Inside this issue:   

• Notes & Notices
• Saying ‘No’: A Guide For Counsellors
  Wayne Warburton
• The National Financial Counsellors’ Resource Service Has Moved..
• Citibank Hardship System
• The Law Matters: When is a Centrelink Payment Protected From a  Garnishee or Attachment Order?
  Richard Brading
• Remembering Jan Pentland
  Fiona Guthrie
  
• Best Story Entry
• AFCCRA’s New Executive Director: Fiona Guthrie
• AFCCRA Update
• Round-Up
  News, views and information about financial counselling around Australia
• In the Media
  Snippets of interest and information found in the media regarding issues around financial counselling 
  

Notes & Notices    

ATO Hardship hotline

Lyn Brailey advises that the ATO now has a hardship hotline for Financial Counsellors’ only.

1300 788 347.

Other relevant numbers are:
DEBT enquiries general 13 1142
24hr individuals 13 28 65
24 hr business 13 72 26

Telstra boss drops bill payment fee after customer feedback

Telstra CEO David Thodey today announced the company will drop a $2.20 administration fee for bill payments made over-the-counter or by mail after listening to feedback from customers and shareholders.

Mr Thodey said the change would be implemented over the next few months and Telstra would automatically refund all of the bill payment administration fees paid by current customers during that time and since the new charge was first introduced on 14 September 2009.

Interestingly, Mr Thodey noted that “it is now clear to me that introducing this fee across our existing plans was the wrong way to encourage customers to move to electronic payments”.

Mr Thodey asked customers to be patient while the changes were implemented through the company's billing system. Telstra will credit current customer accounts, including any $2.20 administration fees that appear on their bills during this period.

Mr Thodey has also said that Telstra will now look for new ways to encourage customers to take advantage of electronic payments, with one possibility being an optional ‘electronic-only’ plans.

Telstra will still honour its commitment to a special offer of up to $50 Cash Back through to the end of December 2009 on selected Telstra Shop product    purchases for customers who continue to sign up for direct debit payment options.

CBA Hardship team report

Lyn Brailey provided this report on the Commonwealth Bank hardship team:

A general outline of the hardship department is as follows:

There are 4 departments, maintained by approx 15 staff (60 in total) divided into 4 sections.

Section 1, 2 & 3 receive calls from Consumers/General. Each section has a senior officer and an operations manager.

As of the 30th of November 2009, Section 4 will be dedicated to Financial Counsellors ONLY (we will advise of details later).

CBA will look into a dedicated fax and email line for financial counsellors. Currently we can use the email on their website under customer assistance which will go directly to this dedicated department.

CBA will accept financial counsellors’ Letters of Authority and Statements of Financial Position.

CBA will also attempt to resolve/discuss broader options in relation to client’s financial difficulties.

Lyn Brailey

Financial assistance for this Project was provided by the New South Wales Government from the Responsible Gambling Fund. The views expressed in this publication are solely those of the authors and do not represent the views of the Responsible Gambling Fund or of the New South Wales Government.

Wesley Community Legal Service gratefully acknowledge the sponsorship of LexisNexis, whose assistance has enabled our solicitors to have  access to the Butterworths Direct Online package.

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Saying ‘No’: A Guide for Counsellors    

Wayne Warburton, National Financial Counsellors’ Resource Service

One area that is rarely discussed in counselling circles is when a counsellor should say ‘no’. This may be because those of us attracted to counselling tend to be caring people who want the best for our clients and find it hard to refuse service to potential clients or to refuse our clients’ requests.  Nevertheless, knowing when it is not appropriate to take on or see a client is a key skill that we all need to learn. It is also important to know when to say ‘no’ to client’s requests, and to be able to manage our workloads by saying ‘no’ sometimes. This article is just a collection of some of my thoughts on the matter, but it may be a helpful starting point in terms of getting counsellors thinking about when and how to say no.

When would you not take on a client, but refer them on? When would you not see a client?

There are several areas that are relevant to this question.

1. Seeing the client raises personal issues for you

There are some clients that just push our buttons or raise personal issues that are likely to create an emotional response that can affect our judgement or make it difficult for us to give them unconditional   positive regard (the basic foundation of good counselling practice and usually a necessary precursor to good client outcomes). For example, I know of counsellors who have decided against taking on or continuing to see a client because

• they were too sexually attracted to them;
  
• they were disgusted by the client’s behaviour;
  
• the client was a paedophile and this raised personal issues of abuse; and
  
• the client had a relationship with the counsellor.

I think these were good decisions in all instances because it is very difficult to provide high quality counselling if you are distressed, preoccupied with your own issues, or dislike a client to the extent that it is hard to be objective. If a client raises personal issues that will make it hard for you to provide the best possible professional service, then you should consider, in consultation with your supervisor, whether to refer them to another counsellor.

2. There are professional reasons why you should not see a client

Such instances might include being unable to provide the necessary level of expertise that a client needs (e.g., a client with very complex legal or bankruptcy issues), having a conflict of interest (e.g., the client owes money to someone you know), or the situation where the need for counselling has come to an end and there is no purpose to continuing (e.g., all debts are repaid and the client is successfully managing their own finances). Depending on the reason, you may decide it is most appropriate to refer the client to another financial counsellor or to cease counselling contact with the client altogether.

