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Financial counselling peak bodies endorse Uluru Statement

The peak bodies in the financial counselling sector are proud to announce their support for the Uluru Statement from the Heart.

The Statement calls for a constitutionally enshrined First Nations Voice to Parliament, a Makarrata Commission to supervise a process of agreement-making between First Nations people and governments, and truth-telling about Australia’s history and colonisation.

These key reforms are referred to as: Voice, Treaty, Truth.

Together the reforms aim to bring structural change so that First Nations people can take their rightful place in guiding the future of Australia.

Reinforcing the need for structural change, we note that a number of the clients of financial counsellors and financial capability workers are First Nations people. This is just one legacy of the continued disadvantage faced by many First Nations people.

We are also proud that a number of financial counsellors and financial capability workers in our sector are First Nations people.

The Uluru Statement from the Heart was developed by more than 250 First Nations delegates and delivered at the National Constitutional Convention in 2017.

It concludes with these beautiful words: “In 1967 we were counted, in 2017 we seek to be heard. We leave base camp and start our trek across this vast country. We invite you to walk with us in a movement of the Australian people for a better future.”

We are walking with you.

While we announce our support for the Statement during NAIDOC Week 2021, we urge our members and the broader community to keep this conversation going well beyond July 2021.

FCA and the state and territory associations encourage financial counsellors, as well as other Australians, to support the Statement by signing up here.

Consumer groups applaud Federal Court ruling to uphold ASIC intervention in short-term credit market

Today’s Full Federal Court decision to dismiss an application by Cigno Pty Ltd (Cigno), seeking to quash the Australian Securities and Investments Commission’s (ASIC) product intervention order to reign in short-term credit fees and charges, has been applauded by consumer advocates.

ASIC’s product intervention order halted a regulatory avoidance model involving Cigno that saw significant fees and charges added to ‘collateral contracts’ with consumers. This model resulted in significant harm to many people across Australia, with some being signed up to contracts with fees costing upwards of 1,000 percent of the original loan amount. The product intervention order expired in March 2021.

“This is an important decision that should give the regulator confidence to use its product intervention powers again where there is evidence of significant consumer detriment. We urge Treasurer Josh Frydenberg to make the original product intervention order in relation to short-term credit permanent, so that people won’t need to worry about being stung by this predatory lending model again in future,’ said Gerard Brody, CEO of Consumer Action Law Centre.

Consumer groups supported the use of the product intervention power in submissions to ASIC’s consultation in 2019.

“This decision is a huge relief for financial counsellors. For the past few years we have seen too many clients unable to pay for food, rent or electricity because of loans to Cigno – loans that should never have been provided in the first place. ASIC’s product intervention powers are meant to address significant detriment and that is what they have done. The Cigno loan model needs to be stamped out,” said Fiona Guthrie, CEO of Financial Counselling Australia.

Since ASIC’s original product intervention order, a new ‘continuing credit’ model involving Cigno emerged that has sought to skirt around the law yet again. Financial counsellors and community lawyers have received calls from people who continue to be charged exorbitant amounts under this new model. ASIC consulted on a further product intervention order to address this new model in 2020 but has yet to make the order.

“This is an important win for thousands of consumers who have become tied up in debt and fees that far outweigh the small amount borrowed in the first place.  Financial Rights has made numerous complaints to the regulator concerning very vulnerable consumers who have contacted our service for assistance with these loans. We urge ASIC to use its powers as clarified by the Court and recent amendments to close down these exploitative lending models for good,”, said Karen Cox, CEO of Financial Rights Legal Centre.

Consumer groups responded to the disappointing Federal Court decision on 23 June 2021 dismissing ASIC’s action against Cigno for unlicensed lending here.

Media Contacts

Financial Counselling Australia: Georgia Lenton-Williams, Communications Adviser, 0422 707 136, [email protected]

Consumer Action Law Centre: Mark Pearce, Media and Communications Adviser, 0413 299 567, [email protected]

Court decision on Cigno lending model ‘extremely disappointing’

Today’s Federal Court decision that the lending model promoted by Cigno Pty Ltd did not breach the National Consumer Credit Protection Act (National Credit Act) is extremely  disappointing, and consumer advocates have urged the Australian Securities and Investments Commission (ASIC) to appeal the decision.

Over recent years, community lawyers and financial counsellors have been inundated with complaints about this lending model which results in people being signed up to contracts with fees costing upwards of 1,000 percent of the original loan application.

“ASIC did the right thing to initiate this legal action. Businesses who engage in credit activities need to be licensed and subject to charging limits, but tricky business models like this take steps to evade the law”, said Karen Cox, CEO of Financial Rights Legal Centre.

