Sharkwatch October 2003

NOTES & NOTICES

Correction for Telstra Disability Enquiries Number

In the last edition of Sharkwatch we noted that the number for the Telstra Disability Enquiry Hotline was 1800 808 981. Thanks to Annabel Mayo for pointing out that this is in fact the teletype number (oops). The real number is 1800 068 424.

Customers have the right to cancel direct debits

(from SA Circular, August, 2003)

At a meeting convened by ASIC in July 2001, a number of concerns were raised in relation to direct debits. The Australian Payments Clearing Association (APCA) has now made some changes to the rules to make it clear that customers have the right to cancel a direct debit authority with their financial institution – for example, the bank can’t tell the consumer to go back to the trader to cancel the direct debit.

I am interested to know whether caseworkers are seeing the continuing problems with cancelling direct debits, or any other direct debit problems. If so, or if you have any comments, I’d be happy to raise these with ASIC.

Carolyn Bond, Consumer Credit Legal Service (Vic) – bond@vicnet.net.au

CCLC seek your thoughts on solicitor lending

Here is a note from the Consumer Credit Legal Service (CCLS) Victoria:

Consumer Credit Legal Service (Vic) has been funded by the Consumer Credit Fund to conduct a research project on the impact of solicitor lending to vulnerable or disadvantaged consumers.

Some legal firms act as an intermediary for mortgage loans – by bringing together clients who have money to invest with potential borrowers. In other cases, lawyers create a managed fund or nominee company to provide the funds for potential borrowers.

These solicitor loans are usually offered on an “interest-only” basis, where the principal is due in a lump sum at the end of the loan period – often around 2 years. Most commonly, these loans are business loans, provided to builders or developers. However, we are increasingly seeing some law firms provide these interest-only loans to consumers for home finance.

The aim of the CCLS research project is to document the scope and nature of problems for consumers using this type of loan, and to examine any regulatory options for change. As part of the project, we plan to survey or interview individual consumers who have taken out solicitor loans.

Although the project will focus on the experiences of Victorian consumers, we are also interested to gain a picture of the issue on a national level through case studies and comments from workers in other states.

So, if you:

have any (positive or negative) views on solicitor lending for home finance; and/or
have any clients who have taken out solicitor loans, and who might be prepared to complete a survey, or have their story included as a case study.

please contact Nicola Howell, CCLS Policy and Research Officer, on (03) 9670 5088 or at nicola.howell@iinet.net.au as soon as possible.

At this stage, all you need to do is indicate your interest. We will then discuss with individual workers how best to collect and feed their experiences and views, and those of their clients, into the research project.

We look forward to hearing from you.

Anti-Discrimination Law in Australia: An Overview

Emilie Sutton

In Australia it is unlawful to discriminate against people on certain grounds in various areas of public life. There are State, Territory and Federal laws that make various types of discrimination unlawful. Anti-discrimination law is therefore not uniform across Australia. This article provides a brief overview of the scope of Federal anti-discrimination law (which protects the rights of everyone in Australia) and then outlines the grounds of discrimination that are unlawful in each State and Territory.

Federal law

There are four different federal laws that protect people from discrimination: the Racial Discrimination Act 1975, the Sex Discrimination Act 1984, the Disability Discrimination Act 1992 and the Human Rights and Equal Opportunity Commission Act 1986. The Human Rights and Equal Opportunity Commission (HREOC) administers and investigates complaints of discrimination under these laws.

Racial Discrimination Act

The Racial Discrimination Act makes it unlawful to treat people less favourably because of their race, colour, descent or national or ethnic origin. The Racial Discrimination Act only covers certain areas of public life, namely employment; trade union membership; education; the entry to and use of public building and places; accommodation; the sale of real estate; and the provision of goods and services.

The Racial Discrimination Act also makes acts of racial hatred unlawful. Public acts that are done in whole or in part because of the race, colour, or national or ethnic origin of a person or group, and which are reasonably likely in all the circumstances to offend, insult, humiliate or intimidate that person or group, will be unlawful unless one of the exceptions applies.

Sex Discrimination Act

Under the Sex Discrimination Act it is unlawful to treat someone less favourably because of their sex, marital status or pregnancy. It is usually unlawful to treat someone unfairly on these grounds in the areas of employment; education; the sale or supply of goods and services; the provision of land, housing and other accommodation; the membership and activities of licensed clubs; and the implementation of federal laws and programs. The Act also makes sexual harassment unlawful.

Disability Discrimination Act 1975

Under the Disability Discrimination Act it is generally unlawful to discriminate against someone because they have a disability. Under the Disability Discrimination Act it is usually unlawful to discriminate against someone with a disability in the areas of employment; education; access to premises used by the public; the provision of goods, services and facilities; accommodation; the purchase of land; the activities of clubs and associations; sport; and the administration of Commonwealth government laws and programs.

Types of discrimination

There are two types of discrimination – direct and indirect. Direct discrimination occurs when someone is treated less favourably simply because they possess a particular characteristic. For example, if a credit provider refused to give someone a loan simply because they are an Indigenous Australian, this would be direct race discrimination.

Indirect discrimination is more complex. It occurs where there is a requirement (such as a rule or policy) that everyone is required to comply with but which has a negatively disproportionate effect or result on particular groups of people. Unless the requirement is reasonable having regard to the circumstances of the case, the imposition of the requirement will probably constitute unlawful indirect discrimination. For example, if a financial institution refused a request from a customer who has a significant vision impairment to provide information relating to the loan they are applying for in an alternative format, this might be indirect disability discrimination.

Exceptions

The Race Discrimination Act, the Sex Discrimination Act and the Disability Discrimination Act contain a number of important exceptions that affect people’s rights. If someone believes they have been unlawfully discriminated against they should contact HREOC before they lodge their complaint to check that the conduct they want to complain about is covered by the relevant Act.