3. The client has issues which make financial counselling inappropriate

It is not uncommon for clients to have personal issues that make the provision of financial counselling in the short-term (and sometimes the long-term)  inappropriate. These might be related to:

• the client’s current state (intoxicated, stoned, too upset or angry to have a rational discussion);
  
• a problem that is more pressing (the client is suicidal, having a psychotic episode, or is physically sick);
  
• ongoing capacity issues (the client may have a very low IQ, or may have cognitive problems related to brain injury, dementia, schizophrenia or another illness, and, as a result, may be unable in the long term to  manage their own affairs);
  
• issues that need to be resolved before financial counselling can be commenced (e.g., problem gambling); and
  
• behaviour issues (the client is persistently aggressive, is making sexual advances to the counsellor or is stalking the counsellor, is persistently dishonest with the counsellor or their creditors, or is using the counselling service to  assist in a dishonest outcome).

In some instances you will need to seek immediate assistance or refer to another professional service with a view to commencing financial counselling when matters are resolved. In others you may need to make the judgement call that it will never be appropriate to assist the client. Sometimes you may decide that another (such as a public trustee) would be more appropriate to assist your client with their finances.

Some principles for referring on:

Here are some principles that may be helpful in the process of deciding to refer someone on, and the process of letting the client know that you are referring them on:

• Be wise enough to know when and brave enough to do it;
  
• Try not to cut someone adrift – make sure they are referred to someone else;
  
• Be professional but kind;
  
• Choose the best possible referral;
  
• Explain why; think carefully about what you will say.

Saying No

Sometimes it is not a matter of whether or not to see a client, but a matter of when and to what we should say ‘no’.

Things we should not do for clients as part of our professional practice.

If we were to put forward a list of all the things we should not do for our clients, it would fill many volumes of Sharkwatch. I will just mention a few key areas that have been problematic in my experience. In my view, it is a mistake for a financial counsellor to fill out the Statement of Affairs on behalf of a client except in the most exceptional circumstances. It is certainly a mistake to cross professional boundaries with a client when  invited to (e.g., would you like to come and have a drink after work?), or to behave unprofessionally because a client has manipulated our feelings (e.g., abuse a creditor on the client’s insistence).

Many clients will also ask for a high level of assistance. My view is that this can often undermine the process of empowering the client, and so it is sometimes appropriate to say ‘no – how about you do this?’ By refusing to take on certain tasks that are within the client’s capabilities, and asking the client to take responsibility for those tasks themselves, you are often helping the client to develop lasting skills that will be the basis of good future financial management. Here are some ideas that are relevant:

• Get clients to do what they can for themselves, without setting them up for failure
  
• Increase or decrease client tasks with time, depending on how they are handling things
  
• Remember, depressed clients have reduced cognitive functioning and problem solving ability and will need more help than non-depressed clients

Saying no in the workplace, and managing workload

Financial counsellors are traditionally poor at managing their own workload, and counsellor burnout is one of the most pressing issues facing our profession today. As many of you know, I could rave on about this topic for hours, but in the interest of your sanity, I provide the following concise points:

• Plan for the long haul, to be counselling well into the future;
  
• Prioritise and let less important tasks go;
  
• Work with your supervisor to find a workload that you can manage;
  
• Ask your supervisor/boss what is the best way to approach letting them know when you cannot do something;
  
• Keep communication channels open at work, especially when things aren’t going well and the natural impulse is to withdraw;
  
• Consider counselling for how to say ‘no’ or how to be assertive without being aggressive or unpleasant;
  
• It is easier to say no when you are relaxed,confident, feel secure in your job, and have good work relationships;
  Anything that assists in this regard will help you to say ‘no’
  
• Sometimes, in your own interests, and ultimately in the interests of your clients, you will need to be brave, to stand up, and to argue for work conditions that are reasonable. If you do, use whatever resources are available — documents on burnout and fair work loads, advocacy from peak bodies (such as AFCCRA, FCAN, FCAWA, SAFCA, FCRC, FCAQ) and other relevant bodies (unions, employee groups etc.), as well as research findings which show that quality of service and productivity is linked to supportive and fair work environments. 

A final word

It is one thing to know when to refer a client on or when to say ‘no’ to them, but quite another to do it. Clients are people and counsellors are generally sensitive to other people’s feelings. Saying ‘no’ is hard. It requires wisdom, strength of character, and sensitivity. A good counsellor needs to develop their skills in saying ‘no’ just like any other skill, so that when the time comes, that ‘no’ will be for the right reason, at the right time, in the right place, and said in the right way. Speaking to experienced counsellors and watching how counsellors you admire manage this difficult task is a helpful place to start.

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The National Financial Counsellors Resource Service (NFCRS) Has Moved   

Jennifer Gracie, Lyn Brailey, and Wayne Warburton have moved from their previous location in Surry Hills. Their new street address is:

Level 7, 133 Castlereagh Street, Sydney, NSW, 2000

Their new postal address is:

PO Box A5555, SYDNEY SOUTH NSW, 1235
FAX: (02) 9263 5568

The NFCRS 1800 number will remain the same and will sit with Jennifer’s direct line. Email addresses also remain the same.