“This judgment appears to have taken a very narrow interpretation to the National Credit Act, finding that Cigno’s charges were not in connection with the provision of credit but for ‘application, management and collection services’, and that the associated lender only charged a $15 fee”, said Gerard Brody, CEO of Consumer Action Law Centre

“Justice Halley admits that the law as he applied it, following similar court decisions, ‘produces a result that could not have been intended’. We think ASIC should appeal this decision so that a superior court can examine the correct application of the credit legislation”.

ASIC has previously made a product intervention order in relation to Cigno Pty Ltd, and has consulted on a further product intervention order after it changed its business model.

“We also think ASIC should revisit its product intervention order so as to stamp out exploitative and predatory business models that cause substantial consumer detriment”, said Fiona Guthrie, CEO of Financial Counselling Australia.

Media Contacts

Financial Counselling Australia: Georgia Lenton-Williams, Communications Adviser, 0422 707 136, [email protected]

Consumer Action Law Centre: Mark Pearce, Media and Communications Adviser, 0413 299 567, [email protected]

Free financial counselling for flood and storm victims in Victoria

The National Debt Helpline (NDH) and Small Business Debt Helpline (SBDH) are reminding individuals and small business owners affected by the floods and storms in Victoria that they can access free financial counselling.

“As people recover from disasters like floods or damaging storms, advice and support from a financial counsellor can make a significant difference,” said Helen Davis, the General Manager of the Small Business Debt Helpline.

Financial counsellors provide free, confidential and independent advice. They can look at what options a business owner or individual has following a disaster.

“We want people impacted by the floods and storms in Victoria to know they can access financial counselling for free, without travelling anywhere or waiting for a face-to-face appointment.

“There are two services: the National Debt Helpline for individuals in financial stress and the Small Business Debt Helpline, for small business owners. They can just pick up the phone and call,” Ms Davis said.

Financial counsellors provide advice on a wide range of financial matters, including:

  • Disputes with insurance companies, the pros and cons of cash settlements
  • Assistance accessing government grants and other disaster relief
  • Difficulties paying mortgages, rent or utility bills
  • Negotiating with banks and other credit providers
  • Accessing Centrelink payments

“Floods and storms can be devastating, both emotionally and financially. As these communities start to rebuild, it’s vital they know financial counsellors can help.

“The Insurance Council of Australia has declared the damage a catastrophe, meaning insurers may offer special services and support for claims related to these events. Financial counsellors can help people navigate and access these supports,” said Ms Davis.

Financial counsellors are different to financial planners or advisors. They don’t provide investment advice nor are they lenders.

Anyone struggling financially due to flooding or storm damage can contact the National Debt Helpline on 1800 007 007 or visit ndh.org.au. Small business owners and sole traders can call the Small Business Debt Helpline on 1800 413 828 or visit sbdh.org.au.

Media Contact

Georgia Lenton-Williams, Communications Advisor: 0422 707 136 or email [email protected]

The National Debt Helpline urges Victorians to seek support

 

 

 

 

The National Debt Helpline (NDH) is urging people in Victoria experiencing financial stress due to the lockdown to seek free and independent advice.

“As we go into the second week of this lockdown, many Victorians will be suffering. It’s important they know they can speak with a qualified financial counsellor,” said Fiona Guthrie, CEO of Financial Counselling Australia (FCA).

“We are urging Victorians who have lost their jobs or had hours reduced to contact us. We care, we can help and we are free,” Ms Guthrie said.

NDH is also urging banks and lenders, utility providers and other suppliers of essential services to be mindful that Victorian customers may struggle to make ends meet during this period.

“We hope these organisations will understand that many people may experience financial hardship because of the lockdown and will need assistance with hardship arrangements. Please treat your customers with respect and empathy,” Ms Guthrie said.

NDH is a not-for-profit service that helps people in Australia tackle their debt problems. It is staffed by professional financial counsellors, whose advice is fully independent and confidential.

People can contact NDH financial counsellors by calling the helpline on 1800 007 007 or through live chat on the website, 9:30am-4:30pm weekdays. They will be put through to a financial counsellor in their own state or territory.

The NDH website also has practical step-by-step guides on how to deal with bills and debt.

Financial counsellors can help people to get through the next few months. For example, by providing advice about people’s rights to access hardship support from creditors such as banks, telcos and utilities.

Financial counsellors are different to financial advisors and planners.

Media Contact

Maura Angle, FCA Director of Community Engagement, 0418 334 121 or email [email protected]

Financial counselling for Victorian small business during lockdown

Small businesses affected by current lockdown measures in Victoria can access free help from small business financial counsellors.

Specialist small business financial counsellors help people to understand business debts and the implications of personal guarantees, as well as connect business owners with supports and grants that may be available.

They can also provide information about closing a business (including insolvency options) and give advice about other business matters, such as insurance claims.

“Lockdowns have an enormous effect on business and daily life. Many Victorian small business owners will be hit hard by this, so it’s important for them to know how to access support from financial counsellors,” said Dr Sandy Ross, Executive Officer of Financial Counselling Victoria.

