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Notes and Notices

Vale Margaret Fisher

Margaret Fisher, who used to be a financial counsellor at the Bankstown Creating Links Co-operative, died on Sunday, 11th December, 2005. Margaret worked as a financial counsellor for about 10 years, but then moved into the position of Co-ordinator of Families First and Family Services at the Bankstown Creating Links Co-operative. Margaret was known for her kindness and was well regarded within financial counselling. Margaret will be missed and those of us at Sharkwatch offer our condolences to Margaret's family.

Baycorp Advantage 1300 number Update

Since reporting in the last Sharkwatch that Baycorp had a new 1300 number that consumers could call to obtain a free copy of their Credit History Report, we have received a number of phone calls and several letters from financial counsellors who have tried to use the service. Here is one example:

Dear Sharkwatch,

My name is Kaily Goodsell and I am a financial counsellor with St David's UnitingCare in Albury. I received the copy of Sharkwatch early this week and was very interested to see that Baycorp have introduced a free number for consumers to order a copy of their credit history file. I phoned this number to test it for my clients and found that nothing has changed. You still have to make the request in writing or pay $27 up front.

Are you aware of this?

Regards

Kaily Goodsell
Financial Counsellor

Sharkwatch obtained the information we published in the last issue from a press release that was sent out by Erica Hughes, the General Manager of Business Information Services at Baycorp Advantage. For those who may want to ask questions or comment about Baycorp's new service, Erica's contact phone number is (02) 9951 7521, and her fax number is (02) 9951 7829.

Since receiving this correspondence, Sharkwatch has phoned the 1300 number to test the service. Baycorp now make it very clear that although you can obtain a quick copy of your Credit History Report for $27, it is still possible to get a free one. Unfortunately, you still have to write to them or fax the details and the copy is posted within 10 working days. In reality, nothing has changed for consumers and financial counsellors ordering free copies of credit files, except that the 1300 allows us to obtain the postal or fax details for the cost of a local call.

The website has details on the lower half of the page showing how your clients can obtain a free copy of their credit file.

Proposed Debt Agreement Reforms

Following a review of the debt agreement system by the Insolvency and Trustee Service Australia (ITSA) and the Attorney-General's Department. the Australian Government are proposing a number of amendments to Part IX of the Bankruptcy Act 1996. A copy of the review report and further details of the proposed reforms can be found on ITSA's website at: www.itsa.gov.au. A press release giving a brief synopsis was released by the Attorney General's Department on March 29, and is available from the 'Media Centre' section of their website at: http://www.ag.gov.au/. Comments on the proposals can be made to ITSA by the 12 of May 2006.

Centrelink Bonus

Sharkwatch recently received a copy of the following reply to a query about the Centrelink bonus and bankruptcy. The original enquiry asked for clarification from the Insolvency Trustee Service of Australia (ITSA) about how the bonus would be viewed in terms of the bankrupt's estate, and asked for a post-bankruptcy receipt versus pre-bankruptcy receipt comparison.

The following reply from Amanda Pearce from the ITSA Secretariat offers some clarity:

The Centrelink Bonus and Bankruptcy

The Pension Bonus is not income for the purposes of the Social Security Act (because it is 'a payment under (that) Act'- s8(8)(a)). However, the effect of reg. 6.12C(1)(b) of the Bankruptcy Regulations is to deem payments mentioned in s8(8)(a) as income of a bankrupt. So, the Pension Bonus would be regarded as income for the purposes of the Bankruptcy Act. The effect of this (pre and post bankrutpcy) is:

1. Where the payment is received pre bankruptcy:

Income acquired before bankruptcy falls within the definition of 'property of the bankrupt' in s58(1)(a) of the Bankruptcy Act. This means that any Pension Bonus remaining as at the date of bankruptcy vests in the trustee.

2. Where the payment is received post bankruptcy:

There is a continuing assumption that after-acquired income does not vest in the bankruptcy trustee. However, because the payment would be regarded as 'income' for the purposes of the Bankruptcy Act, it would be taken into account in determining the bankrupt's liability to make income contributions — see Division 4B of Part VI of the Bankruptcy Act.

regards

Amanda Pearce
Senior Legal Officer
ITSA Secretariat

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FCS OnLine

Richard Brading
Wesley Community Legal Service

FCS OnLine — A New Player in Credit Applications

FCS OnLine is a new business that provides information to credit providers, collection agents and government authorities. It has ~13 million Australians on its database with information that may include name changes, address, telephone number, residential property ownership and sales data and more. Its telephone directory and consumer name and address database is probably the most accurate commercial database in Australia with 11 million phone listings and Australia Post Change of Address data. FCS OnLine complies with the Privacy Act and National Privacy Principles.