Our new contact details are:

Jennifer Gracie
Coordinator
Phone:
1800 647 409 
(02) 9263 5561
0401 716 945
Email: jennifer.gracie@wesleymission.org.au

Lyn Brailey
Phone:
(02) 9263 5562
0401 478 270
Email: lynette.brailey@wesleymission.org.au

Wayne Warburton
Phone: (02) 9263 5536
Email: wayne.warburton@wesleymission.org.au

Merry Christmas from Jennifer, Lyn, Wayne, Richard and the Sharkwatch team

Jennifer, Wayne, Lyn, Richard and the Sharkwatch team would like to thank all of our readers for being a part of the Sharkwatch family in 2009 and wish you all a very merry Christmas. We hope that 2010 is a terrific year for all our readers, and we look forward to catching up with as many of you as possible in the new year.

Due to the difficulty of getting all four of us together with a camera, we have provided two images as above.

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Citibank Hardship System   

The following is a set of guidelines from the Citibank Hardship Cheat Sheet*. It sets out clearly what Citibank sees as hardship, what the eligibility criteria are, and who in Citibank to contact.

What is Hardship and Financial Difficulty?

• When a customer is unable to meet their payment obligations or pay their minimum Monthly Payments under a credit contract due to Illness, Unemployment, Over commitment and other reasonable reasons
  
• The customer still intends to honour their obligations to pay the account but is seeking a change to the credit contract in order to make the repayments more manageable to their current financial situation.

Citibank provides additional assistance to customers who are having this type of difficulty in paying their account(s).

What are Citibank’s Eligibility criteria?

Any Credit Card/Consumer Lending/Mortgage customer can ask for Financial Difficulty assistance provided;

• They have fallen ill or have become unemployed;
  
• They can provide another reasonable explanation for their claim
  
• There are no restrictions on age
  
• The account does not have to be overdue for payments or even over the credit limit
  
• There is no minimum balance requirement
  
• There is no minimum tenure of the account
  
• There is no restriction on the number of accounts a customer has.

Creditshield/Plus or Loan Protection Insurance

In case the customer has consumer credit insurance on their account, you can request for the claim forms to be sent across to the customer by contacting any of the numbers given below in the contact list.

Who can request for Hardship?

Primary Card Holders and Authorised Persons

• Based on your discussion with our Collections officer or CitiPhone Officer, a request will be sent for the Statement of Financial Position (Financial    Difficulty Application) to be mailed to the Primary Card Holder / Authorized person.
• It must be completed and returned to Citibank/Card Services within 15 days.
  
• This application will allow you to detail your client’s financial situation. You must provide all the relevant supporting documentation.
  
• Supporting documentation may include:

         - Medical Certificate
         - 3 months Rent Statements

Once Citibank receive your application and supporting documentation, a member of the Citibank Debt Management Solutions Team will contact you within 48 working hours to discuss your situation and possible solutions.

Please Note:

Please ensure that a relevant Letter of Authority has been sent across to Citibank in order to enable the Collection Officer or Citiphone officer to assist you.

The application will be declined by the Citibank Debt Management Solutions team if:

• No supporting documents have been sent.
  
• Completed application along with supporting documents not received within 15 days.
  
• A letter will be sent to the customer explaining the reason why it was declined.

Experiencing delays with responses / follow up?

Citibank Escalation Points

Please provide the following information with each enquiry to assist with investigation:

Customer Name
DOB
Citibank Account Number
Date/Time when experienced the lack of contact from Citibank

Below is a table of contact details for hardship requests. Please note that the numbers differ according to the status of the account and the source of the credit. If the account is not delinquent or over limit, and is not a CitiPhone account, you would call the numbers from the first section. If the account is over limit or delinquent, you would use the 2nd section. CitiPhone account holders would use the 3rd section.

Account Status	Telephone	Fax
Accounts requesting Hardship (please contact only if documents pertaining to hardship have been sent across)
For Citibank Credit Cards & Ready Credit, Personal Loans and CitiFinancial loans	1300662030	82255139 82255074
For Citibank, Mortgage accounts including Mortgagee in Possession	82253316	82255070 1300550217
For Bank Of Queensland Credit card Accounts	1300441287	82255139 82255074
For SunCorp Personal Credit Cards	1300220562	82255139 82255074
Accounts that are Over their credit limit or delinquent (Collections Team)
For Citibank Credit Cards & Ready Credit, Personal Loans and CitiFinancial loans	1300369797	82255070 82255069 1300550218
For Citibank, Mortgage accounts including Mortgagee in Possession	1300300470	82255070 1300550217
For Bank Of Queensland Credit card Accounts	1300440218	1300440685
For SunCorp Personal Credit Cards	1300221410	1300440685
Accounts that are not delinquent (CitiPhone)
For Citibank Credit Cards & Ready Credit, Personal Loans and CitiFinancial loans , Mortgage Accounts	132484	Not Applicable
For Bank Of Queensland Credit card Accounts	1300557272	Not Applicable
For SunCorp Personal Credit Cards	131155	Not Applicable

*© 2009 by Citigroup Pty Ltd

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The Law Matters   

Richard Brading, Principal Solicitor, Wesley Community Legal Service

When is a Centrelink Payment Protected From a Garnishee or Attachment Order?

