, AFCCRA Council members represent their states and territories through the national association and provide a very useful information flow as well as taking on additional tasks on behalf of AFCCRA. We welcome Elizabeth Terry as the new AFCCRA representative for NSW financial counsellors and thank Jennifer Gracie for her contribution over the last year.

AFCCRA representatives on various consumer bodies are: Lola Mashado - Telstra Consumer Consultative Council; Ann-Marie Paulsen - Optus Consumer Consultative Council and Jan Pentland - ITSA's Bankruptcy Reform Consultative Forum. We are in the process of confirming Loretta Kreet's nomination to the Consumers Telecommunications Network Board. Telecommunications continues to be a vital and growing area of interest for financial counsellors and I thank our representatives and nominees for taking the consumer viewpoint into various forums.

AFCCRA continues to maintain its strong interest in bankruptcy law and administration which is an area of significant interest to financial counsellors across Australia. As the newly appointed AFCCRA representative, I shall try to continue the good work of Jennifer Gracie and Virginia Noonan in providing advocacy for low income bankrupts on the ITSA Bankruptcy Reform Consultative Forum. Aside from proposals to amend the Bankruptcy Act through the Bankruptcy Legislation Amendment Bill (BLAB) 2002, which is currently before Parliament, the Forum is also considering the impact of Part IX Debt Agreements. AFCCRA appreciates the opportunity for continuing consultation on these and other issues as they arise.�

Bankruptcy Legislation Amendment Bill 2002

The introduction to Federal Parliament of the BLAB 2002 on 21 March saw relief across the financial counselling sector that the '30 day cooling off period' proposal was absent. It seems that the concerns expressed by AFCCRA and several other bodies had been heard. We support the proposed 50% increase in income threshold for Part IX Debt Agreements and the increased capacity for ITSA to regulate Debt Administrators.�

However, we continue to oppose the proposed scrapping of early release and were particularly disappointed that despite considerable lobbying, there is no proposed amendment or repeal of Section 271 which discriminates against bankrupts with gambling debts. We shall be continuing our efforts to have amendment or repeal to this section included in the BLAB 2002. While we continue to lobby Daryl Williams, the Attorney General, we expect the legislation to be passed in the House of Representatives in late May due to the Government's majority. The BLAB will then go to the Senate where we have our best opportunity for amendment given that such an amendment was moved and passed by non-Government Senators to BLAB 2001.�

I encourage anyone with access to or contacts with Members of Parliament, especially Senators to raise this issue with them. I am happy to provide background information and can be contacted on 0407 042 483 or by email: janpentland@hotmail.com� anytime. Access ITSA's website for further information on the BLAB - www.itsa.gov.au�

Stop Press!!

The BLAB was passed in the House of Reps on 30/5/02 and has gone to the senate where we have good information that the Democrats will move the amendment to Section 271. The Senate sits next from June 17th to 27th. My personal preference would be to have this amendment moved and passed in the Senate without further complications at this stage. Please let me know your comments ASAP on 0407 042 483, anytime--Jan Pentland

Part IX Debt Agreements

ITSA is in the process of conducting a series of 'round tables' around Australia on Part IX Debt Agreements. These forums include various stakeholders being representatives of financial counsellors, registered trustees, creditors, debt administrators and ITSA staff. While financial counsellors across Australia generally support Part IX as an additional option for debtors where it is appropriate, our experience to date has been far from positive.�

Issues include unconscionable practices by Debt Administrators including excessive fees, charging fees up-front, not providing full information to debtors on the range of options especially voluntary bankruptcy, lodging of Part IXs in states other than where the debtor lives to maximise acceptance of dubious proposals, inaccurate information to debtors especially in regard to the affect on their credit record, etc.

ITSA's proposals to regulate Debt Administrators more thoroughly address some but not all of our concerns, and AFCCRA has provided feedback to Terry Gallagher, the Inspector general in Bankruptcy on the proposed changes to the regulations. There is a continuing problem for debtors to get out of an unsustainable Debt Agreement and I commend Richard Brading's excellent article in the March 2002 edition of ITSA's "New Directions".

National Competency Standards

AFCCRA has also been very busy with the Australian National Training Authority funded project to identify and validate national competency standards for financial counselling as part of the review of the Community Services Training Package. This will provide a framework for a national Diploma of Community Services (Financial Counselling) and is an important step in validating our sector, confirming the importance of training and qualifications for our profession, and providing a platform for future funding of training providers.

