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Don’t Knock – Its the Law

1st October 2012 – Financial Counselling Australia (FCA) congratulates the Australian Competition and Consumer Commission (ACCC) on their historic and significant win in the Federal Court last week, in a case cementing the legal enforceability of ‘Do Not Knock’ stickers.

The case, brought against an energy retailer and a marketing company acting on its behalf, is the first under the Unsolicited Consumer Agreement provisions of the Australian Consumer Law. The court awarded penalties of $1 million to be paid between the two organisations.

“The court ruled that a failure to leave the home of a consumer when requested, including ignoring a ‘Do Not Knock’ sign, was a breach of the Australian Consumer Law and subject to a penalty of up to $50,000 in each instance,” said Fiona Guthrie, Executive Director of FCA. “That is potentially $50,000 each and every time a ‘Do Not Knock’ sticker is ignored. The ruling is a fantastic win for consumers.”

FCA has been part of a ‘Do Not Knock’ campaign aiming to put an end to intrusive, annoying and misleading door-to-door sales practices.  Tens of thousands of ‘Do Not Knock’ stickers have been sent to consumers on request, including a specific Aboriginal and Torres Strait Islander (ATSI) sticker that has been widely distributed in remote areas of Australia since its launch in May this year.

“Unwelcome door knocking occurs throughout Australia, but is a particularly insidious problem in Indigenous communities,” said Ms Guthrie. “Indigenous people can be more likely to say “yes” to a salesperson; it can be considered culturally inappropriate to directly contradict someone so this exacerbates the problem. Regular feedback from financial counsellors is that their clients, who are often on low incomes, sign up for products because of the pressure they are put under on their own doorstep.”

“Unscrupulous door-to-door traders targeting Indigenous communities will say or do anything to get a sale. We have been very concerned at recent reports of some of these traders ignoring Do Not Knock stickers,” said Ms Guthrie (see case study below). “This court decision makes it much less likely that door-to-door traders will ignore stickers, but if they do  – be warned – we will complain. The penalties are severe.”

Case Study 
This example, from a financial counsellor based near an Aboriginal community in remote NSW, illustrates how unscrupulous door-to-door traders are operating. The counsellor visited a particular street in the community and found that a rental company had recently been through, asking residents whether they needed any furniture and encouraging them to sign up for a rental deal. In that one street, four houses had been decked out with furniture the occupants couldn’t afford. All four of the houses had ‘Do Not Knock’ stickers.

For more information on the Do Not Knock campaign, including information on how to download Do Not Knock stickers, visit www.donotknock.org.au

Want to be MoneySmart? Halve your income

2nd September – “Plenty of people on low incomes are terrific at budgeting; they have to be!”

Today marks the beginning of MoneySmart Week – a national initiative bringing together more than 100 organisations from the business, government and community sectors, with the aim of advancing the financial literacy of all Australians. Financial Counselling Australia is delighted to support MoneySmart Week and encourages Australians to take advantage of the free information and online calculators available.

“MoneySmart week is for all of us – no matter what your income or asset position,” says Fiona Guthrie, Executive Director of Financial Counselling Australia.

FCA encourages all Australians to complete the Money Health Check available on the MoneySmart week website (www.moneysmartweek.org.au) and to use the results to make some changes to their financial situation. “The money health check will only take a few minutes to do, but is very comprehensive – it takes people through the setting of goals, setting a budget, managing debts, saving, insurance, superannuation and estate planning,” Ms Guthrie said. “Once you have answered all of the questions, you’ll receive an online report highlighting any gaps or areas of need. The report also includes links to a number of other online tools and calculators that can help you. It’s an excellent activity.”

“Since the 1980s there has been an explosion of financial products in the marketplace. While consumer choice is a good thing, it also increases the complexity of financial decision-making. It’s not surprising that many consumers simply aren’t sure how to achieve their financial goals,” said Ms Guthrie.

