Sector articles of interest - 2 December

Written on the 2 December 2020 by SAFCA

• FCA Weekly Digest
• Telstra admits to unconscionable conduct
• Payday loans and high-cost leases
   

FCA Weekly Digest 23 27 November

Introduction: Monday 23 - Friday 27 November

Welcome to the seventh edition of our Weekly Digest, to keep you across recent news and website/toolkit updates.

We decided we should offer an alternative to the Facebook group, as not everyone is engaged via that platform. The Facebook group will remain active and this newsletter reflects the posts we make each week.

Looking for a different Weekly Digest? You can find all our previous versions on the Weekly Digest Toolkit page.

Changes to Toolkit and Website Resources

Financial Counselling Australia Toolkit

New guide about assisting Westpac customers - see post below for more details.

News and Updates

Posted on Facebook Toolkit Group throughout the week.

EAP Newsletter: Supporting Working Parents

As part of our Employee Assistance Program (EAP) package for the sector, we receive weekly emails with wellbeing tips that refer to resources on ACCESS EAP's portal, which all financial counsellors can access.

This week, the newsletter focusses on supporting the mental health of working parents or caregivers and the children they care for.

This tools included provide practical ways for leaders to support working parents and for parents to help their children, particularly teens as many of the nation's 17-18 year-olds face their final exams.

Visit the FCA Toolkit www.toolkit.org.au to see the full newsletter and resources.

We Welcome the Government's Commitment to a More Secure Future for Our Sector

We have welcomed the Federal Government's response to last year's review of the coordination and funding for financial counselling services across Australia.

The review, called the Countervailing Power: Review of the coordination and funding for financial counselling services across Australia, made a series of recommendations to ensure the sector's long-term viability.

The Government has supported the review's recommendation to increase funding through contributions from industry.

Read the full media release in the SAFCA Newsletter lead story this week.

Please Sign the Open Letter to Save Safe Lending

If you'd like to save safe lending, please sign the open letter that was launched yesterday. It urges Senators to block the proposed weakening of safe lending laws.

Financial counsellors supporting this letter sends a strong message. As you work with people facing hardship every day, your perceptions are highly regarded. We'd really appreciate your support.

11,986 people have already joined 125 charities, social services, unions and consumer groups, plus dozens of academics, experts, financial counsellors and high profile Australians in signing the letter.

It's supported by new national polling that shows that Australians expect lenders to check if credit is unaffordable. 79% of people think that banks should be required to always check a customer's ability to repay before offering a mortgage (only 4% disagree).

Click here to sign the open letter.

Guide for Helping Westpac Customers

The latest guide for financial counsellors helping Westpac customers has been released (2 page, easy to read PDF with clear tables).

It's for financial counsellors only and should not be shared with clients. It shows Westpac's options for home loan, credit card and personal loan customers in financial difficulty.

There are new options including a program to help with urgent assistance, e.g. food vouchers and emergency accommodation, which aim to provide "unexpected and thoughtful gestures for our customers when they need it most."

It's worth having a look. There are also new offerings in light of COVID-19.

The guide is available on the Toolkit portal.

Update on Saving Safe Lending

The Save Safe Lending campaign has officially launched and we invite you to join with us to protect Australia's safe lending laws.

Click here to see a video update on the campaign from Fiona Guthrie.

You may have seen the release of an open letter in the media, signed by over 120 organisations and high-profile individuals, calling on Parliamentarians to stop the Federal Government's proposed changes.

Financial counsellors have a powerful role to play by sharing their experiences and advocating for safe lending online and in our communities.

Here are three ways you can get involved in the campaign:

• Share something on your social media tagging your local federal MP (see material on the website below).
• Write to your local MPs and Senators, to tell them about the harm of irresponsible lending and why our communities need these important protections.
• Sign the open letter of organisations and individuals calling on Parliamentarians to support these important protections.

Go to www.debtdisaster.com.au  to sign up to the campaign and to access resources to help you get involved.

