MyCRA Specialist Credit Repair Lawyers

Tag: bad credit

  • Save your pennies for a good cause…Buy Nothing New Month

    Wants and needs are two different things. But in the throes of spending – whether it be purchasing that new TV, or replacing your house with the latest furniture, the two concepts can be pretty difficult to separate. This thinking causes many of us to buy more than we can afford, and we find ourselves struggling to pay back credit. Too many runs of this, and we end up defaulting on our repayments and a Credit Provider somewhere penalises us with bad credit that takes 5 years to shake off. Education and awareness is the key to changing this kind of behaviour – which is natural in all of us. That’s why when we came across October’s “Buy Nothing New Month” – we thought it was a great idea. We hope it helps you.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Could you last the rest of the month without buying anything new? That’s the concept for “Buy Nothing New Month” which runs until the end of October. The idea is to only buy necessities, and say a big NO to every other shopping expedition which could see you parting with your hard earned money during October.

    Savingsguide.com.au ran a post on Tuesday on this topic ‘Buy Nothing New Month’ and we think it’s a terrific concept.

    Buy Nothing New Month (BNNM) was created by the Sacred Heart Mission in a bid to encourage mindfulness about spending habits. The official BNNM website for has a real edge to it – it seems aimed at changing the minds of young people and building a better future. Savingsguide.com.au’s Toria Phillips writes “isn’t it nice to see more people getting on board as it become more socially acceptable, heck maybe even cool, to be a saver?”

    Here’s more from BNNM about what the month is all about:

    Buy Nothing New Month is the global movement for collective, conscientious consumption.

    It’s a little idea, that started in Melbourne and is spreading to the Netherlands and USA.

    In 2011, Sydney Morning Herald ran a poll asking “is Buy Nothing New Month a good idea?” Over 10,000 voted. 82% said “yes”

    It’s a one month challenge to buy nothing new (with the exception of essentials like food, hygiene and medicines)

    Buy Nothing New Month isn’t Buy Nothing New Never. Nor is it about going without.

    It’s literally about taking one month off to really think, “Do I really need it?” If I do, “can I get it second-hand, borrow it or rent it? What are my alternatives? Can I borrow from a friend? Can I swap with my neighbor?”

    It’s about thinking where our stuff comes from (finite resources) and where it goes when we’re done (often landfill) and what are the fantastic alternatives out there to extend the life of our ‘stuff’.

    It’s easy. It’s fun. It’s moving from consumption-driven to community-driven.

    It’s good for us, our wallets and our planet.

    Hop on board!

    Don’t worry that the month is almost out – take the last week or two to give it a go – or maybe run it into November if you can. For tips on how to do it – visit the BNNM website’s How to Page.

    Back in September we wrote an article involving data from the Australian Bureau of Statistics which showed one in seven Australians spend more than they earn – ‘Are you spending more than you earn? You’re not alone.’ These are alarming figures and it makes me realise that not enough Australians understand the power of credit. It is a great concept, but as long as we make it work for us. We should use it to enhance our lives so that we can spend time with the ones we love, or to really improve our quality of life. Not make ourselves slaves to it. All it does is end up becoming a monkey on our back when we are living with bad credit history.

    This disease of consumerism also known as ‘Affluenza’ (when too much is never enough) is mentioned on the BNNM website, and it is an idea that some Australians have taken on board, and it has enabled them to change their ‘stinkin- thinkin’ about money.

    Is this you?

    “We all know this stuff but we forget. Or, more accurately, we choose to forget. We want what we want and we want it now. So, we cram that whining voice inside our head telling us to be frugal deep into our subconscious, buy the thing we like, and only release him later. Of course, by this stage it is invariably too late to undo the damage so we shrug our shoulders, say “oh well” and convince the whiny voice that we “forgot” and that it was really all beyond our control,” Savingsguide.com.au’s Toria Phillips muses.

    If so, put that little voice on loudspeaker! Change your stinkin thinkin – and take the ideas of Buy Nothing New This Month and apply them in your life. This won’t guarantee that you do not make the occasional bad choice, and it won’t guarantee that you aren’t a victim of credit rating errors which lead to bad credit history. But it gives you a good sporting chance of keeping a clear credit file and having the real financial independence that everyone deserves.

    For advice on how to restore your good name and have a clear credit file or help to dispute unfair credit listings, contact a Credit Repair Advisor on 1300 667 218 or visit our main site MyCRA Credit Rating Repairs for more information on what we do www.mycra.com.au.

    Image: Pixomar/ www.FreeDigitalPhotos.net

  • They’re ba-ack again! Fraudsters change tactics on Microsoft virus scam

    If you own a computer – or a telephone for that matter – you may be vulnerable to computer-related scam attempts. The old Microsoft virus scam may have been shut down, but a new one has popped up in its place. We look at the current computer cold call scam warning, what you should do if you are called by these scammers, and what the ramifications of falling for this scam could be for your financial identity and credit file.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Remember the scam going around where fraudsters were claiming to be from Microsoft and were cold calling in Australia to offer “technical support” to remotely assist in clearing viruses off home computers?

    First detected in 2010, the ‘Microsoft Phone Scam’ was clever, and caught out thousands. Callers knew the victim’s name and address. These fake security engineers were claiming to see problems with the victim’s computer and asking whether the victim had noticed their computer becoming slower recently.

    They went on to offer to take over the machine and fix the problems. The scammers were using legitimate remote access software, such as LogMeIn, TeamView and Ammyy.

    Scammers then requested money for this ‘service.’ On top of that, it put the victim’s personal and banking details at risk. It also gave the scammers remote access to their computer, which can potentially lead to infected computers and pilfering of personal information via keyloggers.

    Gizmodo’s recent article ‘Global Operation Sees Infamous ‘Microsoft’ Scammers Finally Taken Down [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Updated]’ explained the extent of the success of the scam prior to its takedown:

    Three years on from the first report into the ACMA about the Microsoft scammers, over 10,000 complaints have been recorded. The ACMA says that the worst point came two years ago, when every second complaint to the agency was about the Microsoft scammers. This was in 2011 — a year when scam activity had doubled on the previous period. 52 per cent of the 83,000 scam complaints the ACMA received in 2011 presented as phone scams. All in all, in that 12 months, Australians lost a total of $85.6 million to various scammers.