How to lodge a complaint at HREOC

If a person believes they have been unlawfully discriminated against under the Sex Discrimination Act, the Race Discrimination Act or the Disability Discrimination Act, they can lodge a complaint with HREOC.

HREOC provides a free complaints service. The person making the complaint (called “the complainant”) can use either the standard form available from HREOC or they can write a letter. The complaint can be written in any language. It is important that the person lodging the complaint includes:

Their name, address and contact details
The name and contact details of the person, people and/or organization they believe have unlawfully discriminated against them
An account of what happened, where it happened and when it happened.

Complaints of unlawful discrimination under the Race Discrimination Act 1975, the Sex Discrimination Act 1984 and the Disability Discrimination Act 1992 must generally be lodged with HREOC within 12 months of the incident in question.

HREOC endeavours to resolve complaints by conciliation. Trained conciliators attempt to assist both parties to reach a settlement to the complaint. The types of outcomes that parties might agree to during the conciliation process include a formal apology, financial compensation, or an agreement that an organization will run a compulsory training program for members of staff to ensure that people are not discriminated against in the future.

The Human Rights and Equal Opportunity Commission succeeds in resolving most complaints by conciliation. If the Human Rights and Equal Opportunity Commission is unable to resolve a complaint of unlawful discrimination, the President of the HREOC will terminate the complaint. If the complainant would like the Federal Court or the Federal Magistrates Services to hear their complaint, he or she must lodge an application with the court within 28 days of the date of termination.

State and Territory anti-discrimination laws

Each Australian state and territory has enacted legislation that makes it unlawful to discriminate against people on certain grounds in various areas of public life. As the table on the next page demonstrates, some states and territories offer much greater protection against discrimination than others. The particular areas of public life that are covered by each state and territory also vary. If you think your client has been unlawfully discriminated against, you should contact the relevant state or territory commission to confirm that it has the power to investigate your client’s complaint. They can also provide you with information about the complaint resolution process that they use. The contact details for the commission in each state and territory are listed below.

Time limits for lodging complaints

In Victoria, Queensland, Western Australia and the Australian Capital Territory people generally have 12 months to lodge a complaint. In New South Wales, the Northern Territory and South Australia people generally have six months to lodge a complaint. However, these time limits may be extended (except in South Australia) in certain circumstances – for example, if the person can demonstrate that there was a good reason why they did not lodge their complaint within the time limit.

Contact Details

Human Rights and Equal Opportunity Commission
Postal address: GPO Box 5218, Sydney NSW 1042
Complaints Infoline: 1300 656 419
TTY: 1800 620 241
Facsimile: (02) 9284 9611
Website: www.hreoc.gov.au

State and Territory Commissions

Australian Capital Territory Human Rights Office
Telephone: (02) 6207 0576
TTY: (02) 6207 0525
Website: www.hro.act.gov.au New South Wales Anti-Discrimination Board
Postal address: PO Box A2122, Sydney South 1235
General Enquiry Service: (02) 9268 5544
TTY :(02) 9268 5522
Tollfree: 1800 670 812
Website: www.lawlink.nsw.gov.au/adb Northern Territory Anti-Discrimination Commission
Telephone: (08) 8999 1444
TTY: (08) 8999 1466
Website: www.nt.gov.au/adc/ Queensland Anti-Discrimination Commission
Information and Enquiry Service: 1300 130 760
TTY: 1300 130 680
Website: www.adcq.qld.gov.au South Australia Equal Opportunity Commission
Telephone: (08) 8207 1977
Website: www.eoc.sa.gov.au Tasmania Anti-Discrimination Commission
Telephone: (03) 6224 4905
Website: www.justice.tas.gov.au/adc/adcfrontpage.htm Victoria Equal Opportunity Commission
Telephone: (03) 9281 7111
TTY: (03) 9281 7110
Website: www.eoc.vic.gov.au Western Australia Equal Opportunity Commission
Telephone: (08) 9216 3900
TTY: (08) 9216 3936
Website: www.equalopportunity.wa.gov.au

Grounds of Discrimination Covered by State and Territory Law

	ACT	NSW	NT	QLD	SA	TAS	VIC	WA
Age	Y	Y	Y	Y	Y	Y	Y	Y
Breastfeeding	Y		Y	Y		Y	Y
Criminal record	Y		Y			Y
Disability or impairment	Y	Y	Y	Y	Y	Y	Y	Y
Disability vilification						Y
Family responsibility / Family status / Carer status	Y			Y		Y	Y	Y
HIV vilification		Y
Homosexuality		Y
Homosexual vilification		Y
Inciting hatred on the grounds of sexual orientation						Y
Inciting hatred on the grounds of unlawful sexual activity						Y
Irrelevant medical record			Y			Y	Y
Lawful sexual activity				Y		Y	Y
Marital status or relationship status	Y	Y	Y	Y	Y	Y	Y	Y
Membership of employee association / union activity	Y		Y	Y		Y	Y
Membership of employer association	Y		Y			Y	Y
Parenthood or parental status	Y		Y	Y		Y	Y
Physical features							Y
Political beliefs	Y		Y	Y		Y	Y	Y
Pregnancy	Y		Y	Y	Y	Y	Y	Y
Profession, trade, occupation or calling	Y
Race	Y	Y	Y	Y	Y	Y	Y	Y
Racial harassment								Y
Racial vilification	Y	Y		Y	Y	Y	Y
Religious belief	Y		Y	Y		Y	Y	Y
Religious vilification / hatred				Y		Y	Y
Sex / Gender	Y	Y	Y	Y	Y	Y	Y	Y
Sexual harassment	Y	Y	Y	Y	Y	Y	Y	Y
Sexuality	Y		Y	Y	Y	Y	Y	Y
Sexuality vilification				Y		Y
Transgender/Transsexuality/Gender History/Gender Identity	Y	Y	Y	Y	Y	Y	Y	Y
Transgender vilification / Gender identity vilification		Y		Y		Y

The above table gives a précis of the specific laws relating to discrimination that apply in each State and Territory. Note that vilification is defined differently in each Act. For further information, use the contacts listed above.