The law sometimes punishes the prudent and rewards the spendthrift. This is the case with Centrelink payments.

Garnishment by creditors

A judgment creditor cannot garnish a person’s Social Security directly from Centrelink. Section 60 of the Social Security (Administration) Act 1999 states that “a social security payment is absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution,  bankruptcy or otherwise”. 

But what happens when that lovely Centrelink money passes into a client’s bank account, and sits there, waiting to be spent?  It is no longer a social security payment but something else. Can a crafty judgment creditor drop a garnishee on the bank and swoop up the money before it is spent?

Well, it depends on the debtor. A person who withdraws the whole of their Centrelink benefit each fortnight so there is nothing left is protected from the garnishee. But someone who manages to save some of their Centrelink benefit is at risk of losing their savings.

Section 62 of the Social Security (Administration) Act 1999 offers this formula to financial institutions that receive garnishees:

Step 1. Work out the total amount payable to the person in  respect of the social security payment that has been paid to the credit of the account during the 4 week period immediately before the court order came into force.

Step 2. Subtract from that amount the total amount withdrawn from the account during the same 4 week period: the result is the saved amount.

The “saved amount” is then sent to the creditor that served the garnishee on the financial institution along with any money that has been in the account for more than the 4 weeks. 

So if the person had $800 deposited into their account by Centrelink, but only $700 is withdrawn during the 4 weeks prior to the arrival of the garnishee, then the financial institution will send the difference of $100 to the creditor.  This will be the case even if the garnishee arrives immediately after the fortnightly Centrelink  payment of $400 has just been deposited into the     account.

Unfortunately, a client may have saved a few hundred or even thousand dollars towards a major expense. The garnishee will get all the person’s savings, plus the saved amount, even though the savings originally came from Centrelink income.

The moral of the story is that debtors on Centrelink who anticipate a garnishee should ensure that they withdraw their benefit in full each 4 week period and might prefer to keep their savings under their pillows.  This is particularly the case where the debtor’s income is paid into an account which is jointly held with their spouse or partner. The spouse or partner is at risk of losing their savings as well.

Deduction by Centrelink and Child Support

There are other exceptions. Where a debt is owed to a Commonwealth Government agency such as Centrelink or Child Support, then those entities can deduct money directly from the Centrelink payment. There is no statutory rate prescribed for Centrelink. It may be necessary to negotiate with Centrelink to establish a rate of deduction that still allows the client enough money to survive.  The lowest rate of deduction we have heard of is $15 per fortnight, but there may be exceptional circumstances when Centrelink agrees to deduct even less.

In addition, the Child Support Agency can deduct an amount between $1 and $6.14 per week from the Centrelink payment (regulation 5E Child Support (Registration and Collection) Regulation 1998.

Australian Taxation Office

The ATO has a garnishee power under ss. 260-5 of Schedule 1 to the Taxation Administration Act and can require a financial institution to pay money it holds for a tax debtor without having to get a court order first.

The ATO Receivables Policy Chapter 12 Garnishee states that the ATO will not garnishee Centrelink payments unless requested to do so by the tax debtor. However, the ATO could garnish a bank account with funds in it, even if those funds represent saved Centrelink income. In considering whether to issue a garnishee notice, the ATO will have regard to “the financial position of the debtor” and “the likely implications of issuing a notice on a debtor’s ability to provide for a family or to maintain the viability of a business.”  So if a debtor’s bank account is cleaned out by an ATO garnishee, the debtor has the right to ask the ATO nicely to withdraw or vary the requirements of the garnishee notice to allow the debtor to pay ordinary living expenses.

Deduction by the financial institution

There is also the situation when the client’s account is overdrawn by accident as a result of a bank error. The bank’s “Centrelink Code” provides that if a debt arises when the client unintentionally overdraws their account, then the financial institution is permitted to take 10% of each Centrelink payment to reduce the overdrawn account. The client is entitled to 90% of their Centrelink payment even if their account is in the red.

Claim by bankruptcy trustee

Once a person becomes bankrupt, a financial institution such as a bank or credit union is required by section 125 Bankruptcy Act to notify the bankrupt’s trustee of the existence of the person’s account. The financial institution is prohibited from making payments out of the account otherwise than in accordance with the written instructions of the trustee. If the financial institution does not receive written instructions from the trustee within 1 month, then the financial institution can unfreeze the account and release the money to the bankrupt.

Until recently, few financial institutions knew about s.125 or took much notice of it.  But now private bankruptcy trustees are increasingly writing to these financial institutions and demanding the entire balance of the bankrupt’s savings as at the date of bankruptcy. This is perfectly legal, because title to savings passes to the trustee at the moment a person becomes bankrupt.

Obviously, the loss of one’s savings can cause significant financial hardship to a person who was expecting to use the money for essentials such as paying the rent, buying food and transport costs. 