Small businesses in Victoria can contact the Small Business Debt Helpline (a national service), or the Victorian Government’s Partners in Wellbeing – Small Business Support for free, confidential and independent advice.

  • Small Business Debt Helpline – Call 1800 413 828 or visit sbdh.org.au for online chat, 9:30am – 4:30pm weekdays

“We urge Victorian small businesses to seek support sooner rather than later. The time to act is now, please don’t wait for the bills and debt to get out of control,” said Helen Davis, General Manager of the Small Business Debt Helpline.

“Financial counsellors can play a crucial role in helping people and small businesses recover from the financial impacts of the pandemic,” said Ms Davis.

Individuals struggling financially due to COVID-19 lockdowns can contact the National Debt Helpline on 1800 007 007 or visit ndh.org.au.

It is important to note that financial counsellors are not financial planners or advisors. They do not provide investment advice nor are they lenders.

Media Contact

Maura Angle, Director of Community Engagement: 0418 334 121 or email [email protected]

Financial counsellors welcome Westpac ‘savings buffer’ initiative

Financial counsellors from across Australia have today welcomed a new Westpac policy, which will see hardship customers offered the option of building a savings buffer.

Some of Westpac’s customers will be able to reduce their home loan repayments, giving them some financial breathing space.

The bank aims to work with customers experiencing financial hardship to build a savings buffer of at least $100 a month.

Quotes

“This is really is great news for those customers who are in financial hardship. It will help them cope better with some of life’s emergencies,” said the Chair of the Financial Counselling Association of NSW, Pauline Smith.

“A savings buffer will give Westpac customers experiencing hardship a better chance of paying off some of their debts, without putting them under enormous stress,” said the Chair of Financial Counselling Victoria, Carly Baker.

“This initiative is incredibly important and one that will have a positive impact on people experiencing financial hardship. We hope the other banks will now follow suit,” said Wendy Black, the Chair of the Financial Counselling Association of WA.

“Financial counsellors know that we all experience unexpected expenses from time to time. This new policy means those customers building a savings buffer will be better able to cope,” said Fiona Moore, the Chair of Financial Counselling Tasmania.

“This will give many of Westpac’s customers experiencing hardship peace of mind and will go a long way to helping them cope with unexpected expenses and debt,” said Carolyn Piper, the Chair of the South Australian Financial Counselling Association.

“Westpac has taken the lead on this, and we encourage other banks to adopt similar policies for their customers in financial hardship,” said Vicki Penner, the Chair of Financial Counsellor’s Association of Queensland.

“A small savings buffer can make all the difference to those in financial hardship. This policy makes sense for the bank and its’ customers,” said Nicole Flaws, the President of Financial Counsellors ACT.

Please contact Maura Angle from Financial Counselling Australia on 0418 334 121 to arrange interviews.

FCA responds to TIO report – How many more wake up calls does the industry need?

What will it take before the telecommunications industry accepts that there are systemic problems with the way they sell and market their products?

There is yet another example today, with the release by the Telecommunications Industry Ombudsman (TIO) of its latest systemic issues report. The report documents poor sales practices, hidden costs and unclear information.

These findings reinforce those in FCA’s survey of financial counsellors, released just last month (April 2021). Financial counsellors said that:

  • Overall, telco hardship practices are poor
  • Mis-selling is common throughout the industry, with around 80% of the financial counsellors who responded to the survey saying they have clients with debts where mis-selling has occurred
  • Affordability checks are inadequate, which places people under financial stress

Financial Counselling Australia’s CEO, Fiona Guthrie, said that it is very clear that the telecommunications industry drives demand for financial counselling.

The telecommunications industry has been supportive in principle of an industry funding model for financial counselling but has called for more data.

Here is yet another piece.

“Financial counsellors are at the frontline, helping people who are struggling financially. We’ve been telling the telco industry about some of their poor practices for a long time. It’s time for them to fix the problems”, said Ms Guthrie.

The TIO report also follows last week’s Federal Court decision, which saw Telstra fined $50 million plus costs for unconscionable conduct involving mis-selling to Aboriginal and Torres Strait Islander people in remote communities.

Financial counsellors assist people experiencing financial difficulty. They provide information and advice to help people tackle their financial problems and to minimise the risk of issues occurring in the future. Financial counselling services are free, confidential and independent.

Media Contact:

Georgia Lenton-Williams, Communications Advisor

Phone: 0422 707 136 Email: [email protected]

Massive court penalty of $50 million against Telstra sends a very clear message

Today’s $50 million fine against Telstra for unconscionable conduct sends a clear message to the industry that mis-selling will not be tolerated.