FCS OnLine Identi-Check™ is a product used to reduce the time and cost associated with processing and approving credit applications, whilst increasing the accuracy of the information captured and processed. Essentially it enables the credit provider to compare the basic personal information supplied by an applicant for credit with information on its database. If there are discrepancies, the credit provider should discuss these with the applicant for finance.

FCS OnLine is different from Baycorp Advantage and Dun and Bradstreet in that they do not hold a database of credit applications, defaults etc. All of their information is publicly available. It is not possible to add your own information to their database and concerns about information supplied to a credit provider should be raised with that credit provider first.

SkipFlash™ is another FCS OnLine product. SkipFlash monitors new public data for change of details for debtors who cannot be located and is a tool used by "skip tracers" (people who locate debtors who "skip" without paying their debts).

FCS OnLine's address is:

FCS OnLine
1/90 Mount St,
North Sydney, NSW, 2060.
Telephone: (02) 8912-1030
Facsimile: (02) 8912-1001
Email: info@fcsonline.com.au
Web address: www.fcsonline.com.au.

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Proof of Identity

Richard Brading
Wesley Community Legal Service

Before you hand over your passport to the Trustee ...

Recent changes to the administration of bankruptcy mean that it is now more likely that clients will be required to surrender their passport to their trustee as required by s.77(1)(a)(ii) Bankruptcy Act. For clients who do not have an Australian driver's licence, their passport may be their only primary proof of age. Without their passport they may have difficulty in dealing with government, finance industry and other businesses.

The solution may be for these bankrupts to apply for a Proof of Age card before they hand over their passport to their trustee. All States and Territories have a form of Proof of Age card (called Photo Card in NSW, Card 18+ in QLD). Generally these are available from the same government agency that deals with transport licensing. To get a Proof of Age card, the person usually needs a current passport plus some secondary identification. A fee ranging from $10 (Vic) to $40 (NSW) may be payable.

Once the passport has been handed over to the trustee, it may be very difficult for the person to get it back to obtain a Proof of Age card.

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Compo Garnishees

Elizabeth Terry (a financial counsellor from NSW) wrote to Sharkwatch with this information about garnishee orders.

Elizabeth wanted to know whether or not a garnishee order could be made against a workers compensation payment.

Elizabeth contacted the Downing Centre (a court complex in Central Sydney) and was told that workers compensation payments are not protected from garnishee orders. This means that a garnishee order can be placed against a workers compensation payment.

The NSW Consumer Credit Legal Centre will be putting out information about garnishee orders in their next CCLC flyer. Visit CCLC at http://www.cclcnsw.org.au.

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Letters

Sharkwatch was one of the recipients of the following communication from Fiona Guthrie. This particularly grabbed our interest because we (Jennifer, Richard and Wayne) are receiving an increasing amount of enquiries involving cases with foreign debt or debt in foreign currencies. We would be most interested to hear of any similar cases (just email us at the address on page 2), and would assume that Fiona Guthrie and Alison Pidgeon would also like to receive copies of any relevant cases. Here is Fiona's letter:

This post is to alert you to what appears to be an insidious new practice in the debt collection industry.

Alison Pidgeon from the Consumer Credit Legal Service of WA says that they have had a client being chased for a debt in Australia by a debt collection company in the USA (the original lender was a credit union who on-sold the debt to Citibank who use the USA firm).

The letter demanding payment is in US dollars. CCLSWA's client subsequently received further letters and phone calls from the US. The client identifying numbers on the letter did not relate to the original account.

Alison says there are two issues and has written to ASIC about them.

Issue 1 — calculating debt in US Dollars — this is confusing and potentially inaccurate

Issue 2 — difficulties for the debtor in communicating with the debt collection company

ASIC say that they are not able to do much at present but would be keen to see more cases. Is this practice of USA debt collection becoming common or is it still highly unusual?

Fiona Guthrie
Phone: 61 7 3369 7247
Fax: 61 7 3369 2410
Mobile: 0402 426 835
Email: fionaguthrie@creativesparks.com.au
Web: www.creativesparks.com.au

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Telstra Update

There is mixed news on the Telstra front. Some services have risen significantly in price, but there has also been an upgrading of the capabilities of the InContact service and progress with the new hardship assistance program.