Many Australians, particularly those on above-average incomes, could benefit by trying to live on less for a month or two. “Generally – and it’s human nature – our expenses often increase in line with our income,” Ms Guthrie said. “Whether it’s buying more takeaway, more expensive clothes, toys for the kids or taking more holidays, we tend to spend what we earn, regardless of the amount! Many of us just don’t know where all of our money goes. Plenty of people on low incomes, though, are terrific at budgeting; they have to be.”

“In keeping with the goals of MoneySmart Week, we are encouraging all Australians who are on or above an average income to try living on less. Obviously pay your bills on time, but when it comes to everything else, try halving it. That might mean public transport instead of expensive car parking or home cooking instead of takeaway. There are dozens of ways to cut costs. You might be pleasantly surprised with what you can achieve.”

Improving financial literacy isn’t the answer for everyone though, and for some in our community, reducing costs isn’t an option. “Some people simply have insufficient income to survive; those on the Newstart allowance of just $35 a day for example,” Ms Guthrie said. “For people who are below the poverty line, financial literacy isn’t the answer to financial difficulty. We also need a concerted push towards ensuing access to safe and affordable financial products. We are confident that that will happen over time and increasing the financial literacy of all Australians, through MoneySmart Week, is an important step along that path.”

Anyone who is in financial difficulty can contact a free and independent financial counsellor on 1800 007 007.

For further comment please contact:
Fiona Guthrie
Executive Director, FCA 
Ph: 0402 426 835 

Support the Do Not Knock Register

28th August 2012 – Financial Counselling Australia (FCA) encourages the public to throw their support behind a private member’s bill that aims to establish a “Do Not Knock” register.

Introduced to Parliament by Federal MP Steve Georganas, and currently the subject of a House of Representatives’ Social Policy and Legal Affairs committee inquiry, the objective of the bill is to empower consumers to opt out of receiving door-to-door sales visits. Similar to the Do Not Call register that was established in 2006, a Do Not Knock register would prohibit unsolicited marketing approaches to registered properties and provide a framework for enforcement.

“It is just over five years since the Do Not Call register was set up and already over seven and a half million phone numbers are registered with the service,” said Fiona Guthrie, Executive Director of Financial Counselling Australia. “Based on research that has been done into consumer attitudes towards door-to-door marketing, we would expect the Do Not Knock register to be similarly popular.”

A survey of 1,014 people conducted this year by the Consumer Action Law Centre, found that 85% of participants supported the concept of a Do Not Knock register. Other key findings of the survey were:

·         77% of those surveyed dislike door-to-door sales;
·         only 3% of participants had a generally positive opinion of door-to-door selling;
·         the majority of those surveyed feel misled by in-home sales;
·         56% of those surveyed feel the greatest pressure to purchase when visited at home (in comparison with online sales, purchasing in-store and so on)

“It is those who feel pressure to purchase who most concern us,” says Ms Guthrie. “People certainly find door-to-door selling intrusive and annoying, but beyond the inconvenience of the visits is the fact that for vulnerable members of our society – the elderly, for example, some members of regional and remote Aboriginal and Torres Strait Islander communities, those with a low level of financial literacy or those who do not speak English fluently – the high-pressure sales tactics used can result in real financial hardship.”

Financial Counselling Australia believes that there are systemic problems with door-to-door selling. “I receive a regular flow of feedback from financial counsellors, expressing concern over sales tactics that have been used on some of their clients,” says Ms Guthrie.

“People can feel intimidated by the salespeople and to avoid confrontation will sometimes sign the contract being pushed, just to get them out of their house. There is an argument that door-to-door sales should be prohibited altogether, in the same way as financial products are prohibited from sale under the Corporations Act. At the very least though, a Do Not Knock register for other commercial goods and services would allow people to easily  say ‘no’.”

