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.