Emilie Sutton is the solicitor from Credit Helpline NSW. In a previous incarnation, Emilie worked in the legal and policy branch of the NSW Anti-Discrimination Board, and she has a strong interest in all aspects of human rights.

AFCCRA UP-DATE

Jan Pentland
(Chairperson of AFCCRA)

AFCCRA Council

The AFCCRA Council met by national phone link up on September 30. News of financial counselling around the country was shared. A range of issues were discussed, including the continuing challenges of adequate funding both for AFCCRA itself and for the financial counselling sector generally.

Professional standards issues for financial counsellors are particularly relevant at present with ASIC continuing its exploration of how financial counselling will be impacted by the Financial Services Reform Act. The Act requires licensing of providers of advice on financial products. AFCCRA has provided background information on financial counselling practice and the sector generally to ASIC. In final preparation of an issues paper, ASIC is currently contacting each state and territory for specific information.

AFCCRA will facilitate and fund a second national phone link up on 13 October of representatives from each state and territory to discuss progress on the implementation of the National Competency Standards for the Diploma of Community Services (Financial Counselling). A report of the discussion will be provided for the next edition of the ‘AFCCRA News’, due out at the end of November.

AFCCRA’s current work on bankruptcy issues, including concerns about the way that the defence services deal with indebtedness and bankruptcy with defence personnel, was discussed. Together with interested financial counsellors across Australia, AFCCRA is considering how these concerns can best be raised and addressed.

Telecommunications is another area of interest with AFCCRA nominees represented in various forums. AFCCRA Council members were pleased to have Lola Mashado, who represents AFCCRA on the Telstra Consumer Consultative Council and the Telstra Credit Management Working Group, join the phone link up to brief us on her work. Lola’s continuing efforts were acknowledged and are appreciated.

The AFCCRA Annual General Meeting will be held by national pone link up on Monday 17 November.

AFCCRA Nominees

AFCCRA has nominated John Mumford to a consumer representative position on the Consumer Law Centre Victoria (CLCV) Board. John is replacing Barry Hahn who has been the AFCCRA Nominee since the inception of CLCV – thanks for your hard work, Barry.

Following its work on adult literacy, ANZ approached AFCCRA to nominate two financial counsellors to the ANZ Adult Learning Program Advisory Committee. A high standard of expressions of interest were received. After considerable deliberation, the AFCCRA Council nominees are Narelle Brown, financial counsellor and Co-ordinator at Ryde Eastwood Financial Counselling Service as the metropolitan representative, and Barbara Look, financial counsellor for Anglicare Gippsland Leongatha, as the rural representative.

SAFCA Conference

As Chairperson of AFCCRA, I had the privilege of being a keynote speaker at the annual conference of the South Australian Financial Counsellors Association (SAFCA) on September 11. Being originally from South Australia, it provided a great opportunity to visit my home state, to renew friendships with many of the workers there, and to broaden networks as well as promote the current work of AFCCRA. Many thanks to the SAFCA members who made me most welcome and in particular to AFCCRA’s secretary, Rosemary Warren, for her hospitality.

Please contact Jan Pentland on 0407 042 483 or at janpentland@hotmail.com if you have any queries about any of the above.

Call for Armed Forces and Bankruptcy Cases: Can You Help?

The plight of armed services personnel who have debt problems and/or become bankrupt has become something of a talking point in recent months, and it has become clear that this is a serious problem that impacts not only on employees of the armed forces and their families, but also on the those financial counsellors who seek the best outcomes for their armed forces clients. AFCCRA has identified this issue as being one of national importance, and wishes to gather as much casework evidence as possible to support their lobbying efforts. If you could assist AFCCRA by providing anonymous, relevant casework details, Jan Pentland would appreciate hearing from you. Her contact details are: Ph. 0407 042 483; Email: janpentland@hotmail.com.

The Law Matters

by Richard Brading
Principal Solicitor
Wesley Community Legal Service

Part X Arrangements — Occasionally an Option

ITSA has recently completed a review of Part X arrangements (available at www.itsa.gov.au). Part Xs sit somewhere between Part IX debt agreements and full bankruptcy. It’s like bankruptcy without going bankrupt. Financial counsellors rarely encounter them, yet they can be a useful option for clients who have higher incomes or substantial assets. In 2001/02, there were 313 Part X administrations in Australia, compared with 3,258 Part IX's and 24,114 bankruptcies. They are particularly popular in south-east Queensland.

A Part X arrangement could be used where an insolvent debtor has a significant asset or high income and would like to avoid the stigma of bankruptcy, or cannot get all creditors to agree to an informal arrangement. A Part X arrangement will be registered on Baycorp and the National Personal Insolvency Index but it means the debtor can say no when asked "have you ever been bankrupt?" However, a lot of forms now also ask if you have been in a Part X, so it can still disqualify the debtor from a few things, such as being a builder in some states.