Government organisations, religious groups and charities would be exempt from the register, but Ms Guthrie acknowledges that the private members bill will likely face strong opposition from some commercial industries that currently run door-to-door sales campaigns. To help counter this self-interest she encourages supporters of the bill to sign the online petition launched by Mr Georganas. The petition can be found at: http://www.communityrun.org/petitions/stop-the-knock-pass-the-do-not-knock-register-bill-2012

“For the sales people, each contract represents a bit of extra commission,” says Ms Guthrie. “But for some consumers, that contract represents financial hardship. We very much hope that this bill is passed and results in some much-needed protection.”

Financial Counselling Australia and the Consumer Action Law Centre are involved in a joint  Do Not Knock campaign. There is more information at www.donotknock.org.au including information on how to download Do Not Knock stickers.

For further comment please contact:
Fiona Guthrie
Executive Director, FCA
Ph: 0402 426 835

Legal protection for the term “financial counsellor” – An historic win

27th August, 2012 – Financial Counselling Australia (FCA) welcomes the passage of Section 160C of the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011, by the Federal Parliament earlier this month. This section restricts the use of the terms “financial counsellor” and “financial counselling” to organisations that provide financial counselling services as prescribed under the National Consumer Credit Protection Regulations 2010. While it may seem a minor provision to many people, it represents an historic win for hardworking financial counsellors in the not-for-profit sector.

“Financial counsellors are a unique and important profession providing free, confidential and independent assistance to consumers in financial difficulty. It has been a source of great frustration to us that up until now, use of the term ‘financial counselling’ has been open to anyone,” says Fiona Guthrie, Executive Director of FCA.

“Research published by Monash University in 2009 concluded that our Australian model of financial counselling, based on community development principles and incorporating a social justice philosophy, almost certainly represents world’s best practice. Despite that, however, profit-seeking operators have been able to attract consumers into expensive and unnecessary financial arrangements by purporting to offer financial counselling services. Section 160C will put a stop to this with one fell swoop.”

Coming into effect on 1st March 2013, the new restrictions will apply to any organisation that does not comply with the provisions under the National Consumer Credit Protection Regulations 2010, namely that the agency:
·       does not charge any fees or receive any remuneration arising from the financial counselling service; and
·       ensures that the agency and its staff do not provide any other credit activity outside the terms of the exemption; and
·       ensures its financial counsellors are a member of, or eligible for membership of, a financial counselling association; and
·       ensures its financial counsellors have appropriate training and adequate skills and knowledge.

“Financial counsellors work in non-profit community organisations and their services are free, independent and confidential,” says Ms Guthrie. “They are often seeing clients who are stressed or vulnerable and they provide information, support and advocacy to help these consumers deal with not just their immediate financial situation but also the risk of future financial difficulty. The primary obligation of a financial counsellor is to work in the best interests of their client.”

Ms Guthrie contrasts this service to the commercial activities of debt agreement administrators, credit repair companies, payday lenders and budgeting assistance businesses who very often are charging clients a fee for a service that the client could access elsewhere for free.

“Where there is money to be made, there are almost always businesses offering a service for profit,” says Ms Guthrie. “Often, consumers are confused about what is available out there. Fee-charging businesses may take advantage of that confusion, not to mention the vulnerability of many of those who are in financial difficulty. These are the people who can least afford to pay unnecessary fees, so we hope that the upcoming restrictions under section 160C will help direct consumers to the free and supportive services they need.”

People from all walks of life and circumstances speak to financial counsellors. Money problems can happen to anyone. While some people might feel embarrassed about seeking help, financial counsellors are not judgmental about a person’s circumstances, and offer confidential, independent and free assistance.