Price rises for connection services

Financial counsellors will be disappointed that Telstra has instituted some fairly hefty price rises for some types of connection services. These took effect from April 1, 2006, and are as follows:

• Standard new service connection: Fee rises from $209 to $299 (a 43% increase)
• Standard additional services at same time and premises: Fee rises from $159.50 to $179 ( a 12% increase)
• Pensioner new service connection, Fee rises from $135.30 to $194 (a 43% increase).

For non-business consumers, the connection types affected are New Telephone Line Connections and Telephone Line Connections where cabling work is required (including re-connection of a previous service that requires cabling to be undertaken at any place between the Property Entry Point and the 1st socket).

This impacts approximately 25% of fixed line service connections per annum. Most service connections are "in-place" connections, where there is no change to the current fee ($59 where no visit by a technician is required and no cabling work is required).

These price rises seem to particularly affect pensioners and other low income consumers. The available options for those who are on low incomes and who are affected by these changes include (where eligible): Telstra's Pensioner Discount and/or the Bill Assistance Program and/or BudgetPay and/or negotiation to pay off the connection charges via instalments.

InContact upgrade

Robert Morsillo, the Telstra Group Manager for Consumer Affairs, sent the following memo detailing Telstra's upgrade of the InContact service.

" Some of you are aware of Telstra's InContact telephone service but a recent survey among Financial Counsellors indicates some confusion about calls that can be made from this service.

InContact is a home telephone service free of monthly rental charges. It is available to customers who have a Centrelink concession card. It is also available for up to 12 months to customers who have a debt to Telstra. It is available where it is the only phone service in the household, other than a pre-paid mobile phone service.

InContact provides incoming calls and outgoing calls to the emergency 000 number and to Telstra customer service. It can also be used to call Telstra Homelink 1800 numbers, reverse charge calls, and all of the free-to-call numbers in the Health & Help, 24 hour services, section at the front of the White Pages directory.

Importantly, when combined with a Telstra PhoneAway card (available at many retail outlets) InContact can be used to make most outgoing calls on a pre-paid basis.

In particular, from 22nd February 2006 Telstra upgraded the PhoneAway pre-paid card service to enable calls to 18 and 13 numbers. So, calls to Lifeline or Centrelink or many other services are now possible from an InContact service using a PhoneAway card. This was previously not possible.

In a recent survey by AFCCRA of financial counsellors InContact was nominated as one of the most useful options in getting people connected again. Now, with the recent improvement to the PhoneAway card, it is even more useful as a fallback for people in financial difficulty.

To check out what is available for low-income consumers under Telstra's Access for Everyone program, visit http://www.telstra.com.au/accessforeveryone/index.htm".

Financial counsellors and consumer groups have been lobbying for these changes for some time and it is good to see them come to fruition.

Hardship Policy

Telstra has recently produced its 'Financial Hardship Policy' (i.e., its credit management policy for those experiencing financial hardship), which is expected to be released soon. Telstra has also been making progress towards implementation of its new hardship assistance program. Specialist customer contact staff have been recruited and trained, with a significant amount of that training coming from a financial counselling agency. Telstra are currently working towards putting appropriate referral strategies in place across all staff. For more information, contact Jenni Barbour (03 9634 8711) or Robert Morsillo (03 9634 5508).

The Old Lady and the Bank

We have reprinted a letter that is currently circulating via email. It is claimed that it was written by a 96 year old woman, and it certainly tickled our fancy here at Sharkwatch ...

Dear Sir:

I am writing to thank you for bouncing my cheque with which I endeavored to pay my plumber last month. By my calculations, three nanoseconds must have elapsed between his presenting the cheque and the arrival in my account of the funds needed to honour it. I refer, of course, to the automatic monthly deposit of my entire salary, an arrangement which, I admit, has been in place for only eight years. You are to be commended for seizing that brief window of opportunity, and also for debiting my account $30 by way of a penalty for the inconvenience caused to your bank.

My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways. I noticed that whereas I personally attend to your telephone calls and letters, when I try to contact you, I am confronted by the impersonal, overcharging, pre-recorded, faceless entity which your bank has become. From now on, I, like you, choose only to deal with a flesh-and-blood person.

My mortgage and loan repayments will therefore and hereafter no longer be automatic, but will arrive at your bank, by cheque, addressed personally and confidentially to an employee at your bank whom you must nominate. Be aware that it is an offence under the Postal Act for any other person to open such an envelope. Please find attached an Application Contact Status which I require your chosen employee to complete. I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative. Please note that all copies of his or her medical history must be countersigned by a Justice of the Peace, and the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof.