To kick off a Part X arrangement, a debtor must find a "controlling trustee", who is a registered trustee. A list of registered trustees can be obtained from your local ITSA office. Financial counsellors and debt administrators cannot administer Part X’s. If the debtor decides to go ahead, the debtor must sign an "authority" form giving the controlling trustee power over the debtor's property and affairs. Finding a good trustee is critical, as it is the trustee's job to convince the creditors to approve the Part X. The controlling trustee will charge the debtor $5000 or more to prepare for, and hold a creditors meeting, and another $5,000 or more to manage the Part X if it is approved by creditors. If rejected by creditors, the first $5,000 is not refunded!

Once the debtor signs the authority appointing a controlling trustee, debt collection action is mostly stopped, such as seizure of property by the sheriff. The trustee then holds a creditor's meeting and presents the debtor's proposal. The proposal may be for the debtor to pay off debts over time (deed of arrangement), or to transfer all property to the creditors (deed of assignment), or for creditors to accept a reduced amount in satisfaction of their debts (composition). More than half of all Part X's are compositions. A debtor under a composition or deed of arrangement cannot be a director of a company. A debtor under a deed of assignment can be a director of a company.

At the creditors meeting the trustee presents details of the debtors financial position and reasons why the proposal should be accepted. The debtor should attend the meeting and answer questions put by creditors. It is necessary for at least 50% of creditors by number and 75% by dollars to approve the Part X at the creditors meeting. Otherwise the proposal is rejected. If rejected, creditors can require the debtor to file a debtor's petition within 7 days. Unfortunately there has been some abuse of Part X's by a few debtors which has made some creditors hostile to them. Abuse may involve including fictitious creditors or leaving out genuine creditors.

The ITSA review recommended improving the quality and quantity of information about the debtor's situation prior to the creditor's meeting. Creditors with adequate information are more likely to vote in favour of the Part X. About two out of three Part X proposals are accepted by creditors at the meeting, but the ATO generally votes against them. However, family and friends may be owed significant sums, and they may have enough votes to overcome a small number of hostile creditors. If the Part X is rejected, the debtor could consider entering bankruptcy and then try to obtain an annulment by making a compromise with creditors under s.74 of the Bankruptcy Act.

If the creditors accept the proposal, then the controlling trustee has the legal power to collect and distribute the debtor's property to creditors. The controlling trustee has wide powers over the debtor until the administration is complete. For example, the trustee will usually take the debtor's passport and not permit any overseas travel.

The creditors also have the power to appoint a different trustee if they don't like the one chosen by the debtor. The review received a number of complaints about trustees. Complaints about misconduct by trustees can be investigated by ITSA. However, the review received a number of comments that ITSA did not do enough to stop misconduct. The review also recommended that a prescribed information sheet be available to debtors setting out the advantages and disadvantages of a Part X arrangement, similar to bankruptcy and Part IX debt agreements. This would be a useful resource for financial counsellors. In addition, the Part X Review provided a range of administrative measures that would streamline the process, without recommending radical change. The decline in the popularity of Part X’s seems due to a lack of enthusiasm on the part of both debtors and creditors.

Part X’s remain a niche option to be discussed with the handful of wealthier clients that financial counsellors see.

Sale of Surrendered Cars

Luxury cars have a nasty habit of losing value quickly and clients should always be warned about the risk of letting them be sold at auction by a credit provider. Cars sold at auction by finance companies usually go for rock-bottom prices, to the great disappointment of the debtor. Prior to surrender or repossession, a client should be advised to obtain written evidence as to the car’s value from a car dealer or other expert. Photos of the car should be taken and other evidence gathered as to the condition of the car.

The recent decision of McGregor v BMW Finance Limited [2003] NSWCTTT 380, provides guidance on what is required of a credit provider in selling a surrendered motor vehicle. In early 2002, Mr McGregor surrendered his 1990 BMW 525i with an odometer reading of 360,217 km, to BMW Finance in Sydney. BMW Finance then sent him a written notice required by s.78(3) Consumer Credit Code. The notice said:

“BMW’s estimate of the value of the goods is $13,000 (NOT THE ACTUAL VALUE)”

In fact, BMW Finance had not bothered to inspect the car, but instead relied on the “Red Book” value of that model. The Red Book value for that model BMW, with an odometer reading of 260,000 km was in the range $9,200 to $11,400.

BMW Finance then sold the car at public auction for $7,000. Mr McGregor was not happy, and made an application to the Tribunal for compensation. He said that he had spoken to a car dealer at the time of surrender who told him that the value of the car was $18,000. If he had been informed that the vehicle was only worth $7,000, he would have requested time to arrange a private sale.

BMW Finance argued that it had complied with the Code requirement by providing “an estimate of the value of the vehicle based on an estimate for vehicles of the same make and model in good/average condition.”

The Tribunal rejected BMW’s argument. It held that the Code requires the credit provider to provide a genuine estimate of the actual surrendered goods, not a general figure from a book. This is to enable the consumer to rely on that estimate when deciding whether or not to exercise the right given by s.78(5) of the Consumer Credit Code to introduce a purchaser to the credit provider. By simply using the Red Book, BMW Finance had failed to provide a genuine estimate of the actual vehicle.

In deciding the amount of compensation to award Mr McGregor, the Tribunal noted that the auction price was only $7,000, but that Mr McGregor had been told a figure of $18,000 and relied on the faulty notice which referred to $13,000. The Tribunal then assessed the value of the vehicle at $12,000, but did not explain how that figure was calculated. BMW Finance was therefore ordered to pay $5,000 compensation to Mr McGregor.

Note that had BMW Finance bothered to provide a genuine estimate of the car, the result of the case might have been in their favour, as there is no right in the Code to obtain compensation if the actual sale price turns out to be less then a genuine estimate.

Book Reviews

In The Consumer Interest

Review by Norm Hannelly

I recently had the opportunity to read “In The Consumer Interest”, published by SOCAP (The Society of Consumer Affairs Professionals in Business Australia Inc.). In my opinion this book is a must for financial counselling trainers and consumer educators. It is a great reference in detailing the history of consumer affairs in Australia.