A financial counsellor will assist by:

* Doing a full assessment of your financial situation, including regular income and expenditure, assets and liabilities to help you fully understand your position

* Providing advice about what options, rights and responsibilities you may have

* Helping to negotiate on your behalf with your creditors, government agencies and any other business providers

* Referring you to other services you may require, such as legal services, crisis food and accommodation services, and health services

To contact a financial counsellor ring 1800 007 007 from anywhere in Australia

For further comment please contact:
Fiona Guthrie
Executive Director, FCA 
Ph: 0402 426 835 

Boost to Centrelink call centre staff a welcome relief

6th August 2012 – Financial Counselling Australia and the National Welfare Rights Network have both welcomed the federal government’s announcement of a boost in staff numbers for the Centrelink call centre. With some welfare recipients currently remaining on hold for up to 90 minutes, both organisations describe the boost as sorely needed.

“The volume of calls made to Centrelink has increased by more than twenty percent over the past six years, to a current level of around one hundred and fifty thousand calls per day,” said Maree O’Halloran, President of the National Welfare Network.

“That is a significant increase and very obviously requires a greater number of front-line staff to service them. The announcement last week by Senator Kim Carr, the Minister for Human Services, that call centre staff numbers will be increased and that other Centrelink staff will be redeployed to the call centre during times of peak demand is welcome news. We hope that the staffing level increase will be permanent.”

Time is money …

No one likes being kept on hold, but according to Fiona Guthrie, Executive Director of Financial Counselling Australia, welfare recipients can least afford it. “Some clients of our financial counsellors have been reporting wait times of up to two hours when phoning Centrelink,” she said. “If they don’t have access to a landline and have to use a mobile phone, it can be costing them money that they simply don’t have. Senator Carr has recognised this issue and by increasing staff numbers has made an important first step in helping to reduce the wait time, associated cost and associated stress for a vulnerable section of our community.”

“We congratulate the government on being proactive with regards to this issue, and hope that they will continue to monitor call wait times and adjust staffing levels accordingly.”

Free ATMs good news for remote ATSI communiites

25th May 2012: Financial counsellors and money management workers have welcomed today’s announcement from the banking industry and private ATM providers that should ultimately see ATM fees abolished in a number of remote Aboriginal and Torres Strait Islander communities.

The announcement follows a report by FCA* in December 2010, that highlighted the high cost of ATM fees for Aboriginal and Torres Strait Islander people living in remote communities. FCA’s report found that some people were losing as much as 20% of their incomes on ATM fees.

ATMs in very remote ATSI communities in the Northern Territory, Western Australia, South Australia and Queensland are mostly owned by private ATM operators. This means that people in these communities cannot access free bank-owned ATMs, and they end up paying a fee every time they withdraw cash or check their account balance.  These fees quickly add up.

Many ATSI people are also frequent users of ATMs – for example checking an account balance multiple times on the day a payment is expected.  Other people withdraw small amounts of cash regularly because this makes it easier to budget or because they purchase food every day, due to poor refrigeration. Alternatives such as internet or phone banking to check account balances are also generally not available in these communities.

Fiona Guthrie, Executive Director of FCA said that “the current situation was both untenable and manifestly unfair. This proposed reform will make an enormous difference in these communities. People on low fixed incomes will now have more money available to spend on food, clothing and other household bills.”

“We congratulate the Government on their role in brokering a solution as well as the banking industry for recognising the problem and acting decisively to do something about it.”

“This initiative from the industry shows that they are serious when it comes to helping ATSI people living in remote communities. It will make a real difference to some of the most disadvantaged people in our society who have limited access to banking facilities.”

MR-120525-ATM-Fee-Announcement-Welcomed-by-Financial-Counsellors.docx 

Launch of ATSI ‘Do Not Knock’ sticker by Minister Shorten

15th May 2012: Minister for Financial Services, the Hon. Bill Shorten MP, has helped Financial Counselling Australia (FCA) and CentaCare Wilcannia-Forbes launch a new front in the Do Not Knock campaign aimed at reducing harmful door-to-door sales practices in Indigenous communities.

Minster Shorten launched the project, which includes a new ATSI Do Not Knock sticker, at Financial Counselling Australia’s National Conference which was attended by over 300 financial counsellors from around Australia.

