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New TIO report shows telcos still need to do more to help customers in financial hardship

A new report from the independent body handling complaints about telcos, the Telecommunications Industry Ombudsman (TIO), adds yet more weight to calls from financial counsellors for the industry to lift its game.

The TIO has released its latest systemic investigation, called “Responding to consumers in financial hardship”.

The report highlights the barriers and problems consumers face when accessing support from their telco.

A telling example is that some consumers were only able to get help from their telco after intervention from the TIO or a financial counsellor.

Another key problem highlighted in the report is a lack of accessible, proactive and timely hardship assistance. The report found repeated instances of long hold times, slow responses for online chat and providers not calling or emailing back.

These findings reinforce those in Financial Counselling Australia’s (FCA) survey of financial counsellors, released in April 2021.

Financial counsellors said that:

  • Overall, telco hardship practices are poor
  • Clients were often offered unaffordable hardship arrangements
  • Some were not offered hardship arrangements at all
  • Some had payment plans rejected

“Financial counsellors see the harm caused to so many people by poor telco practices. We’ve been telling the telco industry about some of their poor practices for a long time. Whether it is inadequate hardship responses or mis-selling, it’s time for it to stop,” said the CEO of FCA, Fiona Guthrie.

This latest report is just another example of a host of similar reports, publications and even legal action because the telco industry is not meeting community expectations. Click here to view the collated list.

“Seriously, how much more evidence do the telcos need to change their approach to financial hardship assistance?” said Ms Guthrie.

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]

Thousands turn to free financial counselling during latest lockdowns

Thousands of individuals and small business owners have sought help from the National Debt Helpline (NDH) and Small Business Debt Helpline (SBDH) as they struggle with financial issues during the current lockdowns.

The two national not-for-profit organisations run free financial counselling helplines and chat services, to help individuals and small businesses cope with financial hardship.

Both bodies are coordinated by Financial Counselling Australia (FCA), the peak body for financial counsellors in Australia.

Since the start of the year more than 71,900 calls have been made to the helplines. The NDH has received 70,183 calls and the SBDH, which is a relatively new service, has received 1,768 calls.

Small Business Debt Helpline – 1800 413 828

Demand has increased dramatically over the past few months, with 80% more calls in July than May.

The top five calls are, in no particular order:

  • Uncertainty about government grants and how to access them
  • Commercial leases – people unable to pay due to insufficient income during lockdowns
  • Issues with debt collectors
  • Problem with personal guarantees – risks and lack of understanding
  • Overall financial stress – most callers are in a state of distress and frustration

National Debt Helpline – 1800 007 007

Demand on the phoneline has not increased dramatically but visits to the website from the start of the year to the end of July are 25% higher than the same period last year.

There were more than a quarter of a million website visits from 1 January to 31 July. The top five calls are, in no particular order:

  • Mortgage arrears – difficulty paying, how to get hardship arrangements, catching up on arrears, some owners handing keys over to the banks
  • Rent arrears and homelessness
  • Credit card debt and personal loans, including car loans
  • Struggling to afford utilities, such as electricity and water
  • Separation and family violence

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

Anyone who is struggling financially 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.

Quotes attributable to Fiona Guthrie, CEO of FCA

“People are really struggling during these lockdowns. It’s great so many are reaching out for free help from financial counsellors, but we know there are many more who are suffering in silence or don’t know where to turn.”

“We want people to know that financial counsellors care and are here to help. They provide free, independent and confidential advice to people in financial hardship.”

“Assistance is only a phone call away. That initial conversation is likely to take a weight off your shoulders, because financial counsellors are trained to help you get back on track financially.”

To arrange an interview with Fiona Guthrie, Helen Davis (General Manager of the Small Business Debt Helpline) or a financial counsellor working on the helplines, call Maura Angle on 0418 334 121 or Georgia Lenton-Williams on 0422 707 136.

Financial counsellors welcome bank and gambling industry commitments to ban the use of credit cards for gambling. Government now needs to act.

Financial counsellors are delighted that common sense has prevailed, with the gambling industry announcing they will support a ban on the use of credit cards for gambling.

The community would expect nothing less.

The ball is now in the Government’s court, with the next step to introduce effective legislation, including adequate power for the regulator. We need to make sure this ban works as intended and covers all forms of credit.

Responsible Wagering Australia (RWA), the peak body for the major online gambling operators, announced on 12 August 2021 that it will introduce an industry ban on credit card funded gambling across their membership. It comes a week after TABCorp broke ranks and announced it would not oppose a potential ban.

Financial Counselling Australia (FCA), the peak body for financial counsellors, welcomes both the announcement by RWA as well as the role played by banking industry, through the Australian Banking Association, in reaching this sensible policy position.