Consultations with financial counsellors in the various states and territories have been undertaken to enable discussion and comment. Contact your AFCCRA representative if you would like further information or access the consultant's website www.cshta.com.au�

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

New South Wales

The Financial Counselling Association of NSW (FCAN) held its annual conference at the beginning of May this year at a conference centre in Collaroy, near Sydney's northern beaches. Participants were treated to a million dollar view overlooking the ocean and comfortable shared accommodation.�

The theme of the conference this year was "Consumers in Focus" and the opening speaker was the local Member of Parliament, Mr Brad Hazzard.�

The keynote speaker was Ms Delia Rickard who is the Deputy Executive Director of Consumer Protection from the Australian Securities and Investment Commission (ASIC). She spoke of ASIC's new responsibilities in the area of Financial Services and the role ASIC will now play in consumer protection. Issues concerning ASIC both now and in the future lie in areas such as consumer over-commitment and superannuation. The compulsory nature of superannuation will make it the most important asset in people's lives she says, and with funds containing billions of dollars, the likelihood of fraud and other misconduct, may be high.�

The Annual General Meeting of FCAN members was held the month before the conference and Elizabeth Terry was elected as the new President of FCAN. Elizabeth has been a member of the executive committee for several years and was Secretary, for three years.

David Bell has taken up a position at Centacare Community Services in Liverpool. David has been working in the Upper Murray area on the border of NSW and Victoria as a financial counsellor for four years so the change to a city based agency will be a challenge he says he is looking forward to for many reasons.

Northern Territory

Kevin Rolfe has finally retired from the Tangetyere Council Financial Counselling Services but was delighted to be able to hand over, he said, to Leigh Shacklady. Leigh has been a senior officer at Centrelink in Alice Springs for the past three years and brings a wealth of knowledge and experience to the job. He has also worked extensively with aboriginal people in previous positions. We wish him well in his new role.

Peter Carratt in Darwin is also delighted to welcome his new financial counsellor Angela Dean who will be assisting him in their Palmerston Office. Angela comes from a banking background similar to Peter's and has taken to financial counselling with great enthusiasm. She works four days a week and Peter is now assistant manager.

We were very sorry to hear that Cheryl Cryer at Anglicare in Darwin has been seriously ill and had a spell in hospital. However, she is now back at work again and taking things carefully. She has stepped away from direct client involvement for now and will be focusing on her management and supervisory role which keeps her very busy anyway.

Western Australia

Joanne Lowthe at the Financial Counsellors Resource Project in Perth has taken over from Jacinta Laffer as Senior Resource worker. She comes from a Community Law Centre where she worked as a financial counsellor for three years and is looking forward to her new role as a support worker to the financial counsellors in WA.

At the moment she is hard at work on training programs and an introductory package for new financial counsellors which will be most useful for workers in the field who maybe somewhat isolated from the mainstream.

Queensland

Saskia ten Dam at Townsville Community Legal Service has been busy helping law students at the centre who attend for several weeks as part of their training. At the end of this period she helps write assessments on their performances and although it involves a lot of extra work, Saskia says she really enjoys working with them and helping them to understand the world of consumer debt recovery.�

Consumer education is an area that Saskia really enjoys and wishes sometimes that her busy job would allow her more time for it. Especially as she is starting to see the first signs of over-commitment in the big new housing estate in Townsville.�

This is the area where first home buyers rushed starry-eyed last year to buy and build their new homes and even before the inevitable rise in interest rates, Saskia had started to see the first of what she thinks will be many clients, particularly first home buyers, over the next year or two.

Margaret Clements at Central Queensland Financial Counselling Services in Rockhampton has had a huge pressure of clients over the last couple of months, mainly from referrals from other community services such as Centrelink.�

She has also seen several clients who have come unstuck on Part IX agreements that as far as she can see, should never have been accepted in the first place. These clients had Part IX's set up for them through debt administrators who charged fees from $800-$1,000 and all were sent to and accepted by the WA ITSA offices and as we know once in place a Part IX is difficult to get out of. See Richard Brading's article on this in the March 2002 edition of ITSA's 'New Directions'.

She is also seeing the effects of the closure of two major meatworks in the area which mean many families will lose their main source of income as unemployment sets in.