    Gizmodo reported international efforts from Australia, Canada and the United States brought down U.S. based scammers only a couple of weeks ago. The scammers became the first individuals to be caught in connection with the scam. They’ve had their assets frozen and they are presumably now awaiting a hearing over fraud charges.

    Not to be dismayed, scammers have obviously thought the gig was too lucrative to dismantle yet – and they have changed tactics – hitting those original victims with yet another scam. As if they hadn’t suffered enough!

    On Friday Stay Smart Online issued a warning that computer-related scams were doing the rounds again. It may be important for those who may have been targeted last time.

    “Following international efforts by agencies to close down the infamous ‘Microsoft imposter scam’, reported earlier this month, examples of scammers responding with new approaches have been noted.

    This includes scammers making follow up calls to previous targets of the original scam, offering apologies and refunds in response to the closing down of (fake) support they provided previously.

    Scammers may also claim to be from a foreign government, foreign law enforcement agency or bank, and offer to recover the money you initially lost, in return for a fee,” SSO notes in its warning.

    Your personal information in the wrong hands can lead to identity theft which threatens the health of your credit rating. Fraudsters can duplicate your identity and take out credit in your name – leaving you with debts you didn’t initiate and bad credit from outstanding accounts in your name.

    Think recovery would be easy? Think again!

    Clearing bad credit history is always difficult for individuals to undertake. Most enquiries will result in Creditors telling you that bad credit is there to stay for the term of the listing (usually 5 years). The only thing you can do to change that is to prove there is an inconsistency by demonstrating that the listing was put there unlawfully. An identity theft victim’s task is then to prove that they did not initiate the credit in the first place, but proof is not always easy to obtain – especially when you have no idea of exactly how the fraud occurred. Many people don’t know they are victims until they go to obtain credit and are refused because their credit file is riddled with defaults.

    So what should you do if you get a phone call from one of these guys? SSO gives this advice:

    Suspect: Don’t accept anything at face value. Don’t make a payment over the phone or online without first checking the details.

    Think: Recognise the signs. If you’re being pressured to act, disclose personal details or send money to a stranger, it’s almost certainly a scam. (Microsoft never makes unsolicited phone calls about its products.)

    Report: Act to report the scam. Tell SCAMwatch and help stop scammers in their tracks.

    Ignore: Never respond. Hang up or delete the SMS or email after reporting.

    If you have had your credit file destroyed by identity theft, and need help recovering your good name – contact a professional Credit Repair Advisor on 1300 667 218 or visit the MyCRA Credit Rating Repairs website www.mycra.com.au. Professional credit repair can offer you the best chance of being able to clear bad history from identity theft for good.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • It’s not credit for Christmas, says DnB

    Christmas credit may not be ‘on the cards’ for shoppers this year. Due to concern about financial security in Australia, it is predicted shoppers will continue to tighten their purse strings over the Christmas period, with less predicted to spend money on non-essential items and credit usage predicted to drop, according to credit reporting agency Dun & Bradstreet.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Findings from Dun & Bradstreet’s latest Consumer Credit Expectations Survey, which measures expectations for savings, credit usage, spending and debt performance during the December quarter 2012, show half of Australia’s households are less likely to spend on non-essentials in the coming months.

    The survey showed:

    • One in three (29%) are more inclined to save than they were 12 months ago.
    • 56 per cent of Australians are concerned about their personal financial situation.
    • 37 per cent of households less likely to use a credit card to pay for non-essential items over Christmas compared to the same period last year, while just 16 per cent plan to apply for a new credit product or limit increase.

    Dun & Bradstreet notes that the Reserve Bank’s decision to lower interest rates due to slower economic growth comes as households reduce debt and increase savings as a buffer against economic instability, including the risk of rising unemployment. The bank is now predicting more moderate and sustainable credit growth off the back of this trend in consumer behaviour.

    Dun & Bradstreet General Manager, Danielle Woods, says the conservative consumer outlook could have a significant negative impact on businesses reliant on the Christmas rush.

    “An increasing number of Australians are concerned about their financial security and this is weighing heavily on their plans for the Christmas period,” Ms Woods said.

    “Prioritising saving over non-essential spending is a positive for the balance sheets of Australian households and the Reserve Bank is certainly encouraging this behaviour, in light of uncertain employment conditions. However, it could have detrimental flow on effects for businesses that are looking to Christmas to drive an uplift in sales.”

    However DnB also says, while consumers are planning to avoid non-essential spending and non-essential credit usage during the Christmas period, a significant proportion will need to rely on existing lines of credit to cover the cost of living.

    Forty per cent of 35-49 year olds will use credit to cover expenses they couldn’t otherwise afford, up from 35 per cent during the December quarter 2011. In addition, 60 per cent of this demographic are expressing concern over their financial situation and one in three (35%) would last no longer than one month on their current savings without full-time employment.

    This survey reveals a similar sentiment from Australian Bureau of Statistics figures released in September this year, showing one in seven Australian households is spending more than it earns, as the working poor struggle with monster mortgages and surging power bills.

    “Nearly 8 per cent of the nation’s richest households were living on credit, the Australian Bureau of Statistics reported yesterday.

    Of the top 20 per cent of households earning the most money, 3 per cent could not afford to pay a gas, electricity or phone bill on time during 2009-10.

    Of the poorest 20 per cent of households, one in five could not pay their bills on time and one in four spent more than they earned”, it was revealed in news.com.au ‘Aussie strugglers living beyond means’.

    So it seems the trend is continuing that most people are batting down the hatches and reducing their spending in order to pay down debts – but there are sections of the community who are still struggling due to rising costs of living and over-commitment. This seems apparent regardless of income. So for those people, credit for Christmas may be a reality.

    Causes for over-commitment can be a simple inability to manage money – wanting more than they can afford. Or in some cases, over-commitment can be a gradual thing – sometimes caused by expensive credit as a result of bad credit history. There have been reports that possibly as many as 3,000,000 Australians are impacted by bad credit history.

    If someone lands with a bad credit rating, it can completely change their financial situation. The black marks placed there by creditors show up on the credit file for 5 years. Bad credit can limit choices and can perpetuate the debt cycle by leading people to choose loans with higher interest rates and more fees, so the struggle to make repayments can be even harder.