122 Organisations Have Joined Together to Oppose the Axing of Safe Lending Laws

We're proud to announce the official launch of the Save Safe Lending Campaign, marked by the release of an open letter that over 120 organisations have signed onto.

Thank you for everything you've been doing to protect our responsible lending protections. The contribution of financial counsellors may have the power to win this campaign.

Sharing your experiences helps inform the community of what the impacts of scrapping responsible lending will be, and how families and individuals will be worse off.

Together, we can protect our communities from unsafe and irresponsible lending.

Let's stop the #DebtDisaster. For more details and ways to get involved, visit www.debtdisaster.com.au
 

Telstra admits to unconscionable conduct

Telstra has admitted to unconscionable conduct during its sales of mobile phone plans to Indigenous consumers and could face a penalty of up to $50 million.

The telco admitted it had breached Australian consumer law and today the Australian Competition and Consumer Commission (ACCC) announced it was instituting Federal Court proceedings against the company.

Today's announcement comes after an 18-month investigation by the ACCC, after serious concerns were raised by a number of financial counsellors in rural and remote areas.

Last year, financial counsellors told the ABC consumers were being sold unaffordable phone plans and were then aggressively pursued by debt collectors.

"Telstra has admitted it breached Australian Consumer Law and acted unconscionably when sales staff at five licensed Telstra-branded stores signed up 108 Indigenous consumers to multiple post-paid mobile contracts which they did not understand and could not afford between January 2016 to August 2018," the ACCC said in a statement.

The ACCC said Telstra had agreed to consent orders that would support a penalty totalling $50 million, but ultimately, it will be up to the court to decide how much Telstra should pay.

"This case exposes extremely serious conduct which exploited social, language, literacy and cultural vulnerabilities of these Indigenous consumers," ACCC chair Rod Sims said.

"Even though Telstra became increasingly aware of elements of the improper practices by sales staff at Telstra licensed stores over time, it failed to act quickly enough to stop it.

"These practices continued and caused further, serious and avoidable financial hardship to Indigenous consumers."

More to come.
 

Payday loans and high-cost leases

Private member's Bill addresses Government's 'half-baked' proposals on payday loans and high-cost leases

A private member's Bill introduced in Parliament today by Andrew Wilkie MP would, if passed, greatly reduce the harm that high-cost payday loans and consumer leases cause to thousands of Australians.

The National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2020 (the Bill) replicates draft legislation produced by Treasury in 2017, as well as numerous other bills introduced to Parliament since. The Bill would change the way these high cost credit products can be structured and sold, making them much fairer.

The Bill is based on recommendations made in a 2016 expert report commissioned by the Coalition Government (the SACC Report). Despite accepting the report's recommendations four years ago, they are yet to be enacted.

"The Treasurer recently announced the Government's intention to introduce a Bill that will not only water down these same protections, but remove vital responsible lending protections for other credit products," said Gerard Brody, CEO Consumer Action.

In contrast to the Government's plans, Mr Wilkie's Bill would:

Leave responsible lending obligations intact for other forms of credit

Introduce a more affordable cost cap on consumer leases consistent with the SACC Report's recommendations; and

Introduce protected earnings amount caps for both payday loans and consumer leases for all borrowers that would greatly reduce the risk of these products leaving Australians in a debt spiral.

"I congratulate Mr Wilkie for introducing this Bill. It replicates another Bill currently before the Senate, introduced by Senator McAllister and Senator Griff," said Mr Brody.

"It's clear there is real concern from many parliamentarians that laws need to be enacted to rein in harmful credit products like payday loans and consumer leases. We call on the Federal Government to allow either of these Bills to be enacted. Without this, people will continue to be charged far more than is reasonable for consumer leases, and repayments will continue to take away a larger portion of the income of vulnerable working Australians.

"The COVID-19 recession is causing financial stress for manywith other support being wound back, it would be a disaster if more people were pushed on to exploitative and high-cost credit to survive," said Mr Brody.