The Law Matters

A Request for Further and Better Particulars

by Chris Joyce, Solicitor, Wesley Community Legal Service

We often have clients who have been served with a civil court process in regards to a debt which is allegedly owed to a creditor. In NSW the client usually has 28 days to file a defence or confess to the debt. If the client does nothing, then the creditor will apply for, and get, judgment against the debtor.

For smaller debts, the creditor initiates legal action using what is termed "short pleadings." These short pleadings often do not clarify what the debt is all about. The client is entitled to have the short pleadings further clarified.�

The client can write to the creditor and request further and better particulars.�

Even if the claim is quite detailed, the client can still request further and better particulars. When particulars are requested in writing, the client should also request that the creditor not apply for judgement from the Court until at least 3 weeks have elapsed from the time of the supply of the particulars.�

If the creditor is not prepared to grant this request then the client may file a Notice of Motion in the Court requesting a Court Order to supply the further and better particulars. These requests can be used in all types of civil matters (e.g. unpaid loans, motor vehicle damage matters, enforcing guarantees, unpaid leases etc). A request for further and better particulars indirectly gives the client more time to consider their situation.�

However it should be remembered that there is no specific rule in NSW that states that the requested particulars must be supplied and nothing to stop a creditor from applying for judgement after 28 days. All the same, the Courts, on the basis of a Notice of Motion, often overturn judgements when the requested particulars have not been supplied.�

On the following page is an example of a letter requesting further and better particulars. This should always be followed by a short letter, asking whether or not they will comply with the request for particulars

SAMPLE LETTER REQUESTING FURTHER AND BETTER PARTICULARS

(Creditors address as found on statement of claim/civil summons)

Dear Sir /Madam,

Re: (clients name ) at ( plaintiff's name) Court Name & File no:
Request for further and better particulars

I refer to the above statement of claim/civil summons that was served on my client on xx/xx/02. An authority to act on behalf of my client is attached.

I request the following further and better particulars to enable my client to prepare a defence to your claim.�

(Possible questions)
1) Pursuant to section 34 of the Consumer Credit Code, the current balance of my client's account, any amounts credited or debited during the period xx/yy/01 to ww/gg/02, any amounts overdue and when each amount became due, and any amounts payable and the date it became due
2) Pursuant to section 76 of the Consumer Credit Code, a payout figure on the loan.
3) Pursuant to Section 163 of the Consumer Credit Code, a copy of the credit contract/ mortgage/ guarantee. A copy of any credit related insurance contract, a copy of any notices previously given to my client.
4) When and where the contract was signed.
5) Was the contract in writing, or verbal, or both partly verbal, and partly in writing, if so, the details and copies of any relevant documents.
6) Was any verbal advice/representations given to my client prior to her entering into the contract and if so the details of this advice.
7) Upon what specific terms of the contract does the plaintiff rely in her claim against the defendant
8) Has the contract been terminated, and if so, when. Was my client advised of this termination and if so how. What specific terms of the contract do you rely on to terminate the contract.
9) Please provide copies of all receipts in regard to payments my client has made.
10) You claim my client drove his vehicle negligently, so as to cause it to collide with Chris Joyce's red Honda, please provide full details of my client's alleged negligence.
11) Full details of any witnesses to the accident.
12) Full details of your Consumer Credit Code Compliance in regard the alleged guarantee. In particular, compliance with Section 50 to 56 in regard to the form of the guarantee, disclosure, providing copies of documents, any extension of guarantee etc. Also full details in regard to compliance with Section 82 in regard to pre-enforcement requirement compliance.�

I trust that you will provide all of the above requested further and better particulars as a matter of urgency and that you will allow us at least three weeks from the receipt of these particulars to file a defence. If this is not the case would you please advise me immediately so that my client may approach the Court with a Notice of Motion seeking an Order that you provide the requested further and better particulars.

Yours faithfully,

John Smith
Financial Counsellor

The new suffering

A clash between traditional and white law exacerbates the effects of gambling in indigenous communities. KATRINA BUSUTTIL reports

Aboriginal people believe that the land and all life on it was created by ancestral beings during the creation era, or what is commonly known as the Dreaming. The Dreaming also means the law and it determines the rights of the individual to the land, song, dance and artistic design. It further determines a set of obligations that include caring for the land and responsibility for each other.