Sub-titled “A selected history of consumer affairs in Australia 1945-2000” and edited by Simon Smith, this publication is a concise and informative description of the issues and the protagonists in the evolution of consumer rights in this country.

The chapters include, The Organised Consumer Interest, Financial Services, Communications, Health, Food Manufacturing and Access to Justice.

The layout is excellent .There are ten essays written by acclaimed professionals in their respective fields.

At the end of each chapter, which usually contains two essays, there are short biographies of relevant “Consumer Champions”, who featured in the chapter.

The line-up of “Consumer Champions” is most impressive. There are twenty eight, including Ben Chifley, Ruby Hutchison, Lionel Murphy, Philippa Smith, Don Dunstan and Syd Einfeld.

To quote from the dustcover, “In the Consumer Interest charts the shifting responses of business and industry to consumer issues and consumer activism in the second half of the 20th century, and the evolving role of government as regulator”

And further, “As the sophistication of Australian consumers has grown over the past 50 years, so too have the reach and influence of consumerism. Today, our understanding of what we are entitled to as consumers goes beyond safe and serviceable merchandise and fair contracts to include a diverse range of services such as safe and universal health care and affordable legal advice, and embraces concepts of equity, access and social justice.”

I rate it highly and recommend that all financial counselling agencies have a copy.

Phone and Internet Tool Kit

Review by Wayne Warburton

This kit is published by the Australian Communications Authority (ACA). It has been presented to the public in 3 stages. In the first, released in 2002, the ACA provided a guide to choosing a mobile phone service. The second and third stages have now also been launched—a module detailing the relative merits of different internet services and another module providing similar information about fixed line phone services. These three modules make up the full kit as it now stands.

The ACA claims that the kit is a ‘simple to read, impartial, and straightforward guide to [phone and internet] services, produced to help you understand your telecommunications requirements, and to select the right product for your needs.’ I agree with their summary—I found the kit to be informative, easy to use and best of all, entertaining. I used the online version which has plenty of nifty graphics and audio effects, but hasn’t swapped gimmicks for substance.

The toolkit doesn’t recommend any specific brands or services by name. It is a tool for assessing what you need and what you don’t need, and for providing guidelines to assist you in choosing the best and most cost-effective service.

Readers first fill out a series of questionnaires. When this information is submitted, the program automatically puts together a package of information tailored to your specific needs. This parcel includes a list of questions to ask potential providers, links to relevant information, answers to questions frequently asked by people with needs similar to yours, and a search engine. The kit also explains technical issues in simple language, and looks at the pros and cons of different call costing structures.

In addition, the Tool Kit offers information for users with disabilities, and provides extensive information on what rights and safeguards are available to all users.

I strongly recommend the kit—it has real benefits for financial counsellors, and will probably become an increasingly important resource as telecommunications costs become more and more of an issue for our clients. The Tool Kit is free. You can access it at no charge on the web at: http://toolkit.aca.gov.au . Alternatively, you can order a printed copy or a CD ROM version by ringing the ACA on 1800 351 135.

New Relief Package for Ex-Inmates

Annabel Mayo, a very experienced financial counsellor from NSW who now works in the prison system, has brought to our attention a new initiative from the Dept. of Family and Community Services, whereby ex-inmates and inmate’s families can now access a greater range of emergency relief services. Annabel writes:

“This represents an important increase in support for ex-inmates and inmate’s families. In most cases they have little or nothing to rebuild their lives with, so this is progress.

In the first four weeks following release, even when Centrelink income has been organised, the most income an offender will have is three weeks worth of benefits (unless he/she is in the lucky minority that is walking into a job or family support). This is hardly enough to set up home with, and often results in desperate people committing further crime.

I refer a lot of people in custody and their relatives to financial counsellors all over the state, so this might be useful information for financial counsellors to have when these people start to arrive on their doorstep.”

A number of us here at Sharkwatch have been concerned about such issues for some time. If a prisoner leaves gaol with a victim’s compensation debt and no assets or job to return to, or is returning to a family struggling to get by and shrouded with the further debt incurred whilst trying to survive on a low income or welfare, it seems to be a recipe not only for feelings of hopelessness and depression (which make a successful return to society even less likely), but for further criminal activities to seem an attractive alternative. We can only applaud then, any initiatives that can help ex-prisoners or prisoners’ families to escape the cycle of poverty.

Here is a summary of the package.

Emergency Welfare Relief

The Community Restorative Centre (CRC) and Prisoners Aid Association (PAA) have recently commenced the distribution of financial assistance funded through the Emergency Relief Program of the Commonwealth Department of Family and Community Services. The service will target ex-inmates and their families in both the Inner City and on a Statewide basis.

Here is a précis of the details:

Criteria

Ex-inmates up to 2 years post release.
Families throughout the period of incarceration and up to two years post release.

Types of Assistance

Cash — small amounts available for fares, prescriptions etc
Cheques — or contribution to utility bills, clothing, small essential household goods
Food Vouchers
EAPA Vouchers for assistance with energy bills

Referral Process

The following processes have been identified in order to assist clients, whilst attempting to reduce misuse of the service:-

Probation and Parole Officers identify client need for assistance. Workers should sight utility bills etc. where possible.
Probation and Parole Officers make contact with CRC Emergency Relief worker, with client details and their request for assistance. Where possible client should be present.
If it is not possible for a Probation and Parole Officer to contact CRC on the clients behalf the CRC contact number should be provided to the client for self referral.
Where assessments are carried out over the telephone, clients will need to provide a residential address or utility company address etc to which the financial assistance can be forwarded.
Family members can contact CRC directly.