    If the person with bad credit history wants to try and start again with credit, it may be possible to wipe the slate clean  and remove bad credit history, particularly if it should not be there, or was incorrect in the first place.  If the credit file contains inconsistencies, that person may be a good candidate for credit repair.

    A credit repairer can work with creditors on behalf of the client to identify inconsistencies and negotiate to clear the credit file of those defaults, clear-outs, writs and Judgments which contain errors, are unjust or just should not be there. A clear credit rating would give them the financial freedom to use credit whenever they need to at competitive rates.

    For advice about credit repair contact a  Credit Repair Advisor on 1300 667 218 or visit MyCRA Credit Rating Repairs website www.mycra.com.au.

     

  • Less home owners in arrears, but those in default have reached historic numbers.

    It seems more of the Average Joe’s are able to meet their mortgage payments. The latest figures from Fitch ratings reveal that arrears numbers came down in the second quarter of 2012 and the predictions are that this will continue. This is great news overall for credit debt numbers in Australia. But on the downside, Fitch did say low doc loans and 90 day-plus arrears reached historic highs, and also warns that declining house prices mean recovery in the property market would be slow. We look at the Fitch report in more detail. We also look at why more people may be ‘losing it’ with their repayments into the bad credit zone, and what they could do about it.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    According to Australian Broker in the story ‘Fair dinkum: prime arrears decrease’, Fitch Ratings’ ‘Fair Dinkum’ mortgage performance report for Q2 was positive for mortgage delinquencies:

    “Delinquencies in the Australian prime RMBS sector decreased to 1.54%, from 1.6% in Q1.”

    Furthermore, the analyst expects arrears to continue to decrease in Q3 and Q4 due to recent RBA rate cuts.

    “Lower interest rates should result in improved affordability for existing borrowers and thus to lower arrears levels,” it [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Fitch] said.

    However, self-employed borrowers, low doc loans and the 90 day-plus areas continue to cause headaches, although Fitch was keen to stress levels still remain low compared to international markets, particularly the UK and US.

    “Delinquencies in the low-doc segment tend to be two, or two-and-a-half times [higher than] those of full-doc loans, but in the 12 months to end-June 2012 they were four-and-a-half times higher,” it said.

    It did warn declining house prices remain a threat to the property market overall.

    “A significant drop in house prices could negatively affect transactions, in terms of recovery rates and time,” it said.

    “As house prices fall, eventual sales prices are more likely to be below the mortgage balance, leading to losses and claims under lenders’ mortgage insurance (LMI).”

    For those many Australians looking to make their home loan more affordable and meet the repayment deadline every time, the recent interest rate cuts (and more if passed on!) should go a long way to help.

    But it seems the numbers of those who are in arrears far enough to cop a default on their credit file – those in crisis mode with 90-days or more owing on their mortgage – are at a record high. What is happening to lead more groups of people in to crisis mode? Job losses? Over-commitment? Irresponsible lending in the past? Illnesses?

    It could be all of those things or just one which leaves a home owner in dire straits with their mortgage.

    What happens to those people that reach 90 days in arrears?

    Hopefully that situation never happens to you. But if it does, what would you do?

    If you’re smart, you’ll apply for financial hardship with your bank as soon as you find out you are having difficulty making payments. They may be able to restructure your repayments to more affordable levels temporarily until your financial crisis is averted. They may also be able to put a halt on any defaults they were going to issue to your credit rating.

    If you can’t apply for financial hardship; aren’t approved for a variation in your repayments; or don’t know about your financial hardship options – then you will be defaulted.

    This means you will carry a black mark against your name for 5 years. This is irregardless of whether you have a windfall and are able to get up to date with your payments or even if you get ahead in the future.

    This black mark will mean you are virtually banned from mainstream credit for the term of the default. So credit cards, loans and even mobile phone plans are near to impossible to get. Unless, you go with a lender who is able to factor in the risk of lending to someone with ‘bad credit’, but understand, you will pay much more for this type of loan.

    On an average $300,000 home loan, you will pay over $15,000 extra in interest on a bad credit loan when compared with a mainstream lender. This is just over the first three years at 9% bad credit loan vs 7% standard loan. See our interest calculator to find out how much extra you’ll pay. Then there’s the other credit – credit card interest, payday loans – they’re all at higher rates.

    Imagine the cycle some people in this situation can get into. It’s a domino effect. More charges mean more difficulty making payments. Soon one default can then lead to another and another. Before people it they are filing for bankruptcy or having their homes repossessed.

    We are looking to educate consumers about three things to do with credit:

    1. If you can’t afford the credit, don’t get it. This sounds simple but is actually not easy to determine. Your best bet if you’re unsure what you can afford, is to seek some budgeting help. But don’t just hope for the best – because life happens – doesn’t it?

    2. If something happens and you can’t afford what you used to be able to afford – stick your hand up and ask for help with your Creditor as soon as possible.

    3. If you have bad credit, and you don’t think it should be there  – save yourself thousands and dispute it.

    Even if you’re just not sure, it would be worth getting your credit file and case assessed by a credit repairer to determine your suitability. For professional help with disputing your credit rating (which will give you the best chance of having your bad credit removed from your credit file completely) contact a Credit Repair Advisor on 1300 667 218 or visit our main website www.mycra.com.au.

    Image: graur razvan ionut/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • ID scanners in nightclubs are boosting the risk of ID theft says Privacy Commissioner

    Their purpose is to crack down on crimes of violence in pubs and clubs. But according to the Privacy Commissioner, an increasing number of complaints have been made to his office about the use of ID scanners in licensed venues. We look at what the issues are with ID scanners and whether your personal information is safe to hand over.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    It’s Friday night, you’re heading out to meet a group of friends in a nightclub. You head to the door, and are asked to hand over your ID to be scanned in to the venue’s ID scanner. Do you do it? Do you ask what’s happening with that information? Or do you merely let them whisk it through – knowing you’re not one of the troublemakers they’re looking for, and happily meet your friends in the club?

    Most young people would just hand over their ID, and this technology is being used in plenty of venues around Australia – with the intention of finding those holding fake ID cards, or those patrons who have been ‘banned’ or ‘flagged’ as unwanted.

    But many are calling for action over the use of identity scanners, because of the increase in risk of identity crime.

    Privacy Commissioner Timothy Pilgrim says there are a number of issues and risks associated with using ID scanning for this purpose.