The ACCC began investigating allegations of unconscionable conduct by Telstra after financial counsellors approached the regulator with 100 examples of Indigenous people from across the Northern Territory, South Australia and Western Australia being mis-sold telco products.

Telstra staff in five stores convinced Indigenous consumers to sign up to multiple post-paid mobile contracts which they didn’t understand and could not afford. Many accumulated massive debts – one as much as $19,000.

The ACCC then instituted Federal Court proceedings against Telstra for unconscionable conduct. Telstra admitted it breached consumer law and the court has now confirmed that the proposed fine of $50 million – the second largest in Australia under the Australian Consumer Law – is appropriate.

Based on the experience of financial counsellors, mis-selling in the telco industry more broadly remains a live issue. 80% of the financial counsellors in our survey in April 2021 said that they had clients where mis-selling was an issue. The Telecommunications Consumer Protection Code is not working to protect consumers.

Telstra is working constructively with financial counsellors in its remediation program and we welcome their ongoing commitment to this process.

Quotes

Fiona Guthrie AM, CEO of Financial Counselling Australia

“We welcome this development and are also pleased to see that Telstra, in addition to the remediation actions they have embarked upon to date, have formally acknowledged the damage their behaviour has caused.”

“Financial counsellors have worked for three years together to see this ACCC action succeed. Today’s announcement is an important milestone but it’s not the end of our campaign to see mis-selling in the telecommunications industry stamped out.”

Peter Gartlan, Financial Counselling Australia

“This conduct should never have happened in the first place. The ACCC has now sent a clear message to corporate Australia and other telcos, that this sort of behaviour is not on. It causes harm to individuals and families.”

“This case shows the vital role financial counsellors play in ensuring vulnerable consumers are protected from unconscionable conduct.”

“Time and time again, financial counsellors in outback towns and cities have seen clients from remote communities struggling under the weight of massive Telstra debts – one client had a debt of more than $19,000.”

“Financial counsellors are pleased that Telstra is waiving these debts, but we fear there are more remote people who still have debts with telcos and also need redress.”

ENDS –

For comment please contact:

Peter Gartlan on 0457 700 028 or Maura Angle on 0418 334 121

More than 650 people registered for Financial Counselling Australia’s conference in Darwin

More than 650 people have registered for Financial Counselling Australia’s (FCA) annual conference, Monday May 17 – Friday May 21.

Around 60 of these registrations are for the virtual ‘zoom me in’ version of the conference, which allows attendees to participate remotely via video streaming technology, while the remaining attendees will visit the conference in person at Darwin.

This is a remarkable outcome, as last year’s conference was cancelled due to the COVID-19 pandemic and subsequent travel restrictions throughout Australia.

“Earlier this year, we didn’t know if we’d be able to get this event off the ground. Despite our sense of optimism, at times things seemed unpredictable with travel restrictions,” said Fiona Guthrie, the CEO of FCA.

“We couldn’t have secured more than 650 registrations without the support and enthusiasm of everyone involved – we’re extremely grateful for that,” said Ms Guthrie.

In collaboration with the Northern Territory government, FCA has implemented a comprehensive health safety plan to mitigate any risks associated with the pandemic.

“We’re determined that our 2021 conference will go ahead. In fact, we’ve planned meticulously to make it happen. It’s great that COVID-19 case numbers are low enough now that we can travel interstate.

“Financial counsellors and capability workers, community lawyers, financial regulators, industry representatives and many others will travel from far and wide to sunny Darwin,” said Ms Guthrie.

Conference attendees are encouraged to explore the Northern Territory and to support local businesses.

“We had feedback from Darwin-based financial counsellors that the end of JobKeeper and reduction of JobSeeker has hit some small businesses hard. We want to support the local economy.

“We’ve planned activities for our conference attendees around Darwin: the deckchair cinema, Mindil Beach Markets and a walking tour, as well as visits to local bars and restaurants,” Ms Guthrie said.

The conference will take place at the DoubleTree by Hilton Hotel on the esplanade. Some events will also be held at the nearby Darwin Entertainment Centre.

Please note that FCA’s conference is not open to the public. It is a closed event for people who are part of the financial counselling sector, as well as financial regulators and service providers.

About financial counselling in the Northern Territory

Financial counsellors assist people experiencing financial difficulty. They provide information and advice to help people tackle their financial problems and to minimise the risk of issues occurring in the future. Financial counselling services are free, confidential and independent.

In the Northern Territory, financial counselling services are provided by several community organisations, such as Anglicare NT, Somerville Community Services, Catholic Care NT, HK Money Management, Lutheran Community Care and MoneyMob.

For people who are struggling with debt, the best way to access financial counselling is to call the National Debt Helpline on 1800 007 007. Callers are put through to a financial counsellor in their state or territory, who can refer them to face-to-face services if needed.

Media contact

Maura Angle, FCA Director of Community Engagement

0418 334 121 or email [email protected]

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