Official Trustee’s Practice Statement

Not all bankruptcy trustees are the same.  One reason why a bankrupt is better off having their estate administered by ITSA is contained in Official Trustee Practice Statement No.2, “Application of Section 125 of the Bankruptcy Act 1966 where Estate is Administered by the Official Trustee”. This document explains the policy of the Official Trustee for estates administered by ITSA, which is:

• Where the balance of a bankrupt’s account is less than $2000 at the time the financial institution is notified of the bankruptcy by the Official Trustee then the financial institution is not required to freeze the bankrupt’s account;
  
• Should the balance subsequently exceed $2000, either during or after the one-month period stipulated in section 125, the financial institution is not required to tell ITSA, unless ITSA advises otherwise;
  

However, if an amount of money well in excess of $2,000 is deposited into the account, the financial institution is encouraged to notify ITSA so they can notify ITSA who may claim it.

Note that this policy only applies to bankrupt estates administered by the Official Trustee. Some private trustees may have voluntarily adopted this policy, but others will want every last dollar from the bankrupt’s account. 

Suggested approach

There is no certainty about whether a person who files a debtor’s petition will have their estate administered by the Official Trustee or a private trustee.  There is a risk that an estate administered by a private trustee will be frozen for a month and the entire balance taken. One solution is for the debtor to withdraw the complete balance of the account immediately prior to filing their debtor’s petition and use the money to fill up the tank with petrol, pay the rent or fill up the cupboard with food. Not surprisingly, few debtors have difficulty doing this.

In the event that there is some money in the account at the time it is frozen by the financial institution, then the bankrupt can argue pursuant to s.60 Social Security Act that they had a pattern of withdrawing all their Centrelink payments within each 4 week period and therefore the money is protected. 

Another approach is to explain the bankrupt’s situation to the trustee and ask them to release sufficient money to the bankrupt to enable them to pay their essential living costs. In the event that a trustee is unreasonable, then the bankrupt has the right to complain to the Inspector-General in Bankruptcy (see ITSA website for contact details) who has the responsibility for regulating bankruptcy trustees.

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Remembering Jan Pentland   

Fiona Guthrie, CEO, AFCCRA

The death of Jan Pentland in August 2009 touched many of us. An almost universal response was: how can we remember her, how do we build on her legacy?

Since then, a number of remarkable things have happened, all of which help in answering those questions.

First, Jan was the posthumous winner of the Tim McCoy award. This prestigious award is given annually to recognise the outstanding contribution of an organisation or person working in the community law or legal aid sector in Victoria. Jan was nominated for her lifetime achievements –in increasing funding for financial counselling, building the peak body, linking financial counsellors with community lawyers, promoting Indigenous financial counselling, her leadership roles as chair of the Consumer Credit Legal Service and then the Consumer Action Law Centre and so on. 

Her nomination was also based on her long standing advocacy to reform bankruptcy law, particularly to stop creditors using bankruptcy as a debt collection tool for debts as small as $2,000. Recent changes to the law announced by the Attorney-General would have been warmly welcomed by Jan (see elsewhere in Sharkwatch for an update on the proposed changes).

Second, the Financial and Consumer Rights Council are establishing an annual award to honour Jan. The award will be given to a financial counsellor who has excelled in service to their community, over and above their normal work.

Third, a Jan Pentland Foundation is being set up as a long lasting memorial for Jan. The Foundation will bestow an annual scholarship to assist a person to study to become a financial counsellor (or for study in a   related area). The scholarship may also cover additional costs including travel and accommodation. The award will be announced at a dinner to coincide with the AFCCRA Conference in July 2010. The Foundation itself was launched at a function in Melbourne in November. Gifts to the Foundation will be tax deductible.

The trustees of the Foundation are: Carolyn Bond (Consumer Action Law Centre), Colin Neave (Financial Ombudsman Service), David Morawetz (Jan’s partner), Delia Rickard (Australian Securities and Investments Commission) and David Tennant (ACT Legal Aid and former AFCCRA Chair). Administrative support is being provided by AFCCRA. We will provide updates about the Foundation in future editions of Sharkwatch.

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Best Story Entry   

I have 2 delightful clients - a couple with whom I am forming a life long acquaintance i.e., I know I will be seeing them regularly for many years about many different issues.

Most recently, they were unfortunately involved in a car accident. They believe they are not to blame. It had been a long interview so I asked them to write to me about what had happened so I could then discuss the matter with the Insurance Co. who weren't too keen about paying out any money. Imagine my excitement at receiving the following:

"Dear *******
I am attaching 2 copies of my version of events. Please use your professional opinion as to which to use ..."

I was further thrilled when both versions began: "I swear to tell the truth and nothing but the truth."

I love my job! If I win the competition could I also have chocolates or jelly beans? [name withheld]

[Eds: We love this story—you can have both]

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AFCCRA’s New Executive Director: Fiona Guthrie   

Wayne  has asked me to write a few words of introduction about myself for Sharkwatch readers.

Of course many of you will know me already – I have been involved with financial counselling and the consumer movement for well over 20 years. As I wrote in my application for this job:

“I worked as a voluntary financial counsellor at Caxton Legal Centre in Brisbane in 1987. What I experienced then effectively changed the direction of my life. I saw people, good people, who couldn’t pay their debts ... I also saw appalling examples of inappropriate debt collection practices. It was clear to me that the system needed to change. I have been involved in consumer advocacy, mainly on a voluntary basis, ever since.”

My voluntary work sometimes flowed into my paid work, much of which had a social justice focus. For almost 15 years, I was self employed working as a management consultant. I specialised in workshop facilitation, community consultation and program evaluation, working with clients in the government, community and private sectors.