    “If organisations are going to require to collect that information for reasons like that, it needs to be very clear at the point of entry that people will be asked for that information,” he told ABC’s World Today yesterday.

    “And people need to be told what will happen to that information once they hand it over. How is it going to be kept? Is it going to be kept securely? Is it going to be kept for a limited period of time, and who else may get access to it?

    “People have the right to know these things.”

    Mr Pilgrim says the use of ID scanners at pubs and clubs is increasing the risk of identity crime.

    “The more and more we’re being asked for information, the more and more it’s being stored in databases,” he said.

    “It leads to almost a honey pot sort of situation, where people who have malicious intent-criminal groups, for example, can see value in breaking into those systems.”

    The Privacy has been given new powers of penalty for businesses which breach privacy regulations, in the Privacy Amendments (Enhancing Privacy Protection) Bill 2012, which is currently before the Senate. This will include allowing him to penalise businesses which breach privacy regulations.

    “I would hope that organisations take the responsible step of putting in place proper protections for people’s personal information,” he said.

    “However, if there are serious and repeated breaches of the Act, I won’t hesitate to use the powers that I will have.”

    However, Victoria’s acting privacy commissioner, Dr Anthony Bendall, estimated more than 90 per cent of Australian businesses were not covered by the regulations in the Privacy Act because they had an annual turnover of less than $3 million.

    He says Privacy principles were unclear on businesses’ obligations if the information is compromised.

    ”If you do hold personal information and [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][it is] breached in some way you’re not required to notify people that’s happened, and if it’s something like your licence there’s a good reason you should be telling them and to be taking steps to helping patrons protect themselves,” he told The Age on Sunday.

    Here’s more from The Age story, ‘ID scans raise privacy fears’:

    ID scanner company Scannet gives venues the rights to their own databases, and allows them to share the photos – but not the licence details – of banned patrons with other venues.

    Scannet director Joel Sheehan said it had 45 systems operating in Australia since it began selling them last year.

    Mr Sheehan said machines were password protected, with patrons generally more willing to scan their licences at clubs and pubs now.

    ”Now people that aren’t troublemakers that want to go out and enjoy themselves are all for it,” he said. ”At the end of the day the system’s voluntary, they don’t have to have their ID scanned as a condition of entry but at the same time if somebody’s not going out to cause trouble they shouldn’t have any problems having their ID scanned.”

    He said ID scanners had had a deterrent effect in clubs and pubs, as venue owners could pass on records to police of violent customers. He credited the machines with improving the safety of nightlife in Newcastle, where the company launched…

    While the Scannet website says the machines can help venues ”forecasting future business”, Mr Sheehan said that it was up to venues to comply with the Privacy Act and avoid abusing customers’ details.

    Australian Privacy Foundation board member Dr Katina Michael, said ID scanners were not effective in detecting fake IDs or deterring violent behaviour but put the majority of people at risk of identity fraud.

    ”When you’re talking about private entry to pubs and clubs … they may turn personal information into ones and zeroes at the back end and these stored identities in the future can be stolen … How do you reclaim your identity?”

    Some important points have been made here.

    1. When we are told identity crime is on the rise and is fast being used as part of the ‘repertoire’ of criminals around the world – why should people be parting with personal information unnecessarily? Especially when that information is a direct copy of an identifying document?

    2. It’s not a matter of crime groups not having the capabilities to hack into these databases…but more that it is not worth it…yet.

    3. If a data breach did occur, would those small businesses using the scanner even be required to be subjected to the big stick of the Privacy Commissioner?

    So what could happen if someone misused your identity? Your name could be attached to criminal activities; fraudsters could request tax or Centrelink payments on your behalf, as well as taking out credit in your name.

    If you have credit taken out in your name, you will often unknowingly incur debts with Creditors issuing defaults against your name on your credit file. People could be chasing you for credit you didn’t initiate, and if you apply for credit in your own right – you will be refused. This will continue for 5 years while you have bad credit.  You will be locked out of mainstream loans, credit cards and even mobile phone plans. So it’s important to protect your good name and prevent bad credit through fraud.

    My advice? Think twice before you scan your ID in next time you’re clubbing. If it was me, I would say no, or go somewhere else 🙂 Because you do have something to hide, and that’s your personal information.

    For help recovering your good credit history following identity theft, contact MyCRA Credit Rating Repairs on 1300 667 218 or visit our main website www.mycra.com.au.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • Identity theft bust in Aussie news…and how to minimise your risk of ID theft

    A significant identity crime  saga has unfolded right here in Australia. We look at how $37.5 million was extracted from victims of credit card fraud. And we give you an idea of the important steps you can take to protect yourself and your credit file from fraud, identity theft and subsequent bad credit.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Federal Police have arrested and charged a Sydney couple for their role in what Police are calling the “most significant identity crime syndicate disruption” in Australia’s history.

    A 40-year-old Ryde man and a 48-year-old Ryde woman were arrested and charged on Thursday. This brings the total arrests since October 2011 to eight from what Police are describing as a highly sophisticated identity crime syndicate.

    “Police have now seized more than 15,000 false credit cards, with an estimated potential fraud value of $37.5 million. This includes 12,000 false credit cards seized in November 2011, which was the largest singular seizure of fake credit cards in Australian history. Major manufacturing equipment has also been seized throughout the investigation.

    The arrests come as a result of an Identity Security Strike Team (ISST) investigation which began in April 2011. The investigation focused on the activities of a Sydney based crime syndicate involved in the manufacture and supply of fraudulent identity documents and credit cards.

    The ISST is comprised of members from the Australian Federal Police (AFP), New South Wales Police Force, New South Wales Roads and Maritime Services and the Department of Immigration and Citizenship (DIAC),” AFP announced in a joint media release on Thursday.

    Police will allege that the couple was manufacturing fraudulent documents from their home to falsely obtain credit cards. They will appear in a Hornsby Court on October 25.

    These victims may now be facing defaults and other negative credit listings on their credit file. Thankfully, arrests have been made, names have been recovered and those people who did fall victim, may have a chance at recovering their good name.

    For those victims in similar but separate incidents, they may not be so lucky to have had their perpetrators arrested. Restoring their clean credit file in this situation can be a nightmare to say the least. First they have the debt owing, then to clear the credit listings from their credit file so they can borrow money again – they need to prove they didn’t initiate the credit in the first place.