This unwritten law determines roles and responsibilities regarding men's and women's business. Tribal or community elders were and technically still are, responsible for monitoring resources, and they meet regularly to determine the needs of the community. The elders' role is to facilitate fair distribution of resources and information and to ensure the wellbeing of the people.

Even though indigenous people living in urban societies today do not appear to practice traditional ceremonies relating to the Dreaming, they maintain strong links with their ancestral homelands and the tribal/community laws. Aboriginal culture is a progressive or staged culture in which knowledge is passed on after individuals are judged to be ready. This readiness for knowledge is actually worthiness: people must earn their position and status through their acknowledgement, comprehension and respect for the law, and its implementation.

TRADITIONAL KNOWLEDGE AND SHARING

Aboriginal people have no right to disseminate certain knowledge and information to white people, as it is secret business and must not be shared with those deemed inappropriate or unworthy. Acknowledging the culture and respecting the law is of great importance for workers attempting to service Aboriginal communities.�

Official policies of assimilation and mainstreaming have made indigenous people determined to hold on to their culture, and they are aware that its survival depends on survival of the law.�

Since white occupation, official policies have removed people from their traditional land and taken children away from their families. Among all this adversity, indigenous people pass on the law as a matter of pride and strength.�

Indigenous people have suffered a great deal and have been affected in several ways. An extremely high proportion of them have serious physical and mental health issues. The average life expectancy is 40 years, rendering it almost impossible for them to access superannuation, be eligible for an aged pension or enjoy the retirement benefits that non-indigenous Australians take for granted. Indigenous people are forced to live under white laws that at times have no significance to their needs or any relevance to their culture.�

The suffering is compounded by various issues including structural poverty, fear of officialdom, poor access and equity, poor culturally appropriate tertiary studies, lack of ability to self-advocate and limited services specific to indigenous needs. Most recently the broader indigenous community is being adversely effected by a new suffering - problem gambling.

GAMBLING IN INDIGENOUS COMMUNITIES

Indigenous people thrive on community interaction, sharing knowledge, supporting each other and socialising. Before the introduction of pokies, people gathered at each other's homes to share and socialise. On occasion they would play a friendly game of cards, money would be lost, money would be won, but regardless of the outcome the resources would remain in the community. In accordance with Aboriginal law, the winner supported the community with food and resources. This law, deemed to be an Aboriginal strength, ensured that all members of a community were cared for.

As pokies and other forms of gambling were introduced, indigenous people were among those who developed gambling problems. However because of their responsibility for one another, the effects can be much more widespread than in other parts of the community.�

An Aboriginal problem gambler can affect several members of the direct family, extended family and other families. Support is consistently rendered in various forms, such as food, rental assistance, clothes, cigarettes, accommodation and cash. Problem gamblers unconsciously create a domino effect on the broader community.

Official statistics do not indicate a high incidence of problem gambling among Aboriginal people, however workers with these communities witness suffering and financial stress due to problem gambling. Aboriginal law, otherwise a source of strength for the people has, due to legalised gambling, put communities at great risk. Problem gambling has had a negative effect on the already disadvantaged Aboriginal people.

Information from the financial counselling and gambling counselling services implemented by Gamblers Help Northern at the Victorian Aboriginal Health Service shows the detrimental effects of problem gambling. Generally, indigenous people are reluctant to access counselling services, especially when facilitated by white service providers. However, because of the presence of culturally sensitive and experienced workers and a consultative strategic plan, Gamblers Help Northern has been inundated with demand for services.�

The compounding effects of problem gambling constitute an issue that community elders were ill prepared to deal with. They have no option but to uphold the law of communal ownership of resources.

THE REPERCUSSIONS

The following is an example of an increasingly common situation of some of the negative repercussions through the communities.�

One Aboriginal elder, a long-term full-time employee and the head of a large and respected family group has suffered repeatedly due to problem gambling-even though he has never gambled. His home is used as a drop-in support centre for families that are struggling due to problem gambling. On many occasions up to twenty people turn up for a meal.�

The elder has had community members and family stay in his home for long periods after eviction for non-payment of rent, without making financial contributions.�

The elder has had financial support from other community members and financial institutions to meet his own expenses and the needs of the community. The elder is struggling, working full time, desperately wanting to uphold Aboriginal law but drowning in the negative repercussions of problem gambling.