I’ve had some interesting projects over that time. For example, in the past 12 months I was involved in a review of a new legal service for older people, the hardship program of a major bank (together with Peter Gartlan, a Victorian financial counsellor), helped QCOSS organise their biennial conference and     facilitated workshops for electricity advocates, the Footscray Community Legal Centre, QCOSS, the Qld Department of Housing, BreastScreen, AGL, ATSI groups and numerous others.

In my voluntary life, I continue to be involved with the Consumers’ Federation of Australia and maintain my links with the Financial Counsellors’ Association of Queensland.  I was a member of the Commonwealth Consumer Affairs Advisory Council for six years, and chaired ASIC’s Consumer Advisory Panel for two years.  I was a member of the board of the Insurance Ombudsman Service, the Banking and Financial Ombudsman Service and then the Financial Ombudsman Service. And I am very proud to have helped set up the Centre for Credit, Commercial and Consumer Law which is now located at the Queensland University of Technology.

Joining AFCCRA is a natural progression for me, providing an opportunity to work with wonderful people, undertake meaningful work and make a      difference. The profession is at a cross roads in so many ways, and we have a chance to put it on a firm footing for the future. And there are so many policy and law reform issues for us to address …

I have lived in Brisbane for over 20 years and our three children, now 23, 21 and 19 were all born here. As I write this, they all still live at home, but I live in hope. The AFCCRA office is co-located with QCOSS here in Brisbane. With the internet and air travel being what it is, location is less important than it was 15 years ago, when all of the peak bodies made their homes in sunny Canberra. Instead, I will be travelling when needed. It is absolutely critical to the success of this role, that I stay in touch with financial counsellors and understand the issues you face.

To complete the picture: I have a Bachelor of Arts (Psychology), a Master of Business Administration (specialising in finance) and am into my third year, part time, of a law degree. In my spare time, I play basketball and jog in a very slow way around the local park with the dog (sometimes mistaken I expect for a fast walk).

Finally thank you for the warm welcome to AFCCRA I have universally received. It is an absolute privilege to be working with you all. Please feel free to ring me at any time.

Fiona Guthrie

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AFCCRA Update   

Fiona Guthrie, CEO AFCCRA

AFCCRA Future Directions

AFCCRA Council met in Brisbane in early November over two days to undertake some strategic planning. This was a very productive meeting. The draft strategic plan will be distributed to financial counsellors shortly, seeking comments and then finalised.

Council also discussed a number of other matters: the financial counselling units in the Diploma, the Financial Counselling Foundation, engaging with the states, the FaHCSIA contract, our Reconciliation Action Plan, stakeholder feedback, council meetings, financial and administrative issues and a myriad others.

Council also discussed how it will work together. Our ground rules include (in summary): respect, honesty, consultation, giving everyone a say and everyone having a responsibility to put their view, making new members feel welcome and support for Council decisions.

The AGM was also held. The Chair of AFCCRA for the coming 12 months is Carmel Franklin (ACT), the Vice-Chair is Gerry Philips (SA), the Treasurer is Phil Powell (Tasmania) and the Secretary is Saskia ten Dam (Qld). Council members are: Serena Staines (NT), Marianne Mayer (WA), Lyn Brailey (NSW). The Victorian position is currently vacant, but is being filled for the time being by Richard Foster the CEO of the FCRC.

Child Support Agency

AFCCRA, in conjunction with State Associations, has partnered with the Child Support Agency to arrange meetings with financial counsellors across the country over the past couple of months. The CSA was keen to understand how they could work more effectively with financial counsellors as well as learn more about CSA clients who were accessing the services of financial counsellors.

This project has been very positive. As a result, the CSA is to trial a dedicated hotline for financial counsellors so that they can quickly get the  information they need, via a single point of contact. The trial will begin in Queensland, and then we hope, extend to all states shortly.

AFCCRA will also be involved in an ongoing basis in providing feedback to the CSA about its publications, website and other communications. The CSA will also be attending state and national conferences in future. We will also be exploring opportunities for mutual training, that is CSA staff training financial counsellors and financial counsellors providing training to the CSA.

Helping Indigenous Workers

AFCCRA has established an email ‘chat’ group for Indigenous financial counsellors and money management strategy workers as a way of sharing  information and staying in touch with each other. In the longer term, we hope we can use this avenue of communication to more quickly identify casework issues in remote areas.

Already the group is proving useful in improving communication. For example, we were recently able to organise a phone link with the Financial Ombudsman Service so that their staff could explain the new approach they are taking in dealing with customers in financial difficulty. This presentation had been given in all the capital cities, but those caseworkers working in Indigenous specific programs would have missed out.

Reconciliation Action Plan

AFCCRA was one of the first organisations in Australia to have a Reconciliation Action Plan (you can find it on the AFCCRA website). In a lovely gesture recently, the Essendon Football Club wrote to AFCCRA (Jan Pentland) enclosing their RAP. The football club is the first AFL club to develop a RAP and they thought it important to share this with other organisations that have done the same. You don’t have to be an Essendon supporter to appreciate this gesture!

Bankruptcy

‘If you want to kill an idea’, wrote Charles Kettering many years ago, ‘get a committee working on it’.