“It is excellent news that the gambling industry and the banks accept that gambling with credit is dangerous and can exacerbate problem gambling,” said Lauren Levin, the Director of Policy and Campaigns at FCA.

“With these two sectors on board, the sooner the Federal Government can act the better,” Ms Levin said.

“Financial counsellors see the devastating impacts that gambling has on the lives of individuals and families. Legislating to ban the use of credit cards will help reduce this harm.

“If we can prevent some families from being ruined financially, or prevent at least some gambling-related suicides, this is a huge win.

“We want regulation that has teeth so that the Federal regulator, the Australian Communications and Media Authority (ACMA), is armed with penalties and other sanctions for those doing the wrong thing,” said Ms Levin.

The legislation needs to capture all the ways that credit card debt finances gambling, including via e-wallets, POLi Payments, payment platforms and new voucher businesses that exist solely to fund gambling.

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

  • Help with gambling issues
  • Assistance in dealing with debt
  • Assistance accessing government grants and other relief
  • Difficulties paying mortgages, rent or utility bills
  • Negotiating with banks and other credit providers
  • Accessing Centrelink payments

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

Anyone struggling financially 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:

Lauren Levin, Director of Policy, Financial Counselling Australia: 0411 050 035

Call for Afterpay Rebel Wilson advertisement to be discontinued

Financial Counselling Australia (FCA) is calling for a buy now pay later video advertisement which features actor Rebel Wilson to be pulled.

One scene depicts Ms Wilson sitting at a table speaking to a small child, saying “if credit cards and cash had a baby you could pay it over time without ever paying interest”.

“This ad is a step too far,” said Fiona Guthrie, the CEO of FCA.

“It minimises the risks of using buy now pay later products and the fact she is talking to a young child, explaining a credit product, is very disturbing,” Ms Guthrie said.

Financial counsellors are seeing an increasing number of people with buy now pay later debt. People think they’re harmless, but the reality is they are a form of credit and should be treated that way.

“That’s why we are writing to Ad Standards, the body overseeing the advertising industry’s self regulatory codes, to make a complaint about the ad. We want it discontinued as soon as possible,” Ms Guthrie said.

This ad is one of several celebrity focused campaigns currently used by various buy now pay later providers.

“Why these celebrities want to associate themselves with a product that can cause such harm is beyond us,” Ms Guthrie said.

“ASIC’s 2020 report found that 1 in 5 people are missing payments. It also found that as a result some people are cutting back, or going without essentials, such as food.”

“These slick and expensive campaigns only serve to lull consumers into using buy now pay later more. There is a high risk of getting into debt, especially if you are using the product multiple times or have more than one account.”

A recent NAB Consumer Insight Report found:

  • Nearly one in five Australians have buy now pay later debt.
  • 26% of 18 – 29-year-olds have buy now pay later debt.
  • A third of Australians have two accounts, 12% hold three accounts and one in twenty in have four or more accounts.

“It’s time for these products to be subject to the same laws as other forms of credit. They need to be regulated under the National Credit Act,” said Ms Guthrie.

Click here to view FCA’s complaint to Ad Standards about the Afterpay advertisement.

Media contact:

Call Maura Angle on 0418 334 121 or email [email protected]

Don’t suffer alone – there is FREE financial counselling available

Don’t suffer alone. That’s the key message from the National Debt Helpline (NDH) and Small Business Debt Helpline (SBDH) to those who are financially affected by lockdowns in NSW and Victoria.

The two national not-for-profit services run free financial counselling helplines and chat services, to help individuals and small businesses cope with financial hardship.

“These lockdowns are having an enormous impact on the financial well-being of so many people and free financial counselling is just a phone call away,” said Peter Thompson, a financial counsellor with the NDH in NSW.

“The extended lockdown is really tough for those who have lost work and we’re already experiencing an increase in calls and chats from construction workers due to the recent industry shutdown,” Mr Thompson said.

Victorian based financial counsellors are also urging people to reach out for help with the current lockdown now extended further.

“We want people to know we’re here, we care and we’re free,” said Claude Von Arx, who works for the NDH in Victoria.

“This is our fifth lockdown, and we just want people to know they don’t have to suffer alone and in silence,” he said.

Financial counsellors provide free, confidential and independent advice. They know what support and options are available for a business owner or individual.

“It’s really hard for people to keep up with what government and non-government assistance they are entitled to when they are in lockdown. We can help them navigate through all that,” said Sandra Blake, a financial counsellor with SBDH.

Anyone in financial hardship can access financial counselling for free, without travelling anywhere or waiting for a face-to-face appointment.

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

  • Assistance accessing government grants and other relief
  • Difficulties paying mortgages, rent or utility bills
  • Negotiating with banks and other credit providers
  • Accessing Centrelink payments

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

Anyone struggling financially 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 on 0422 707 136 or email [email protected]

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]

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