In due course, I will issue your employee with a PIN number which he/she must quote in dealings with me. I regret that it cannot be shorter than 28 digits but, again, I have modeled it on the number of button presses required of me to access my account balance on your telephone banking service. As they say, imitation is the sincerest form of flattery. Let me level the playing field even further. When you call me, press the buttons as follows:

1. To make an appointment to see me
2. To query a missing payment.
3. To transfer the call to my living room in case I am there.
4. To transfer the call to my bedroom in case I am sleeping.
5. To transfer the call to my toilet in case I am attending to nature.
6. To transfer the call to my mobile phone if I am not at home
7. To leave a message on my computer, a password to access my computer is required. Password will be communicated to you at a later date to the Authorized Contact.
8. To return to the main menu and to listen to options 1 through 7.
9. To make a general complaint or inquiry. The contact will then be put on hold, pending the attention of my automated answering service. While this may, on occasion, involve a lengthy wait, uplifting music will play for the duration of the call.

Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement.

May I wish you a happy, if ever so slightly less prosperous New Year?

Your Humble Client

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The Law Matters

Richard Brading
Principal Solicitor Wesley Community Legal Service

The New Debt Collection Guideline: A Brief Summary

In October 2005, ASIC & the ACCC released their updated Debt Collection Guideline for Collectors and Creditors. The full document is available from www.asic.gov.au under Publications, as well as a consumer brochure "Dealing with debt: your rights and responsibilities". The Guideline is an excellent document and every financial counsellor should have one on their desk. This article highlights a selection of points from the Guideline that are relevant to financial counsellors.

When launching the Guideline, Professor Berna Collier, ASIC Commissioner, provided 3 examples of complaints received by ASIC about debt collectors:

Example 1

"We received a complaint that a financial institution was using inappropriate tactics to obtain repayment of debts from its clients, for example telling a consumer that she was a criminal, a liar, and a sheriff would come around to her house and take her belongings. She was also denied access to her bank account until she agreed to pay an outstanding payment."

Example 2

"Another complaint concerned the conduct of a collection company that continued contact in relation to a debt that was approximately 30–40 years old, even after being advised of the consumer's age and poor health. The collection company advised the consumer that the matter would progress to legal proceedings."

Example 3

"Another complaint that a credit provider was refusing to provide information to the complainant to enable him to finalise his account. Furthermore, the company who had bought the debt was harassing him but would not provide any further information."

Statute-barred debts

The practice of collecting statute-barred debts was considered by the Victorian Supreme Court case of Collection House Ltd v Taylor [2004] VSC 49. In that case, a consumer who was "in a position of special disadvantage" had an old AGC debt which was statute-barred. The debt had been bought by Collection House. One evening a debt collector phoned the consumer and pretended to be working for a firm of lawyers and demanded payment of the debt. The collector talked the consumer into making a payment in reduction of the debt, thereby reviving the debt by operation of s24(3) of the Limitation of Actions Act 1958 (Vic).

The next day, the consumer sought advice from a community agency and was told that the debt was statute-barred. She rang the collector to complain, but he pretended that the Statute of Limitations did not prevent him from collecting the debt.

Judge Nettle held that the conduct of the debt collector was unconscionable in "cold-calling a woman of the respondent's socio-economic standing at home at 6.30 in the evening, and interrogating her as to her personal and financial circumstances while insinuating that in the absence of her agreement to pay, legal proceedings may be instituted, is capable of constituting pressure of a very high order. The fact that she bore the burden of a deaf dependent child can only have exacerbated her predicament." The judge said "In my view the fact that any impoverished debtor is willing to pay $5,000 in settlement of a 10 year old statute barred finance company debt of $11,000 is probably sufficient without more to raise in the mind of a reasonable person the possibility that the debtor does not know of the limitation period and might not have agreed to pay it if they had known."

In January 2005, ASIC undertook a survey of debt collectors to see how they had adjusted their practices and was disappointed to report that:

• " the decision of Collection House Ltd v Taylor appears to have limited impact on the practices of the debt collection industry;
• there is widespread failure by industry to adopt processes to identify whether debts are statute-barred;
• there is a widespread misunderstanding of laws relating to limitation regimes; and
• those agencies that collect statute-barred debts are not doing enough to ensure that their conduct meets the standards set by law."

A copy of the report "Collecting statute-barred debts — an ASIC report" is also available from the ASIC website (www.asic.gov.au).

Debt Collection Guideline

The 58 page Guideline document replaces the 1999 ACCC publication "Debt collection and the Trade Practices Act". It explains the views of ASIC and the ACCC on debt collection and gives guidance on best practice for debt collectors. Although it does not have legal force, we can be sure that any court would take a great deal of notice of it when considering debt collector conduct.