(Where possible clients are encouraged to come into the CRC office for assistance.)

Information Required At Point Of Assessment

Name
Date of Birth
MIN Number
Date of Release
Contact no. and Address
Reason for Assistance

Emergency Relief Workers can be contacted on (02) 9288 8700 Mon – Fri between 11.00am and 4.00pm

GE Capital Finance: Dispute Resolution

Jan Pentland (Chairperson AFCCRA)
Katherine Lane (CCLC NSW)

Background

The GE Capital Finance complaints process was set up when GE bought AVCO Finance, in response to a campaign and issues raised by the consumer movement in relation to AVCO practices. GE established an internal dispute resolution process (IDR) and an alternative dispute resolution process (ADR). Whereas the ADR scheme only covers the old AVCO businesses, the IDR scheme covers all of GE’s finance businesses.

Alternative Dispute Resolution (ADR)

The Advisory Council for the GE Capital Finance Alternative Disputes Resolution Scheme was established with Dick Viney as the independent Chairperson, and with two representatives from GE and two consumer representatives. The current two consumer representatives are Jan Pentland and Katherine Lane.

The ADR Scheme got off to a very slow start. It took a long time to appoint an independent caseworker and an independent referee. These appointments have now been made. The problem now is that there are very few complaints being processed by the ADR Scheme.

There are a number of reasons (it would appear) for this:

The ADR scheme has only really commenced operation this year.
It is not possible for a complaint to go to the ADR Scheme until GE IDR has decided the matter cannot be settled through its processes.
There is a significant lack of public awareness as to the availability of the ADR Scheme.
The ADR scheme only covers GE/AVCO branch loans.

As the GE ADR scheme is a one-business ADR scheme, there are many difficulties to be overcome before the scheme can meet the Department of Industry, Science and Tourism (DIST) ADR benchmarks. Due to the nature of the ADR scheme, some of the benchmarks will be very difficult to achieve.

Our main objectives as consumer representatives are:

To promote awareness of the ADR Scheme.
Encourage consumers to use the GE ADR Scheme.
Lobby for the expansion of the GE ADR Scheme to cover all GE finance businesses.
Continue to work towards meeting DIST benchmarks.

GE has recently agreed to look at a proposal to expand the scheme. We will be following this up.

Internal Dispute Resolution (IDR)

GE has just introduced a centralised complaint handling procedure. This will mean that all complaints are tracked from the moment the complaint is made and escalated accordingly, if the complaint is not adequately dealt with. This would appear to be a positive step in developing appropriate IDR processes.

GE have agreed to give the following contact points for making complaints:

GE Dispute Resolution Department
Phone: 1300 550 006 or 03 9921 6126 AGC Dispute Resolution Department
Phone: 1300 135 315 GE Branch Disputes
Phone: 13 28 26 GE Auto
Phone: 1300 137 759 Collections (Coles Myer Card, Buyers Edge OneLink, Shell MasterCard)
Phone: 1800 227 253 AVCO Collections
Phone: 1800 227 253 AGC Collections
Phone: 1300 132 103

If you want to make a complaint to GE on behalf of a client it can be directed in the first instance to the dispute resolution department at head office in GE at:

Dispute Resolution Department
Compliance & Audit
GE Capital Finance Australia
572 Swan Street
Richmond VIC 3121
Phone: 1300 550 006; 03 9921 6126 Fax: 03 9921 6671

If you are just referring a client (as opposed to advocating for them), refer the consumer to the relevant contact point for each business (listed above). If the consumer has had past difficulty in getting the complaint resolved with the frontline of the relevant GE business, the consumer should be encouraged to raise the complaint with the Dispute Resolution Department. GE has told us that the complaint will be automatically bounced back to an appropriate person in the business, but that the complaint will be tracked. More importantly, the complaint will usually be bounced back to a more senior person in the relevant business.

We are very keen to receive feedback about GE’s IDR and ADR processes. If you have feedback please contact either Jan Pentland on 0407 042 483 or at janpentland@hotmail.com OR Katherine Lane on 02 9212 4630 or at katherine_lane@fcl.fl.asn.au.

Reactivating Old Debts: A Clarification

Ian Macdonald, the solicitor for the Financial Counsellors Resource Project in Western Australia, has pointed out that some statements in a recent article on Sold Debts (Sharkwatch, May, 2003) were incorrect as written and may be misleading. We agree, and wish to apologise to our readers and clarify these issues now.

The second paragraph appears to suggest that statute barred debts can be reactivated merely by the debtor giving a verbal statement that they owed the debt. This is not true. What we should have made clear is that such statements are used by the purchasers of old debts to gain an acknowledgement that the debt was incurred by the debtor in the first place, and are then followed up by a letter in which the creditor tells the debtor that the debt has been acknowledged, and asking for a payment. In all states of Australia, to be of any legal effect in reactivating an old debt, an acknowledgement must be in writing, signed by the debtor or the debtor’s agent, and addressed to the creditor or creditor’s agent. Any part payment of a debt, however small the amount, has a similar reactivating effect. The time limit starts running again from the date of the written acknowledgement or part payment. In New South Wales, unlike other states, when a debt passes the 6 year time limit from the most recent part payment or acknowledgement (12 for judgement debts), it is extinguished and cannot be revived.