This is pretty much what we fear may happen to the Bankruptcy Law Amendment Bill 2009 – it has been referred to a Senate Committee. Some industry players have been vociferous in their opposition to the proposed amendment to the Bankruptcy Act that will increase the threshold for a creditor’s petition from $2,000 to $10,000. Financial counsellors are strong supporters of such a change, having seen the threat of bankruptcy too often misused by creditors.   

AFCCRA Update continued

We also strongly support the other major reform, to increase the stay period that follows the declaration of intent to file a debtor’s petition from seven days to 28 days.

AFCCRA has written a submission to the Senate Committee inquiry. Sincere thanks to a number of financial counsellors who either provided ideas or case studies for the submission: Lee-Ann Read, Gianna Marzi, Kathleen Hosie, Lisa Garlick, Donna Letchford, Ann Enright, Ian Liddell and Steve Snelgrove. We could not have put the submission together without you.

AFCCRA’s commitment to bankruptcy reform is long standing. It has a particular resonance at this time as it was one of the policy areas about which Jan was most passionate. She would want us to fight hard to keep the proposed changes.

Financial Ombudsman Service Terms of Reference

The new FOS Terms of Reference start on 1 January 2010. As you will have learnt from FOS presentations around the state, from that date you can lodge disputes with FOS about hardship and appropriate repayment arrangements.

There has been some further consultation about the final form of the Terms of Reference, organised by ASIC. Thank you to Diane Hayes in WA for her participation in a phone conference with ASIC and others to discuss the new Terms of Reference and their finer detail.

Transfer of Credit from the States to the Commonwealth

The new National Credit Code comes into effect on 1 July 2010. ASIC will be conducing training for financial counsellors early in 2010 to bring us up to speed on what the new laws will mean.

AFCCRA is also involved in this issue in a number of other ways.

• We are very concerned about the potential for loss of state funding to consumer credit legal services around Australia, once the Commonwealth assumes sole responsibility for credit. Financial counsellors work very closely with credit lawyers in these legal services. We are involved with a group of organisations, coordinated by National Legal Aid, that is working to retain current funding and ensure there is adequate funding in the future. For example, some states such as South Australia, have very limited access to consumer credit lawyers at all. Various meetings have been held or are planned with Ministers, regulators and bureaucrats. This group is also looking at what community information would be useful about the new laws.
• We have written submissions on some of ASIC’s consultation papers seeking feedback about how it will administer the new laws.
• AFCCRA remains concerned about some of the omissions and weaknesses in the laws, such as those surrounding leases and the exemption for licensing from point-of-sale retailers. It is also unclear how the new Federal court jurisdiction will operate.
• The campaign for an interest rate cap in the National Credit Code progresses. This issue is to be considered in Phase 2 of the transfer of credit.

In the meantime, Queensland, New South Wales and the ACT retain their caps (interest is capped at 48%, including fees and charges). In early   

November a number of people interested in this issue met in Sydney to explore it in more depth. The main issue is that these high cost loans don’t solve financial difficulties for consumers – they exacerbate them. Financial counsellors often see clients who are victims of payday lenders. Workshop participants believe it is highly unlikely that responsible lending obligations will solve this debt spiral. People attending the workshop developed a number of options for progressing this campaign.

Credit Reporting

The Government has now announced its response to the Australian Law Reform Commission’s report into Australia’s privacy laws. One of the most important changes will be to the way the credit reporting framework operates.  Once the new legislation is in place (some time in 2010), an individual’s credit report will also include information about the accounts they hold (type of account, when opened, closed and current limit) as well as repayment history (including the number of repayment cycles an individual was in arrears in the past two years).

There are a number of implementation questions about these changes, particularly in relation to repayment history information.

For example, what will constitute a ‘missed payment’, some disputes about listings will be urgent – will there be processes for these to be fast-tracked, how will applications for hardship (where payments will be ‘missed’), impact on this information and so on?

Thanks to Maria Hatch in New South Wales for her participation in a teleconference with other consumer advocates and representatives of government to talk about this issue recently. We won’t know the answers to any of the questions above until we see the draft legislation/code/regulations.

Access to Services and Mobile Phones

More and more Australians rely solely on mobile phones for their telephone service. Financial counsellors also note that more of their clients are using pre-paid services for obvious reasons. However, this means that toll free numbers – 1300, 1800 – are actually not free. There are stories of consumers being left in long telephone queues waiting to get through to organisations such as the ATO, bank hardship teams and EDR schemes and/or not being offered the courtesy of the service calling them back on their mobile.

This is clearly an access issue, applying broadly across industry (and also in the community sector which also operates telephone hot lines). At a minimum, organisations need to offer to call consumers back on their mobile phones and allow for other call back mechanisms, such as through SMS or MMS. Ideally, calls from mobile phones should be free, if certain numbers were used. We are exploring this issue with other consumer groups, including the Australian Consumer Communications Action Network, to see what can be done.

Hardship

Hardship is a major issue in a number of industries – banks, utilities and telcos. AFCCRA is about to start running some campaigns in this area. Financial counsellors will hear about this separately. We want to see genuine understanding of what hardship is, improved access and more flexible options.