    This can be tricky if they don’t know when or how the identity theft occurred, and don’t have a perpetrator. Some can be faced with 5 to 7 years of bad credit through no fault of their own.

    So prevention is really better than the cure. If you want to know how you might prevent this happening to you, check out the identity theft prevention tips put out by www.Savingsguide.com.au over the weekend. You never know, just one thing you do differently could see you preventing having your life turned upside down from bad credit due to identity theft.

    Prevent Identity Theft: 10 Steps

    Identity theft is an increasing risk in today’s hyper-technological world, and can have significant effects on our finances. While there are means to redress the problem, like all things, it’s better to prevent identity theft from occurring than to fix it after the fact. Here are ten ways to protect yourself, inspired by Reader’s Digest.

    #1: Cover Your Card
    It’s not being paranoid to cover your card when using it. In the days of mobile phones, it’s fairly easy to take a snap of card and use the digits later. It doesn’t take much to keep part of it covered.

    #2: Check Your Statements
    Often, an identity thief will take an initial, tiny amount out of your account to see if you’re checking it, then go in for the swoop a couple of days or weeks later. Check it once a week, and report anything you don’t recognise.

    #3: Get Bills Online
    There are protections against people seeing your bills online. Not so for people being able to nick them out of the letterbox.

    #4: Destroy Financial Items
    Recycling bins could be a treasure trove, so make sure your paper is well-shredded or, even better, good fodder for your next bonfire. Make sure your cards are seriously well cut up, and don’t chuck out half-filled loan applications without blacking out the details first.

    #5: Strange ATMs
    If the ATM looks different, or has an extra attachment on it, walk away and report it to the bank responsible.

    #6: Debit Cards
    Credit cards have fraud insurance, debit cards don’t. Be wary about where you are using the debit card, and stick to places you trust.

    #7: Consider A Photo
    Noticed that people at checkouts don’t even look at your signature? Scary isn’t it. Consider getting a credit card with your photo on it, it’s hard to miss and far harder to pass off as an identity thief.

    #8: Lock Your Mailbox
    New credit cards, debit cards and bills all come into your mailbox. It’s a simple thing to get a lock on it, and at least make it a sight harder for someone to steal the card and activate it.

    #9: Keep Smart Online
    Look for the SSL or TSSL padlocks whenever you’re entering any details, and don’t save financial data online. Quicker it may be, but far more exposed to identity theft. [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Ensure any financial transactions are made using a secure browser https rather than http.]

    #10: Passwords And Pins
    They’re almost impossible to remember, the plethora of pins and passwords we now need, but if you’re serious about protecting yourself from identity fraud, have several and change them often. Don’t keep your pin anywhere in your wallet, no matter how well-disguised. You can run into trouble with insurance should you have your pin close to your card and are a victim of identity theft.

    If you have run into trouble restoring your good credit rating following identity theft, then you may be a candidate for credit repair. Credit repair is about uncovering and providing evidence for instances where the Creditor has unlawfully placed a default or other adverse listing on your credit file and negotiating on your behalf for the removal of that incorrect credit listing by the Creditor. We can put our vast knowledge of industry and credit reporting law behind your case and help negotiate the removal of bad credit which shouldn’t be there. Contact a Credit Repair Advisor on 1300 667 218 to discuss your suitability.

    Image: nixxphotography/ www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • Are you ready to buy a home? Read this first

    Saving for a home? We tell you what you might need to know to put you in the best position to get the best loan out there for you. We show you what the lenders might be looking for, and how they calculate risk by looking at your credit history.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au

    In the 21st Century, being approved for a mortgage is a complicated affair. Not only are savings, income and debt level all taken into consideration, but also how your credit rating appears. It is all about risk calculation. The lender is gauging the likelihood you will default on your repayments. Banks have tightened their belts in the wake of the global financial crisis, so risk assessment plays a big part in home loan approval.

    8 things you need to know before you apply for a home loan

    The first three on the list are generally viewed together. The trifecta of savings, income and debts….

    1. Savings.

    Many people are saving 5-10% deposit prior to applying for a home loan. In many areas of Australia houses are so expensive this can take years to achieve. In fact, it was revealed in The Australian newspaper last month, it takes the average first home buyer in Australia a long five years to save up enough deposit for a home.

    In the same paper today in the story ‘Savings the key to first home – survey’ we see that most buyers are in fact saving up to 10% deposit before entering the market:

    RAMS head of brand and marketing Chris Thornton said first home buyers appeared to be saving more now for a deposit than in previous years.
    “A few years ago deposits were around five per cent for the average first homebuyer, and now it’s often more than 10 per cent that people are saving for,” he said.

    “People are really very serious about saving before they jump in.
    “In the past, people have really squeezed themselves to get over the line, but now, they’re just being a bit more cautious.”
    Living with parents and using high-interest savings accounts appeared to be key in the savings process, Mr Thornton said.

    If your income isn’t high or if you have more debts you may actually require a higher deposit of say 10% to ensure approval.

    2. Income amount.

    The amount of income required is generally determined by the amount of income earned relative to debts and expenses.

    So, the more you earn, and the fewer debts you have – the more you will be able to borrow. If you have a lower income, it may be worth paying off existing debts before applying for a home loan. Also, the more deposit you have saved, the lower the income requirements on the same loan.

    According to Homeloanfinder.com.au in its article ‘How Much Salary Should You Have for a Home Loan,’ lenders use two different formulas to determine how much people can borrow:

    1. Front end ratio. “The front end ratio method will determine how much of your income will be used on the repayments of the home loan. Most people will agree that when using this method you should not exceed 28% meaning only 28% of your income should be used paying off your home loan.”

    2. Back end ratio. “The back end ratio method will consider all debts when determining how much money you will have free to pay off the loan. When using the backend method, most people will agree that you will only want about 36% of your income going on debts and expenses,” the article says.

    3. Debts and credit limits

    The lender will generally assess your debt level to determine the amount you are able to borrow. So reducing debt can increase borrowing power.

    Part of this debt calculation also includes the credit limits which are present on any credit cards or line of credit loans you may hold. This credit limit will be used to determine the debt amount based on the amount of money you have access to, rather than the actual amount the loan or card currently has owing on it.  So if you have a credit limit of say $20,000 on your credit card, the debt amount on that card will be stated as $20,000 – even if the actual amount you owe on that card is only $5,000.