Threat of action

The Guideline points out that a collector must not threaten action (legal or otherwise) that they are not legally permitted to take. Such a threat could amount to unconscionable conduct or harassment. In particular, a collector must not claim a right to seize goods beyond that granted by law.

Contacting debtors

Detailed guidance is provided as to how, why, who and when debt collectors are allowed to contact debtors or others. There a many proper reasons why a debt collector may need to contact a debtor. However it is not reasonable or acceptable to contact a debtor to:

• frighten or intimidate the debtor
• demoralise, tire out or exhaust the debtor
• embarrass the debtor in front of other people.

A debtor is entitled to respect and courtesy, and must not be subject to misleading, humiliating or intimidating conduct. Collectors should not:

• use abusive, offensive, obscene or discriminatory language;
• make disrespectful or demeaning remarks about a debtor's character, situation in life, physical appearance, intelligence or other characteristics or circumstances;
• embarrass or shame a debtor — for example, by sending open correspondence to a shared post-box, making the debtor's employer or co-workers aware that the debtor is being pursued for a debt, or creating an impression that the debtor is under surveillance;
• adopt an aggressive, threatening or intimidating manner — for example, by shouting at or continually interrupting the debtor, or by refusing to listen to what the debtor has to say;
• threaten to use, or use, violence or physical force against a debtor, third party or against property;
• mislead a debtor about the nature or extent of a debt, or the consequences of non-payment.

Information that should be provided

When calling, the collector should provide:

• the name of the creditor and any assignee
• details of the account and the amount claimed
• other information reasonably requested by the debtor.

Collectors should not ignore a debtor's request for information and/or documentation about the account. In certain circumstances, failure to provide information may constitute unconscionable conduct.

Impact of the Privacy Act

One big difference in the new Guideline is the incorporation of the Federal Privacy Act and National Privacy Principles into collection guidelines. Until now, collectors have given little regard to privacy laws. The new Guideline makes it clear that debtors have the same right to privacy as anyone else. So a collector who tells a third party (relative, neighbour, employer etc) about the debtor's indebtedness will be breaching the Privacy Act.

When can a debtor call?

Reasonable contact times are:

Contact by telephone

• Monday to Friday: 7.30 am—9.00 pm
• Weekends: 9.00 am—9.00 pm
• National Public Holidays: no contact recommended

Face-to-face contact

• Monday to Friday: 9.00 am—9.00 pm
• Weekends: 9.00 am—9.00 pm
• National Public Holidays: no contact recommended

All workplace contact

• Debtor's normal working hours (if known), or 9.00 am—5.00pm on weekdays

However, a debtor can ask that contact be made at other or more restricted times (for example if the debtor is a shift worker, has responsibility for children, or does not want to be contacted when other family members are present).

If the collector cannot contact the debtor at the requested contact times, the collector can ring at other times.

How often can a collector call?

A collector should call or send a letter no more than 3 times a week or 10 times a month at most (when contact is actually made). Face-to-face contacts should not be made more than once a fortnight.

Home visits

The Guideline recommends that collectors not make home visits uninvited when it is possible to ask permission to visit the debtor. If the debtor refuses permission, the collector should not visit. Collectors should leave the premises immediately if asked to leave and not stay in the vicinity of the debtor's home for an extended period of time.

Workplace visits

These should only be undertaken as a last resort unless the debtor is the owner of a business to which the debt relates or the debtor has agreed to the visit. The collector should take care not to reveal the purpose of the visit to co-workers.

Contact with third parties

The Guideline recommends that collectors do not contact third parties (e.g. family, neighbours) to obtain location information more often than once every 6 months.

Collectors should not try to get family members or other third parties to agree to pay the debt by suggesting that the third party is liable for the debt when that person has no obligation to pay. Neither should third parties be asked to help persuade a debtor to pay the debt.

Third parties are not obliged to give any information to collectors, nor do they need to agree to leave a message for the debtor to call.

Undue harassment

Although collectors can put some pressure on a debtor, they must not use "undue harassment", which is defined as:

"where the frequency, nature or content of such communications is such that they are calculated to intimidate or demoralise, tire out or exhaust a debtor, rather than merely convey the demand for recovery, the conduct will constitute undue harassment." ACCC v The Maritime Union of Australia [2001]FCA 1549

Financial counsellors

The Guideline recommends that debtors in financial difficulties seek the assistance of a community-based financial counsellor for help in debt negotiation.

The Guideline also states that a collector should not contact the debtor directly if there is an authorised representative such as a financial counsellor representing the debtor.