WHAT NEEDS TO BE DONE

Workers offering services to the community cannot expect to enforce alternative strategies: there are limited preventive measures and very few options. Workers that are culturally aware will accept the law and work in accordance with the community structure. Problem gamblers in the community will be reluctant to access psychotherapeutic services due to the fear of white "power people" playing around with their minds.

However, trust is a crucial factor among indigenous people. Workers should gain trust and respect by being culturally knowledgeable and aware that a community can be supported even though it should never be changed. The Dreaming law is precious and of paramount importance. There are no short-term solutions to the new suffering experienced due to problem gambling.

Community education programs directed to indigenous community members and elders will help to establish links and get the message across. The greater the trust in these services the greater the access, and the greater the possibility that problem gamblers will seek the necessary support.

The Aboriginal Dreaming and the survival of the culture is a wonderful part of a special and spectacular community. Indigenous people have survived many aspects of white society, and with the support of culturally sensitive services the negative effect of the new suffering can be countered.

Katrina Busuttil is a financial counsellor and indigenous access worker at Gamblers Help Northern Melbourne. This article first appeared in the Consumer Rights Journal November/December 2001 edition.

Teleconference on clients with an Aboriginal focus

A teleconference was recently held with participants who work in remote communities with aboriginal clients. This is a short summary of some of the issues discussed.

Book-up

The practice of store keepers extending credit to aboriginal customers in return for direct access to their bank accounts or "Book-up" as it is commonly known, continues to be of concern to workers. The potential for abuse is high.�

However, one participant reported that in recent months there has been consultation by people from ATSIC, ACCC and ASIC with traders and store keepers in order to launch a "Store Charter". This is a voluntary agreement by traders to adhere to self-regulatory standards of practice in regards to consumer rights. They hope by this, to implement a firm commitment to placing some controls over stores and traders.

Other Community Workers

Some financial counsellors are encountering hostility and suspicion from other community workers when going into remote territories. They may also encounter disharmony between groups within the community, including unwillingness to work together and jealousies regarding the perceived amount of attention given by workers to different groups.�

It was felt that gaining trust and building rapport in remote communities is paramount to working successfully with different groups including other community workers. This takes time but has had good results.�

Another issue discussed was the vulnerability of financial counsellors going into isolated areas. This lead to a discussion on strategies of self protection when visiting remote areas. The main one identified was to always be accompanied by a fellow worker.

Car Sales

Aggressive high pressured sale of cars by car dealers taking new cars to a community at time of royalty distributions is still prevalent. Most are cash sales with finance contracts rarely used.�

However, there have been some cases where aboriginal clients have been unable to get into town to see cars being advertised but have been quite willing to purchase cars worth several thousand dollars just from a photo in the newspaper.�

These are the type of clients who typically do not consider whether loans are affordable and even when obvious unjust, or unconscionable conduct by dealers is discovered, aboriginal clients have difficulty in confronting and arguing for their rights. This can be frustrating for workers when glaring issues arise.

Gambling�

Poker machines have had an enormous impact on some aboriginal communities. Beforehand, people would socialize in their homes and play cards. The winnings would then be shared out within the group and stay in the community but pokies mean money is lost and resources are taken from the whole community.�

Treatment of gambling addictions with aboriginal clients is difficult and therapeutic solutions can be viewed with suspicion. (See Katrina Busuttil's article previous page)

Some positive things happening to address these issues:

Teaching of basic literacy and numeracy skills is slow and not always successful but good results can be achieved with more mature clients
Gambling - hotels and the gamming industry in general are now very sensitive to criticism and approaches to local bodies for funding for counselling programs, have been successful
Building trust can be crucial and workers gain this by being culturally knowledgeable and aware, and working within the aboriginal framework�

In Conclusion

The teleconference gave participants an opportunity to highlight the differences and similarities in their work and to establish networks. Specific solutions to all the issues raised was not the key objective. Instead, by discussing issues in this way, participants were given the chance to reflect on the work they are doing and some of the things they have learnt along the way.�

In the Media

Credit Cards entice US

Credit card companies tempted US households with a record number of card solicitations last year--and consumers took the bait. Almost 80 per cent of American households got an average of five credit card offers a month in 2001, reported Mail Monitor.
Australian Financial Review, 12 April 2002