    So seek to reduce the credit limits on any cards or loans prior to applying for a mortgage.

    4. Stable employment.

    Generally lenders are requiring 6-12 months with the same employer. So think twice about changing jobs if you also want to buy a home in the future, even if the wages are significantly better in the new position.

    5. Credit checks.

    When you put in your application for a home loan, the lender will perform a routine credit file check on you to make sure there are no adverse listings present. An adverse listing can be a default, clear out, Judgment, Writ or bankruptcy which is placed on a person’s credit record by a creditor.

    The most common type of adverse listing is a default, which can be placed on a person’s credit file if they fail to make repayments on any form of credit past 60 days. This includes telecommunications and utilities bills.

    Defaults need not be for big amounts – late payments on bills for as little as $100 can be listed on people’s credit files. Defaults and Judgments remain there for 5 years, with clear outs, Writs and bankruptcies remaining for 7 years.

    Any adverse listing, even an unpaid phone bill will have a huge impact on a person’s home loan approval. Most of the major lenders will refuse to lend to someone who has an adverse listing. In fact, that person would probably have difficulty even getting a mobile phone plan.

    6. Excess credit enquiries.

    Whenever a person other than you makes an enquiry on your credit record – that enquiry is recorded against your credit file. Currently there is no way of seeing on someone’s credit report if the loan was approved or not, only that the application was made.

    Some lenders are refusing applications due to too many credit enquiries, such as two enquiries within thirty days or six within the year.

    If you decide to shop around for the best deal, beware of excess credit enquiries. You could find too many enquiries can mean you blow your chances of approval – even if you would have been approved for every deal. So while it is great to talk a variety of brokers or lenders prior to making an application, you must stress to them that they are only gathering information and are not wishing to make an application until you have decided on a lender.

    7. Obtain a credit report

    If you intend to purchase a home within the year you should request a copy of your credit file. This report is free for the credit file holder every 12 months – and tells you what the lender will see about you when you apply for credit.

    There are 4 credit reporting agencies in Australia, Veda Advantage, Dun & Bradstreet, Tasmanian Collection Services (if in Tasmania) and new entrant Experian. You can request a report from all of these agencies. The report will be mailed to you within 10 working days of your request.

    There is the potential for creditors to make mistakes when adding credit listings to credit files. So regardless of how diligent you think you may have been with your repayments, it is important to get hold of a copy prior to applying for a loan.

    Adverse listings can sometimes occur due to identity theft; some people are caught in issues over separation from their spouse; some have been disputing the bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures – wrong names, wrong addresses errors with creditor computer systems, and sometimes human error.
    Many times people are unaware they have adverse listings on their file until they apply for a home loan. Unfortunately at that time it can be stressful, and they can lose the home, or be forced to choose a different loan with a higher interest rate.

    8. Dispute any inconsistencies on your credit file.

    If you find inconsistencies on your credit file, or a credit listing which is wrong, unfair or you believe it simply should not be there, current legislation allows for you to have those inconsistencies rectified.

    If you have settled the account, it can be updated to ‘paid’ status, but this may not be enough to ensure finance approval.

    Credit listings are not removed by creditors unless you can provide adequate reason and lots of evidence as to why the listing should not be there. Credit repair also requires knowledge of the legislation and perseverance. But for those people whose financial freedom is hindered because their credit file contains errors, it is a point worth fighting for.

    Most people have neither the time nor skills to get up to date with the full barrage of credit reporting law if they want to fight a credit listing which has been placed on their credit file.  They are also unwilling or unable to attempt to negotiate with creditors on their own behalf.

    Often a credit repairer is the best person to give you the best chance of having inconsistencies completely removed from your credit file, because similarly to trying to fight your own case in Court, if you don’t get it right, often you don’t get another chance to clear your name, and can be stuck with the bad credit for the term of the listing (5 to 7 years depending on what it is).

    A clear credit record can allow you the option to choose the best loan to suit you, with the best interest rate so it is vital it reads as best as possible to allow as many options as possible – and ultimately save you money.

    For more information on credit repair, contact our Credit Repair Advisors on 1300 667 218 or visit our main site www.mycra.com.au.

    N.B. This post is intended as information only, and should not replace seeking professional financial advice for your situation.

    Image: digitalart/ www.FreeDigitalPhotos.net

  • What Does Your Credit File Say About You?

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    Our credit file is like a mirror on our finances. How healthy are you looking? Here’s a back to basics look at the ins and outs of taking on credit in Australia, and why it’s important to look your best when applying for credit by having a clean credit history.

    By Graham Doessel, Founder and CEO of MyCRA Lawyers and www.fixmybadcredit.com.au.

    When you apply for credit, the lender will, after assessing your savings history, your income and your debts – order a credit check on you. This involves contacting one or more of Australia’s credit reporting agencies, to order a credit report from your credit file.

    What the lender sees on your credit file can reflect your assets, your good history, but it can also reveal your financial shortcomings. It can be a reflection of your inability to stick with something, your disregard for repayments, or the financial potholes that are sometimes impossible to climb out of. Let’s look at what a lender might see about you on your credit file, and how you can make sure it looks squeaky clean.

    Your Credit File

    Is a collation of your credit history. As soon as you become credit active, you have a file opened in your name. This file is then attached to you as long as you apply, use and unfortunately abuse credit – it will follow you everywhere in Australia.

    If you have applied to borrow money, or have established an account for services you are considered credit active.

    Every creditor inputs information about you to one or more of the credit reporting agencies in Australasia. Australia’s CRA’S include: Equifax (Formerly Veda Advantage), Dun & Bradstreet, Experian & Tasmanian Collection Services (TASCOL) if in Tasmania.

    What a credit file contains

    – Your credit file includes identity information – such as your full name, date of birth, gender, driver’s licence details, addresses and employer information.

    It also includes other information about your credit and repayment of credit history:

    -Any current active credit and details of current credit providers, for instance mortgages, personal loans and credit cards.
    – Any overdue credit accounts – these may be reported as either a ‘payment default’ or a ‘clearout’.

    How long will I have bad credit?