Exceptions to the rule are:

• if the financial counsellor does not respond to communications within 14 days;
• if the financial counsellor says that they do not have instructions from the debtor about the debt;
• the financial counsellor is no longer representing the debtor;
• the debtor specifically requests direct communication;
• if the financial counsellor does not provide a written authority.

Client Authorities

The Guideline says that "in general, any form of authority consistent with the requirements of the Privacy Act 1988 (Cth) should be regarded as acceptable" (footnote 32).

Repayment Arrangements

It is unacceptable to pressure a debtor:

• to pay in full, in reasonably large instalments, or to increase payments, when the collector is aware they are unable to do so;
• to get further into debt to pay out an existing debt;
• to show proof of unsuccessful alternative credit applications before a repayment plan will be negotiated.

Misrepresentations

Collectors should not lie or misrepresent the truth by falsely stating that:

• legal proceedings have been or are about to be commenced unless true;
• immediate possession will be taken of a debtor's home or other property when the debt is not secured by that property, or the creditor has not obtained judgment for the debt;
• unsecured goods may be seized and sold without further legal action;
• additional fees and charges will be added to the debt unless there is a legal right to claim them;
• failure to pay a debt is a crime;
• they have a legal right to collect a statute-barred debt

Court proceedings

The Guideline recommends that court proceedings be issued in the State or Territory where the debtor lives (section 21(e)).

Contact following bankruptcy

The Guideline reminds collectors that they must stop all formal and informal collection activities against debtors after bankruptcy unless the debt is secured.

What happens if the Guideline is breached?

It is generally best to contact the debt collection business and specify:

• the debtor's name, address and the account number
• the date and time of the conduct complained of
• detail of the conduct
• the section of the Guideline that covers the conduct
• what remedy the debtor would like (e.g. apology or compensation)

If the debt collection business does not provide an adequate response, you can make a formal complaint to:

• the ACCC for debt collection misconduct other than those relating to financial services; Phone 1300 302 502;
• ASIC for debt collection relating to financial services (e.g. credit cards, home loans, car loans); Phone 1300 300 630.
• State & Territory Fair Trading or Consumer Affairs Offices for anything outside the jurisdiction of ACCC and ASIC.
• ITSA for collection activities against bankrupts.
• The Federal Privacy Commission for complaints about Privacy Act breaches.

We recommend that financial counsellors go to the ASIC website (at: www.asic.gov.au) and retrieve the full document from the Publications section. The new Debt Collection Guideline for Collectors and Creditors is a valuable resource that is relevant to many of our clients, and should be a part of every financial counsellors' resources collection.

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Telstra Relief Package for Cyclone Victims

Telstra has announced a relief package for residents and small business customers whose phone services have been affected by the recent cyclone in Northern Queensland. The information below comes from a Telstra press release.

Telstra relief package for customers affected by Cyclone Larry

Under the package, Telstra is offering customers who report a temporary loss of their Telstra fixed phone service due the cyclone:

• free call diversion from their fixed service to a fixed or mobile service of their choice, irrespective of carrier; and
• charging at fixed service rates, in accordance with their selected HomeLine plan, for local and STD® calls made on their Telstra mobile service (limited to one designated Telstra mobile per affected household/business).

These offers will continue until the network damage in the area has been repaired. To access these offers, customers should contact 13 22 03.

Cyclone Assistance hotline — 1300 134 239

Telstra also announced a Cyclone Assistance hotline — 1300 134 239 — for customers whose homes have been destroyed by the cyclone Telstra has established a customer service team dedicated to assisting these customers with the restoration of their fixed phone services.

These customers can access the offers mentioned above, for a maximum period of three months from the date of the disaster. In addition, Telstra is also offering these customers.

• cancellation of their fixed phone service at their existing premises, with free number reservation for up to twelve months;
• free connection of a Telstra fixed service at one residence within twelve months from the date of the disaster; and
• Telstra mobile service customers whose homes have been destroyed by Cyclone Larry but who did not have a fixed phone service can receive a once off credit of fifty dollars, limited to one mobile phone per household.

Telstra BigPond® Broadband customers whose homes have been destroyed by the Cyclone can receive free connection of a BigPond Broadband service within twelve months from the date of the disaster (limited to one service per affected household/business).

At the time of going to press, there has just been severe flooding in Katherine in the Northern Territory. Sharkwatch would anticipate a possible response from Telstra to this disaster also. Financial counsellors in affected areas should monitor the Telstra website (www.telstra.com.au) for further updates.

How to use the BITA calculator to work out likely income contributions.