AFCCRA Committee Representatives

Bankruptcy Reform Consultative Committee	Lyn Brailey  Lynette.Brailey@wesleymission.org.au
ASIC Consumer Advisory Panel	Tricia Ross  tricia.ross@ican.org.au
ATO Personal Tax Advisory Group	Gerry Philips  geraldine.phillips@dfc.sa.gov.au
ACCC Consumer Consultative Committee	Fiona Guthrie  fiona.guthrie@afccra.org
Telstra Consumer Consultative Council	Marianne Mayer  mariannem@fcrp.org.au
Centrepay	Tricia Ross  tricia.ross@ican.org.au
Optus Consumer Liaison Forum	David Lawson  davlaw@bigpond.com
Community Response Taskforce	Fiona Guthrie  fiona.guthrie@afccra.org
ACCAN Standing Committee on Consumer Affairs	David Lawson  davlaw@bigpond.com

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Round Up   

South Australia

SAFCA Conference 2009

South Australia Financial Counsellors’ Association held their Biennial Conference Monday 14th September and Tuesday 25th September, 2009.

Attendee came from Northern Territory, New south Wales and Queensland, AFCCRA”S Fiona Guthrie Executive Director.

The conference theme “Knowledge, Experience, Community: Financial Counselling in the Global Economic Crisis” This covered a large range of  interesting topics and guest speakers, from Ms Karen Grogan “Poverty – Survive of Thrive” to a variety of  Financial Literary being presented by Financial counsellors’ in the community Ms Serena Staines – Somerville Darwin, Ms Denise Darling and Mr Dennis Murton, Adelaide and Ms Karen Lynch Anglicare.

It was a very informative and well presented Conference. I look forward to 2011 conference, and being able to meet and network with CFC counsellors.

Lyn Brailey

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In the Media   

Financial stress for families on the rise

Original story by Ruth Pollard

Stable unemployment figures and wafer-thin economic growth are masking an unfolding story of mortgage stress, rental problems and homelessness as the real impact of the downturn bites.

Financial counsellors say in the past 12 months their client base has shifted significantly from mostly long-term unemployed to those who, after a lifetime of employment, are out of a job and struggling to pay their mortgage or worse, feed their family.

The shift has been profound. The number of clients who are employed but in financial stress has increased by 36 per cent in the past six months, while mortgage stress has risen by 60 per cent, said Sherrie Wilkins, a financial counsellor at the Far West Credit Counselling Service in Broken Hill.

''Their cases are much more difficult to manage,'' she says. ''They have massive utility bills, credit card bills and other debts - I have got clients who are suicidal, clients who are depressed and on medication, who have already lost their house, or worried they will lose their house.''

Ms Wilkins has seen parents go without food to feed their children - telling them they are on a diet rather than admitting that even buying groceries is a struggle - and people driving in unregistered cars, too broke to afford the fee but unable to get to job interviews any other way.

Bureau of Statistics figures released last week show unemployment had remained stable at 5.8 per cent, yet that still represented a net loss of 27,000 full-time jobs and a continued fall in the number of hours worked, said the chief executive of the Australian Council of Social Service, Clare Martin ''Applications for unemployment benefits rose by 40 per cent from May 2008 to May 2009,'' Ms Martin said. The new group doing it tough are those who have never lost their jobs, then suddenly find themselves out of work and in mortgage stress. Ms Martin said that after the last recession, 200,000 people never returned to the workforce. ''We cannot afford to have that happen this time.''

“A financial counsellor at Wesley Counselling Services in Penrith, Sandra Burke, has seen an increasing people in dire straits over the past year. Her service has employed an extra two financial counsellors to keep up with demand. ''We are seeing families trying to survive on $50 to $100 per fortnight once they have paid the rent - that's how grim it is.'' Such is the concern about the rising number of houses being  repossessed by banks - there has been 3260 in the first six months of this year in NSW- Legal Aid NSW and the Consumer Credit Legal Centre have established a mortgage stress service two days a week at the NSW Supreme Court.

''There is no question there has been a significant increase in the number of people in need of assistance,'' said Dave McMillan, a solicitor with Legal Aid. ''People have major problems and yet they somehow go through the process without getting legal assistance or advice - we will be there when the court is sitting and we hope that is going to assist people who otherwise wouldn't get that help.'' The scheme aims to provide people with advice on how to get more time to either refinance their mortgage or sell their house, help with their defence and deal with the court processes associated with possession, said a solicitor with the Consumer Credit Legal Centre, Alexandra Kelly.”

Sydney Morning Herald, September 21, 2009

Gambler’s bid to reclaim $35m in losses fails

The Herald Sun reports that the Supreme Court bid by ‘addicted gambler’ Harry Kakavas to reclaim $35 million in losses, accrued over an ‘18 month gambling  spree’ at Crown Casino in Melbourne, has failed. Kakavas claimed that Crown senior staff “lured him back to Melbourne with cash gifts and the use of a private jet”. Justice David Harper, noted that “Crown does not present itself as a world leader in responsible gambling. Its relationship with Mr Kakavas does not give one any confidence it deserves that status,” but also found that “the fact that Crown was seriously careless does not, however, constitute a basis for any of the claims made by Mr Kakavas”.

Herald Sun, December 11, 2009 

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