    Credit Reporting Body Equifax reports these time periods for holding information on your credit file:

    How long is the information held on my credit file?
    • Credit applications and enquiries and overdue accounts are held on your file for five years
    • Overdue accounts listed as a payment default are held for five years
    • Overdue accounts listed as a Clearout are held for seven years
    • Bankruptcy Act Information is held on your file for seven years (prior to January 1998, Bankruptcy Act Information was held for five years)
    • Court Judgments are held for five years
    • Writs & Summons are held for four years
    • Identity information, which includes name, date of birth, sex, drivers license, address history, and linked names (if any) are held for the life of the credit file. This information is used to distinguish the credit file from others held in the database
    • Purge dates are calculated on the date the information was added to the file, and are based on the time limits provided in the Privacy Act 1988
    • Files are scanned each month and out of date information is automatically purged to ensure the files are accurate.

    NB: Even when an overdue account or clearout has been brought up to date or paid in full, it will not be removed from your file.

    All payment default listings remain on file for five years from the date of listing. All clearout listings remain on file for seven years. The fact that an account has become overdue, and then been paid becomes part of your credit history.

    Your credit report

    As the credit file holder, you are legally able to obtain a copy of your credit report for free from all of the credit reporting agencies in Australia every 12 months – and a written copy of your credit file will be provided within 10 days from your written request.

    Every credit active person should obtain a copy of their credit report annually  – regardless of whether or not they think they have a bad credit rating. It is important that when checking your credit file, you obtain reports from all possible credit reporting agencies.

    Definition of a ‘bad’ credit rating

    If you don’t already know you have bad credit, you would be notified at the time of credit application, when the credit provider obtains a copy of your credit file.

    In broad terms, any credit defaults, court actions or writs, external administrations and bankruptcy are all recorded on your credit file and would be considered ‘bad’ credit history by most credit providers.

    In this current economic climate even too many credit applications are often considered to be ‘black marks’ on your credit file.

    Impact of a bad credit rating

    If you discover you have a negative listing on your credit file, you will find it very difficult to obtain mainstream credit in the future, generally for the term of the listing (5 -7 years).

    You will likely be refused a home loan with most lenders and possibly be refused credit of many kinds from credit cards to phone plans right through the term of the listing.

    Too many credit enquiries on your credit file may also stop you from getting major credit with most lenders.

    Most times the loan options available to bad credit clients are at significantly higher interest rates in order to cover the risks associated with taking on someone with bad credit.

    Can you change what is said about you on your credit report?

    It depends if the information on your credit report is accurate or not. If your address or other personal details are inaccurate, you may want to contact the credit reporting agencies to have this rectified. But you should also consider why. Do you think it’s possible that there are inconsistencies on your report? If you also have defaults or other credit listings which you feel shouldn’t be there, you should pursue the matter through making a claim with the Creditor to dispute and remove any listings which should not be there.

    Any credit listings which you feel are unfair, incorrect or just shouldn’t be there should be addressed well before you need to apply for credit. The impact of bad credit is pretty severe – and can haunt you for a long time. Spend the time to make sure everything is correct on your credit report.

    You may only get one chance at clearing your credit file – so it’s important to give yourself the best chance of having any inconsistencies removed from your report by using a professional credit repairer.

    Sometimes individuals can attempt to deal with creditors to remove the credit rating default themselves and can do more harm than good by not understanding the legislation.

    Credit repair is a lengthy process, involving the review of all documentation from an individual – including the credit file and all the circumstances surrounding the default, writ or Judgment.

    Then the credit repairer negotiates with the creditor who initiated the listing on your behalf to remove the default.
    This can also often involve lengthy requests and submissions of documentation until an agreement is reached by the creditor and the repairer to remove the offending black mark.

    Not every credit file is suitable for credit repair. The credit repair company can review your situation and determine whether your case is worthy of pursuing.

    For advice about whether your adverse listing may be suitable for credit repair, contact a Credit Repair Advisor on 1300 667 218 or visit our website for more information www.mycralawyers.com.au.

    Once your credit file is restored and your bad credit is removed, you will be looking great to the lender, and ultimately feeling great when you have access to the best credit you can, at the best rates.

    Image: Stuart Miles/ www.FreeDigitalPhotos.net

    Image 2: imagerymajestic/ www.FreeDigitalPhotos.net

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  • New Credit Laws Pass House of Representatives

    Australia’s new Privacy Laws, which include a credit reporting law overhaul are coming to fruition. Amendments to the Privacy Act 1988 passed through the House of Representatives yesterday. What will this mean for you, your credit file and will it make it easier to remove bad credit?

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    The Attorney-General announced late yesterday that the House of Representatives had passed reforms to the Privacy Act 1988. The Privacy Amendment (Enhancing Privacy Protection) Bill 2012 – which includes major amendments to Australia’s credit reporting laws –will now be introduced in the Senate where it is currently being considered by the Senate Legal and Constitutional Affairs Legislation Committee. The Government may make further amendments in the Senate in response to the Senate Legal and Constitutional Committee’s report, which is due to report shortly.

    “The House Committee has found that the reforms should be passed in their current form and the Government has moved quickly to implement those wishes,” Attorney-General Nicola Roxon said in a statement to the media yesterday.

    Ms Roxon says the reforms will focus on giving power back to consumers over how organisations use their personal information. The power will be extended to consumers in the area of credit reporting.

    “These changes will also provide much more power to consumers to be able to access and, if necessary, correct their credit reports,” Ms Roxon said.

    Through the reforms the powers of the Privacy Commissioner’s will also be enhanced to improve the Commissioner’s ability to resolve complaints, conduct investigations and promote privacy compliance. For example, the Commissioner will also be able to apply to the court for a civil penalty order against organisations for credit reporting breaches. Penalties for an individual range $2,200 to $220,000 and for a company they range from $110,000 to $1.1 million.

    We welcome the changes in the area of credit file correction. The new laws will most importantly enable consumers to force their Creditor to justify a disputed listing; and give consequences for credit reporting breaches. This is important in correcting credit listing complaints.

    Whilst the changes should make a positive difference in ease of correction, what can make or break a credit listing complaint – is the individual’s knowledge of credit reporting law. In order to make a successful complaint to justify removing a credit listing, the individual must show that the Creditor has unlawfully listed it. The complainant must also be able to give evidence to show how that occurred, which means providing supporting documentation from the Creditor– which can also be difficult for the individual to obtain. Then there’s marrying the two together. Then, there’s negotiating with the Creditor.