Step 1. Obtain gross income.

Work out the client's gross income.

Step 2. Calculate net income.

Calculate the Tax Payable and the Medicare Levy using the guidelines in the tables at the bottom of the page, and work out how much child support or maintenance the client is paying if applicable. Subtract those amounts from the gross income.

Step 3. Calculate assessable income.

Add assessable income items that would increase the net income, such as a fringe benefit. This will give you an estimate of the client's assessed income for BITA purposes.

Step 4. Calculate income in excess of AITA threshold.

Looking at the column with amount of dependents, find out the AITA (assessable income threshold amount) and subtract it from the clients assessable income.

Step 5. Calculate likely contribution towards bankruptcy.

ITSA will take 50c in the dollar of any excess above the AITA threshold. Divide the excess income over BITA amount by two. This will give the amount of the contribution towards the bankruptcy the ITSA is likely to ask for.

For further assistance, there are actual examples in Sharkwatch Vol. 5 No. 4 — November 2004.

Download the BITA Calculator in Adobe PDF Format (550K)

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Round Up

NSW

The annual conference of the NSW Financial Counsellors' Association (FCAN) will be held from May 21 to May 24 at the Collaroy Centre (Collaroy Beach, Sydney). The conference theme is 'Meeting the challenges—together'.

The conference program includes sessions on "Not so civil debt recovery", 'Relationship breakdown and family law', 'Dealing with depression', 'Bankruptcy — A practitioners workshop', and 'Handling difficult clients'.

Conference speakers include The Hon. Diane Beamer MP, Minister for Fair Trading, Chris Connolly, Chair of the Financial Counselling Trust Fund in NSW, Richard Brading from Wesley Community Legal Service, Paul Clitheroe, David Foster, Paul Bogacs, Betty Weule, Craig Hamilton, and David Tennant.

For more information, contact:

Mike Young (Conference convenor)
Email: financial@lifelinews.org.au
Phone: (02) 9891 6212
Mobile: 0411 059 488

The venue details are:

The Collaroy Centre
Homestead Avenue
Collaroy Beach, NSW, 2097
Phone: (02) 9982 9800
Facsimile: (02) 9971 1895
Email: collaroy@collaroycentre.org.au

South Australia

Advance notice — SAFCA conference

The annual conference and AGM of the South Australian Financial Counsellors Association will be held on Thursday 21st and Friday 22nd September 2006. The conference agenda and venue are yet be advised. Please mark these dates in your diary.

Trish Burden President, SAFCA P: 08) 8202 5115 F: 08) 8211 8041 M: 0409 386 840

Queensland

FCAQ conference

Gregory Mowle, the outgoing President of the Financial Counsellors' Association of Queensland (FCAQ), reports that the March annual conference was a terrific success. In his note thanking attendees, Gregory commented that:

"The feedback was very positive. The new venue was well received and everyone could nominate a favourite speaker — from the energetic Paul O'Shea to the very relevant Wayne Warburton.

As I mentioned in my Welcome Speech I am about to move to a new role with The Smith Family in Sydney and so will have no involvement with the organising of next year's Conference but I hope to see you there.

All the papers should be available on the CCCL (Queensland Centre for Consumer and Credit Law) website within a few weeks."

There were a number of outstanding presentations at the conference, including Greg Tanzer from the Australian Securities and Investment Commission (ASIC) speaking about the new ASIC debt collection guideline, David Bergmann from the Insolvency Trustee Service of Australia (ITSA) speaking about current bankruptcy reforms (including the debt agreement review), and Simone Watson from the Queensland Centre for Credit and Consumer Law speaking on statute barred debts. Sharkwatch would encourage financial counsellors to check out the CCCL website (at http://www.griffith.edu.au/centre/cccl/) to see these and other high quality presentations from the FCAQ conference.

Gregory Mowle takes new position

As Gregory noted in his letter to FCAQ conference attendees, he will be leaving Queensland shortly to take a new position with the Smith Family in NSW.

Queensland's loss is certainly a gain for NSW. Gregory has been an energetic, intelligent and effective force in Queensland financial counselling and will be greatly missed.

Sharkwatch wishes Gregory and his family well in their move to Sydney.

Lola Mashado new FCAQ President

Lola Mashado was elected as the new FCAQ president at the FCAQ annual general meeting this month.

Lola is a familiar figure to financial counsellors in Queensland and across Australia. Lola currently works as a gambling/financial counsellor with Relationships Australia, has represented the interests of financial counselling on various boards and councils, and has been a very active member of AFCCRA.