Bank boosts Credit Corp fortunes with $17m ledger

Distressed debt collector Credit Corp has acquired another $17 million in debt from a leading bank. The managing director of Credit Corp, Simon Calleia, said the purchase of the ledger from the bank was an indication of the strengthening market for distressed debt.
Banks had been wary about selling distressed debts to third parties because of possible damage to the bank's reputation if the collection agency used unsavoury tactics.�
Credit Corp was also pleased because the deal flowed from its recent acquisition of Audit Collection Services and which included A&K Mercantile Services. As Credit Corp was exposed to agency collections and debt purchase, it was in an excellent position to judge the quality of a ledger before purchase, he said
Australian Financial Review, 19 April, 2002

Debt-ridden households at rising rates risk

Many borrowers will be left financially vulnerable by the imminent rise in interest rates as household debt reaches unprecedented levels.
Australia now has one of the highest household debt levels in the Western world. Figures released by the Australian Bureau of Statistics yesterday show debt as a percentage of disposable income grew to a record 119 per cent, one of the highest rates among developed nations.
The Australian, 28 May 2002

Tough Times ensured for small business

Small business will still have to deal with the impact of escalating public liability insurance premiums in the short term, despite the measures announced at last week's joint ministerial meeting on insurance.
According to the latest survey from Australian Industry, small business was the hardest hit by the post-September 11 rise in public liability premiums.
Last month's snapshot survey of 150 companies revealed that average industry premiums are expected to rise by 41 per cent. But for small companies with 25 or fewer employees, the rise is likely to be more dramatic--the average increase is expected to reach a whopping 65 per cent.
Australian Financial Review, 2 April, 2002

Baycorp buys control of Alliance

Credit services bureau Baycorp Advantage yesterday confirmed it had bought full control of its debt collection business, Alliance Group Holdings, for $8.4 million by buying out its joint-venture partner, Commonwealth Bank of Australia.
The sale of CBA' one-third stake comes after months of friendly negotiations as Baycorp seeks to integrate the businesses of the two merged groups, Data Advantage and Baycorp Holdings.
The sale is conditional upon Commonwealth Bank agreeing to extend its existing two-year contract for Baycorp's credit collection services for three years.
The Alliance Group was established three years ago as a specialist receivables management business and will now trade as Baycorp Advantage Collection Services.
The purchase overshadowed rising concerns that Dun & Bradstreet's rival consumer credit bureau had been underestimated.
The chief executive of Dun & Bradstreet Australasia, Christine Christian, is making presentations to investors and institutions this week.
D & B is understood to be telling investors it will target the entire lending industry.
Australian Financial Review, 22 May 2002

Telstra's Credit Management Working Group

The Credit Management Working Group meet on a quarterly basis to discuss various consumer issues relating to the world of telecommunications. The group is made up of financial counsellors from SA, QLD, VIC and NSW as well as other consumer reps from organisations such as Consumer Credit Legal Services and ACOSS, and representatives of Telstra management.

Listed below are some of the areas of discussions held during the last meeting in April this year. During this meeting we were also told of the services package Telstra will be offering low income earners in return for the lifting of a cap on line rental charges.

New Credit Scoring system�

Telstra now have in place, and have been using for some time, a credit scoring system for all new applications for a telephone service. By this system, they hope to identify more accurately their high or low risk customers up front. They will refuse service to those who have a record of serious arrears or unpaid existing debt and there may be some restrictions on others who are identified as high risk such as bankrupts.

Default listing of final overdue accounts that are�
>60 days and > $100

Telstra have decided to resume listing of overdue final accounts with Baycorp Advantage Ltd (formerly Credit Advantage) and started doing so on May 25th. However, if the debt is in dispute it will not be listed and normal Telstra complaint processes apply ie contact Telstra for final accounts on:

Fixed phone accounts - 1800 151 992
Mobile phone accounts - 1800 657 914

Authorisation issues�

Financial counsellors are still experiencing embarrassing situations where Telstra operators are insisting on a birth date from the counsellor even when the client is present and has verbally given their consent to the operator to act on their behalf.�

If you are still experiencing these difficulties please contact Robert Morsillo manager of Consumer Relations, Telstra Consumer Affairs, on (03) 9634 5573 or fax (03) 9634 8835 or 0419 871 737

New services for people on low incomes

Following a Federal Cabinet decision on price controls, Telstra has announced a new package of product and service options called "Access for Everyone" aimed at people who are on low incomes.�

Telstra will phase in these new services from July 1st, 2002

Included in the package is:

A 1800 Message Service which enables homeless people or those without stable accommodation and job seekers access to a free message service.�
A Telstra Emergency Relief Program which will provide financial support for up to 100,000 fixed line customers who are in financial crisis. It will be administered by welfare groups.
Homeline Classic which will be a line rental plan providing a relatively lower line rental price/higher call price option for those who have relatively low levels of telephone use. In time this product will replace HomeLine Budget
Improvements on the Pensioner Concession Scheme which already supports approximately one million people by offering telephone call incentives and facilitating access to the Internet.
Enhancements of InContact by allowing outgoing calls to certain counselling and support services and access to a message service.
Sponsored Access/Special Needs is a service which supports people in need of emergency housing and Telstra will sponsor free access for an incoming call number in up to 6,000 homes.�

Further information is available at:

www.telstra.com.au/accessforeveryone/
www.telstra.com.au/newsroom�
www.dcita.gov.au/nsapi-text/?Mival=dca_whatsnew&template=WhatsNew�

Notes and Notices

New edition of the Consumer Debt Recovery Law book

Published by the Federation Press, the second edition of this practical handbook has just been released. It is jointly written by Bruce Kercher, a Professor of Law at Macquarie Univeristy, Sydney, Betty Weule, former manager of Credit Line Financial Counselling Services, and Richard Brading, Principal Solicitor of Wesley Legal Service.�

As stated in the preface, the aim was to appeal to creditors, collection agents and financial counsellors who needed a concise, accurate statement of the laws governing debt recovery which is seen by many as a neglected area of the law.�

The material is set out in an intelligent, logical fashion and is easy to read and refer to. If you would like your own copy, please see the brochure insert with this edition for details on how to order one.

American Express Contact

Some financial counsellors have had difficulties negotiating with American Express. It appears that American Express have not received faxes and written mail sent by financial counsellors on client's behalf.�

If you have any difficulties please contact Narelle Mills who is the Public relations Manager. She does not have any authority regarding negotiation of payments, however, she will ensure the process in relation to negotiating with American Express is as it should be.�

Narelle Mills can be reached on (02) 9271 3135 or fax (02) 9271 3231.�

(courtesy of Rosie Atkinson, Senior Resource Worker, SA)

Banking Ombudsman Problems/issues/queries

Carolyn Bond from the Consumer Credit Legal Service in Victoria was appointed to the Australian Banking Industry Ombudsman Board as a consumer representative in December 2001. Since her appointment she has raised issues in relation to procedures and reporting and is very keen to get any feedback financial counsellors may have in relation to their experiences with the ABIO.�

In particular she would like to know if the process is clear and if workers or their clients have any problems in lodging a complaint with the ABIO. Please contact Carolyn Bond on (03) 9670 5088 or by email bond@vicnet.net.au� if you have these problems

Carolyn was the author of a report recently published called "Selling their customers Out--Consumer Problems with Debt Collection Outsourcing in Australia" which raised issues about banks and finance companies on-selling their debts. It commented specifically on the practices of Collection House and their solicitors ALR Lawyers, and addressed many of the issues that financial counsellors and other caseworkers have come up against in the last twelve to eighteen months when dealing with Collection House. If you would like a copy of the report you can email Carolyn on bond@vicnet.net.au�

'Book up' now under ASIC

On 11 March, 2002, under the Financial Services Reform legislation, the Australian Securities and Investments Commission (ASIC) took on the jurisdiction for consumer credit. This means issues concerning 'Book up' which involve a trader offering small amounts of short-term credit, typically to indigenous people, now falls under their protection.

The Australian Competition and Consumer Commission, the Australian Banking Industry Ombudsman and the NT Anti-Discrimination Commissioner are also involved and have set up an informal collaborative group. Representatives recently visited a number of stores in central Australia and met with Indigenous groups to present a draft Store Charter that is particularly focused on stores that service Indigenous communities.�

For further information, a report that was prepared for ASIC by Gordon Renouf after lengthy consultation with various groups including financial counsellors is now available in booklet form entitled "Book up" Some Consumer Problems and can be ordered through ASIC's Infoline 1300 300 630 or accessed through their website www.fido.asic.gov.au under Credit & Borrowing.

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