As a practical guide to counsellors dealing with clients who have such debts, we suggest the following:

Check all old debts to see where they are in terms of the six year time limit.
With debts that are approaching the time limit, the best option may be to do nothing. If the creditor or its representative have not done anything for some time, the debtor may choose the Churchillian policy of ‘masterly inactivity’, and see if the creditor’s claim goes out of time.
A debtor may wish to contact a creditor for a particular reason. This may be in an attempt to avert the issue of a summons, or to establish clearly the extent of the debtor’s liabilities, or for the purpose of putting forward a proposal to various creditors. The debtor can have the benefit of making the inquiry without re-activating a time limit by heading the letter “Without Prejudice”, and using words like “The client denies any liability whatsoever in this matter, however, in an attempt to resolve the matter without recourse to litigation, the client is willing to make the following offer of payment ”. Of course, if the debtor goes on to make a payment, the time limit starts to run again from the date of the payment.
If a matter is already out of time, the debtor has two principal options. One is to ignore the matter, and defend it if the creditor chooses to issue a summons. It is desirable for the debtor to get specific legal advice on this. The matter is dealt with differently in different states. As mentioned earlier, in NSW the Limitations Act (s63) provides that a debt is extinguished when the time limit has passed. In South Australia, s38a of the Limitations of Actions Act provides that the limitation is a substantive law (as opposed to procedural). The creditor can only go ahead if the court considers the matter and decides there are special circumstances. In Western Australia, a time limit is only a procedural bar. The matter will go ahead irrespective of its age unless the defendant files a Notice of Special Defence, citing the fact that the claim is statute barred. Paragraph 3.7.2 of the paper ‘Selling Their Customers Out’, published by CCLS (Vic) refers to the extra complication involved if the matter is the subject of an interstate summons.
Instead of waiting to see if the summons is issued, a debtor may choose to take the initiative. In doing so, great care must be taken to avoid the use of words that can be construed as an acknowledgement of the debt. Examples of useful wording are: “Our client denies any liability whatsoever. We draw your attention to section 14 of the Limitation Act, 1969 ..” [or other equivalent]. Creditors are less likely to issue a summons if they see a debtor has a time limit defence, and plans to defend the matter on that basis.

Sharkwatch would like to thank Ian Macdonald for commenting on an early draft of this clarification, and for providing the substantive content used in these guidelines.

Round Up

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

General

The September 30 edition of FCRP News provided a timely reminder about the availability of the FIDO newsletter and the FIDO website. FIDO stands for Financial Information Delivered Online and is an activity of the Australian Securities and Investments Commission (ASIC), who have taken a far greater role in overseeing consumer credit in recent years. The FIDO site provides news, information, handy hints and safety checks related to banking, superannuation, investments and financial advice, and also keeps readers up to date with current scams and the like.

Their monthly newsletter, FIDO News, is available free, and is a worthwhile and valuable resource for all financial counsellors. For more information about subscribing, or to access a wealth of information relevant to financial counsellors, check out the FIDO website at: www.fido.asic.gov.au.

Western Australia

It was terrific to read a copy of the speech The Hon. John Kobelke (Minister for Consumer and Employment Protection, and Minister for Indigenous Affairs in WA) gave in the WA Parliament on September the 16th, after having opened the Financial Counsellors of WA Annual Conference. The speech is a real recognition of the work that financial counsellors do, and of the social problems that we address on a daily basis. Here is a transcript of the speech:

“Mr Speaker, yesterday morning I had the pleasure of opening the annual State Conference of the Financial Counsellors Association of Western Australia, which will run until the 19th of September. The Financial Counsellors Association was established in 1985 and is the professional organisation for finance counsellors and the peak body for financial counselling in W A.

Membership of the Association is only open to those financial counsellors or financial counselling agencies that provide free services and do not receive lending industry funds. The Association has approximately 90 active counsellor members, with many more unpaid volunteers who provide financial counselling under the supervision of existing funded services, or, with the assistance of financial counsellors in the network. Most of these counsellors, including those from rural and regional Western Australia, have been able to attend this week's conference, which is an indication of its importance and value to the work that they do.

Financial counsellors are non-legal caseworkers who support, inform and empower individuals and families in financial crisis to improve their domestic financial position. The target group of the Financial Counsellors Association is low-income vulnerable consumers; including indigenous Australians, people from linguistically or culturally diverse backgrounds, young people, people with disabilities, people in rural, remote and regional areas and seniors.

Family support is vital to a healthy, well functioning society and the theme of this year's conference "Supporting Families" is very much in line with the Gallop Government's approach and commitment to a fairer deal for all Western Australians. Our commitment is reflected in an extensive consumer education program run by the Department of Consumer and Employment Protection, which has made regional Western Australia as a priority focus.

In order to support the network of financial counsellors and consumer advocates, Community Education Officers in the Department of Consumer and Employment Protection have provided face-to-face information, education and support in the Mid West, Gascoyne, Murchison and South West regions. The education program also values partnerships with, and provides support for, community organisations and government agencies.

During 2002/2003, the department has developed and fostered partnerships with, financial counsellors, tenancy advocates, the Equal Opportunity Commission, the Legal Aid Commission of WA, the Aboriginal Legal Service of Western Australia and Lesbian and Gay Pride W A.

In addition, fines of $496,000 recently paid by the ANZ Bank, for breaches of credit laws, will soon be distributed via grants to the non-Government sector. These grants will be for the purpose of delivering important financial counselling services to consumers - to give them legal advice and other valuable information about consumer credit.

I would therefore like to publicly acknowledge the tremendous work of financial counsellors and the contribution made by members of the Financial Counsellors Association of Western Australia as well as those Government agencies that provide support for their important work.

My colleague, the Minister for Community Development Sheila McHale, will also be addressing the conference later in the week and I know she joins with me in thanking financial counsellors for their contribution to our community and in wishing them well for their conference this week.”

New South Wales

Computers Available Free to Non-Profit Organisations and the Disadvantaged.

The government has started a 12 month trial of donating redundant computers to not-for-profit organizations and disadvantaged people. The program is called the ReConnect.nsw Computer Program.