Lola will bring her own brand of enthusiasm, experience and irreverent humour to the position, and Sharkwatch wishes her well.

Ken Campbell elected new Queensland AFFCRA representative

Gregory Mowle has had to stand down as the Queensland representative on the AFCCRA council, due to his imminent departure to NSW. His position will be filled by Ken Campbell, the irrepressible Scot from the Lifeline Caboolture and Redcliffe Financial Counselling Service. Ken's energy, commitment and wisdom make him an outstanding replacement, and we at Sharkwatch suspect that his rogueish sense of humour will liven up many a future AFFCRA meeting.

Western Australia

WACOSS conference May 4–5

The annual conference of the Western Australian Council of Social Services (WACOSS) will be held from May 4 to May 5 this year, at the Sheraton Hotel in Perth. The theme of the conference is "Shaping the future: Social services and solutions for tomorrow". The conference will attract delegates from across the community sector, and it would be good to see financial counselling well represented.

Conference details can be obtained from: http://wacoss.org.au/conference2006/home.htm, and registration forms can be downloaded from: http://wacoss.org.au/conference2006/registration.htm.

Gosnells Community Legal Centre Launch Website

(From FCRP News, Feb. 17th, 2006)

The Gosnells Community Legal Centre (in Gosnells, Western Australia) has launched a website to increase community access to information about its services. The site includes information about all Gosnells CLC programs and who is eligible for free services — for example help with family law, domestic violence, tenancy, financial counselling or Centrelink issues. Gosnells CLC publications 'Domestic Violence and the Law: A handbook for advocates and community workers' and 'INC: A Guide for Incorporated Associations' can also be ordered online from the site.

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In The Media

House price crush

Darren Behar (Consumer Affairs Reporter)

A record number of NSW families lost their homes last year as growing numbers struggled to meet mortgage commitments. The number of homeowners facing the threat of a court repossession order on their property rocketed by one-third, The Daily Telegraph can reveal.

For the first time, the figure hit 4000 — or about 11 a day — compared with 3061 in 2004. Debt advisers handling growing numbers of people seeking help with mortgage repayments branded the rise as "scary".

Those typically losing their home are "traditional Aussie mum and dad families" aged between 30 and 50. The revelation will fuel fears many hard-working homeowners have over-extended themselves.

An interest rate rise, higher petrol prices, record levels of debt and other bills have combined to leave many families unable to pay mortgages.

Latest data shows that the average home loan in NSW rose by more than $1100 in one month alone — a rise the State Opposition blames on higher taxes introduced by the State Government.

During November, the average mortgage hit $258,700.

Opposition finance spokeswoman Peta Seaton said: "Over the last two years, NSW families have paid an extra $25,400 for the average mortgage, resulting in them paying an extra $175 per month in interest payments."

Australian families have built up a staggering $833 billion of debt — some $714 billion of which is home loans.

The repossession data represents the number of lenders going to the Supreme Court to seek an order so they can, if they wish, take possession of a home when someone fails to meet mortgage payments.

Almost all cases — typically over 95 per cent — are uncontested by the borrower, suggesting the lender is given the right to take possession of the home.

Families worst affected are those that bought at the height of the property boom. They believed that prices would never come down, tempting them to borrow more than they could really afford if circumstances changed.

Some are husband and wife teams who jumped into buying, renovating and then selling properties as investments. The live-for-today attitude led to staggering numbers borrowing against the rising value of their homes, taking on ever more mortgage debt, to repay credit cards or buy big ticket items such as cars and holidays.

Critics argue that financial institutions must share the blame for "irresponsible" lending, leaving many with debts that are too large. Competition has never been so fierce with new players and mortgage products more widespread than ever.

The Supreme Court will release its figures in its annual report, expected in May. But evidence of the problem comes from the rising tide of people calling debt advisory services for help about repossessions or problems meeting mortgage costs.

Experts believe in many circumstances the lenders are now tougher on those defaulting on their mortgage.

Katherine Lane at the NSW Consumer Credit Legal Centre, who is dealing with three or four people a week under threat of losing their home, said that in the past, it could be a year before a home was repossessed, but now, it could be as little as three months .

Ms Lane said: "There is something wrong here. The figure is scary. That's 4000 people in NSW alone losing their home. It is crazy."

Industry experts believe the figures do not reflect Reserve Bank of Australia data showing bad debts are still at exceptionally low levels.

The Australian Bankers Association's acting chief executive said: "From our perspective the situation as the Reserve Bank reports it is a good description of how we are seeing things."

The Daily Telegraph, Sydney, January 18, 2006

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