Fiona Guthrie, Executive Director of FCA, said the genesis for the project was the first hand of experience of financial counsellors seeing people in remote Aboriginal or Torres Strait Islander communities being targeted by shonky door-to-door salespeople.

“In one case we had a door-to-door company targeting remote ATSI communities and selling people first aid kits worth around $50 for $300-$500. Whether it is high pressure selling, an inability to say no to someone at the door, or a misleading salesperson, this type of practice needs to be wiped out and we hope the project we’re launching will do just that,” said Ms Guthrie.

The team managed by Lynda Edwards, Program Manager at CentaCare Wilcannia-Forbes had the idea of developing an ATSI-specific Do Not Knock sticker. “We’re attacking the problem from both sides by producing a ‘do not knock’ sticker to stop salespeople in the first instance, backed up by educational material that will help people in remote communities to understand their rights and how to turn away a salesperson.”

“Many companies set up direct debits from customers’ bank account to ensure they get paid. Sadly the money is debited regardless of the customer’s bank balance and can often force the account into the red—resulting in the account holder being hit with a dishonour fee,” said Mrs Edwards.

To complement the new do not knock materials, CentaCare Wilcannia-Forbes has also published Don’t get clawed over the phone which focuses on telemarketing and how to say no. Mrs Edwards said many customers’ politeness led to them being up signed up for products over the phone that they didn’t need, want or could afford. Financial Counselling Australia has also put together a series of innovative community education “flash cards” about door-to-door selling.
A6-sticker.pdf 
MR-Indiginous-DNK-project-15_05_12.pdf 

Free calls for mobile phone users

24th April 2012: Financial counsellors today welcomed news that the cost of ringing 1800 and 13 phone numbers from mobiles will finally be the same as those from a landline.

The campaign for “Fair Calls for All” was led by the Australian Communications Consumer Action Network (ACCAN), ACOSS and FCA. The original impetus for the campaign came from financial counsellors. Many of their clients rely solely on mobile phones. The cost of calling say the bank or Centrelink can be huge for someone on a low fixed income. Many people reported not being able to access vital services for this reason.

There is more information about the campaign on the ACCAN website: www.accan.org.au

Formation of Financial Counsellors ACT is a milestone

1st March 2012: The financial counselling sector has warmly welcomed the formation of a new incorporated financial counselling association:  Financial Counsellors ACT.

The formation of Financial Counsellors ACT represents a huge leap forward for the profession.  There are now incorporated financial counselling bodies in every State and Territory in Australia – a huge milestone and well worth celebrating.

The  State and Territory financial counselling associations set membership and accreditation standards for financial counsellors. They also provide a vital voice for their members on issues affecting them or their clients. This is why it is so important to have a properly constituted professional body in each jurisdiction.

In the past 15 months, two other new financial counselling associations have also been formed: the Money Workers Association of the Northern Territory and Financial Counselling Tasmania.

The existing associations are: the Financial and Consumer Rights Council (Victoria); Financial Counsellors Association of NSW; Financial Counsellors Association of Qld; Financial Counsellors Association of WA; and South Australian Financial Counsellors Association.  Each State and Territory body elects one person to represent their association on the board of the national peak, Financial Counselling Australia.

The challenge for all financial counselling associations is a lack of resources. The majority of Associations receive no government funding, relying on voluntary management committees. The workload in organising professional development, supervision, accreditation processes and conferences is enormous. But even the funded associations can struggle – as the sector grows and professionalises, so to do demands on associations.

We acknowledge however the support of some financial institutions toward the cost of conferences, websites and similar  projects for State and Territory associations. While direct industry funding for casework is problematic, capacity-building funding for the sector  has been vital, particularly in helping the unfunded organisations continue to function.

This however is not a sustainable model for the future. The sector will be held back unless unfunded associations in particular can access adequate and ongoing funding. The role played by these bodies is absolutely critical – a “voluntary” model will simply not cut it.

120301-Formaton-of-FC-ACT.docx 

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