The government estimates that 29,000 government computers will become redundant over the next three years and sees the re-use of them as good social investment and environmentally sound.

The essential details are contained in the Premier's Memorandum 2003-09.

Computers supplied by the program are in good working order, and have the following minimum requirements:

Working Central Processing Unit with a minimum speed of 233 MHz
Minimum 32 MB of RAM
Minimum 2 Gigabyte Hard Drive (recently cleaned)
Working Monitor (minimum 800*600 resolution)
Working Keyboard and Mouse
Working Floppy Disc Drive
Working CD ROM Drive
All relevant cables and plugs

Here are the contact details if you want a computer:

Charity Computers
Servicing the regions around Yass & Goulburn
Contact: Mark Dunnett (Project Manager)
Ph. 6259 8539 Email: charitycomputer@oalink.com.au Newtrain Incorporated
Servicing Tamworth, Gunnedah, Narrabri, Moree, Inverell and Glen Innes
Contact: Bob Forrester (CEO)
Ph. 6761 2780 Email: Robert@newtrain.com.au Technical Aid to the Disabled
Servicing specific individuals/groups with disabilities in metropolitan and regional NSW
Contact: Alan McGregor (Manager)
Ph. 9808 2022 Eml: amcgregor@technicalaidnsw.org.au Wesley Uniting Employment
Servicing Metropolitan NSW
Contact: Barry Lance (Manager)
Ph 9755 0011 Email: Barry.lance@wesleymission.org.au WorkVenture Ltd
Servicing Metropolitan and Regional NSW
Contact: Steve Lawrence (Manager)
Ph. 9282 6995 Steve.Lawrence@workventures.com.au NSW CTC Program (distribution only)
Servicing regional areas of Central Coast, Central West, Hunter, Illawarra, Shoalhaven, Southern Highlands, Southern Tablelands, Mid North Coast, North West.New England, Northern Rivers, Orana, Riverina/Far West, and South East NSW
Contact: Susan Locke (Manager)
Ph. 9236 7743 Email: Susan.locke@ditm.nsw.gov.au

Note - all phone numbers have the 02 prefix

Because this program is on a 12 month trial, I suspect that its success will be judged partially on the demand for the computers. So, Sharkwatch recommends—don’t be shy! If you or a disadvantaged client need a computer, don’t hesitate to contact the program.

In the Media

Links between financial pressures and suicide

“Money troubles are second to relationship woes as the main reasons for attempted suicides in Australia. An ongoing World Health Organisation study, which has so far included data on 15,000 Australians, shows financial pressures as a new factor in suicidal behaviour, Australian Institute for Suicidal Research and Prevention director Diego De Leo said. Professor De Leo said while relationship pressures and break-ups were still the most common cause of suicide attempts, financial troubles were second on the list.”

Sydney Daily Telegraph, 4th July, 2003

Fraudulent mortgage brokers face blacklisting

Original article by Kirsty Needham

The mortgage industry will establish a blacklist as a part of a crackdown on brokers who act unethically in the booming property market. The Mortgage Industry Association (MIA) said it had set up a disciplinary tribunal, chaired by Hank Spier, a former chief executive of the Australian Competition and Consumer Commission (ACCC), to rule on complaints against its members and to protect consumers.

For the first time, brokers will be expelled or suspended if an investigation finds fraud or other transgressions. Until now, even though an industry ombudsman could award up to $100,000 in compensation to consumers who had been cheated, the association could not stop mortgage brokers from continuing to trade as members because of the fear of legal action.

Mortgage brokers account for a third of home loans, and a report by the Australian Securities and Investments Commission (ASIC) this year found that consumers were falling prey to excessive fees and unscrupulous practices as brokers operated in a regulatory vacuum. People were deceived into signing documents requiring fees thousands of dollars above those agreed to, and were being chased for fees even if brokers failed to deliver a service, according to the report.

The association’s chief executive, Phil Naylor, said the tribunal would provide consumer protection in the absence of government regulation, which is also being supported by the industry group.

Karen Cox, head of the NSW Consumer Credit Legal Centre (CCLC), which wrote the ASIC report, welcomed the introduction of tribunal, but said it would not curb brokers operating outside the association’s scheme. “We still need legislation because at the end of the day a blacklist is only a blacklist,” said Ms Cox, who is calling for a cap on broker’s fees.

Mr Naylor said that the tribunal is already examining five complaints, and that it would name expelled members on a website.

Sydney Morning Herald, August 27, 2003

Debt binge spells trouble for more home borrowers

Original article by Matt Wade

Australia’s debt binge has worsened, with more home borrowers admitting they would have trouble meeting mortgage repayments in the event of a modest lift in interest rates. One in four home borrowers would struggle to make repayments if interest rates edge up just 1 percentage point, according to a Hawker-Britton UMR poll of 1000 people taken between September 23-28 this year (up from 15% in June, 2002). A 2% interest rate hike would see 44% of home loan borrowers in trouble (up from 32% in June, 2002), and a 3% rate hike would see almost 75% of borrowers unable to meet their commitments (up from 48% in June, 2002).

To add a further nasty twist to this rather frightening news, economists have already noted that rate rises have become more likely after the Bureau of Statistics revealed that all categories of debt had risen strongly in August. Personal lending rose 5.5% to a record $6.86 billion in August, and revolving credit—mostly credit cards—jumped to $77.2 billion, or $4,000.00 for every Australian! New personal finance commitments have risen by 20% in the last 4 months—the strongest pace of debt creation in a decade. Some economists believe that interest rates will be 1% higher by the end of next year, and financial markets are factoring in a series of hikes totalling .75 of a percentage point by June 2004.

Sydney Morning Herald, October 14th, 2003

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