    All of these aspects of disputing a credit listing could still see a valid complaint come unstuck if not performed correctly.

    In addition to this, there are a myriad of reasons why a credit listing may be unlawful which are not immediately evident by the individual. Creditors can and do make mistakes with credit reporting. They don’t give the right notification to the consumer; they don’t give them adequate time to remedy the arrears; they don’t update contact details for the client; they don’t get the account right in the first place.

    So it will still give you the best chance of having a disputed credit listing fall in your favour if you open your options, solidify your case, and have the matter handled by a professional credit repairer. But it will be important to choose the right kind of credit repair and make sure you’re looked after each step of the way. Visit our main site for more details www.mycra.com.au or contact a Credit Repair Advisor on 1300 667 218.

    Image: Salvatore Vuono/ www.FreeDigitalPhotos.net

  • Can you run a business with bad credit?

    Running a small business can be extremely trying. Cash flow can be a problem for many people with a small business, and this in turn can lead to accounts in arrears. If you are unlucky enough to incur a default on your commercial credit file during your business ownership, you could find things extremely difficult. It would be difficult to borrow more money to expand your business, or buy vehicles, or even set up a mobile phone plan. This blacklisting of your credit file can even mean you are forced to sell the business or go bankrupt, or lean heavily on your personal credit file when you need to borrow money. We cover the ways you can get bad credit, and why you should avoid bad credit history attaching itself to your business and your personal life at all costs.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    An article published recently by Dynamic Business shows there has been a jump in the number of businesses entering external administration:

    “According to ASIC figures, the number of businesses entering external administration in the 2011-12 year was up 9.4 percent over the 2010-11 financial year.

    CreditorWatch managing director Colin Porter said data collected by his own business suggests a 22.5 percent rise in defaults in 2012, with construction/building, retail, hospitality and printing sectors the hardest hit.

    Porter said what’s more worrying is that the value of defaults is also growing, with the average dollar amount of each default registered rising 18.5 percent. This was even more marked in the final three months of the last financial year, with Q4 2011/2012 up 22 percent on Q4 2010/2011.

    “June represented the highest number of defaults registered, plus the highest dollar value of the defaults on record,” he added” an excerpt from the article Diligence key to avoiding bad debt.

    These are worrying statistics for business owners, particularly when you see the consequences of bad credit.

    Why accounts should be paid by the due date

    Bad credit can be extremely easy to cop on your commercial credit file. And you may not have the same protections as you do for your personal debts.

    Commercial credit reporting is not subject to Part IIIA of the Privacy Act, which governs notification requirements for consumer credit reporting specifically in the Credit Reporting Code of Conduct.

    In the Credit Reporting Code of Conduct, an account must be at least 60 days in arrears, and an amount of at least $100 must be outstanding for the Creditor to be able to place the default on the consumer’s credit file.

    Whilst commercial credit has provisions in the National Privacy Principles for correction of mistakes, there is no provision for adherence to the Code of Conduct.

    So technically, if you are one day late in paying an account, a Creditor may legally be able to place a default on your commercial credit file. Despite the law, many of the Ombudsman Services do encourage Creditors to give adequate written notice to remedy an account in arrears prior to listing a default. But sometimes this issue can be a contentious one when trying to dispute what you consider to be an unfair credit listing.

    Ideas to keep the cash flowing so you don’t get in arrears

    1. Pay all accounts on time. This is the easiest way to ensure there are no discrepancies or defaults on your credit file.  You need to have systems in place whereby credit cards and all bills are paid on schedule if not by you then by administration. If the business is running behind, creditors need to be contacted and payment plans possibly worked out before the due dates to best avoid a default listing on your credit file. Many industries are tending towards offering those in financial hardship alternative payment arrangements rather than placing a default on the credit file. If you do need to request financial hardship for a case of temporary hardship, you should contact the Creditor in writing. This does not guarantee you will be successful in your request, but the Creditor has a number of days to respond prior to placing a default on your credit file for any accounts in arrears.

    2. Ensure all accounts are paid to you on time. Chase up bounced cheques and failures to pay immediately.  Too many accounts left unpaid can leave you short on cash and run your business into the ground if left to continue. Regard any client non-payment as potential risks to your credit rating.  Develop a tactful system for retrieval ahead of time – reminding clients of the risks to their credit rating by defaulting on payments to you. If overdue accounts go beyond 60 days, notify the account holder in writing you will be referring the non-payment to a credit reporting agency.

    3. Consider credit checks for all potential account holders. Anyone who requests an account of significant proportions could be required to submit a credit application before the account is instigated. This involves you running a credit check on them with one of the major credit reporting agencies. At the very least, as Porter also recommends, obtain the entity’s correct name and ABN/ACN, and verify that the ABN/ACN is active and is still legally operating.

    4. Regularly obtain a copy of your credit file – once a year is recommended to ensure it is all as it should be. If there are any discrepancies or listings which you believe should not be there, address them prior to needing the extra credit for your business. This will mean less stress for you. Clearing unnecessary defaults allows you to get on with your life, and the important business of running your company

    5. Keep credit card limits within a set budget as specified by the needs of the company. Don’t be tempted to set a lofty limit to your credit card as it may just encourage needless spending and blow out your business budget.

    6. Be aware of excessive credit enquiries. If you are not sure about your credit health, run your own check before applying for new credit.  Some lenders are rejecting loans for as little as two credit enquiries in 30 days, or six enquiries within the year – so it pays not to shop around for credit and to only apply for credit you have an intention of pursuing.

    7. Most importantly, monitor your accounts regularly.  If you are the owner of the business but not the person responsible for accounts, ensure you still have hands on knowledge of the business’ expenses.  Check accounts are being paid, check receipts and credit card statements regularly.

    In the current economic climate with businesses potentially more likely to pay accounts late, there has never been a more important time to protect your credit rating by being firm with your own and your client’s payments.

    Your consumer credit file

    SMB’s it can find be tempting to take out credit using your consumer credit rating. Redrawing on the mortgage, and taking out personal loans is evidently quite common amongst small businesses who report finding it difficult to get credit to fund their business in the current market.

    Smart Company reported back in June on new research by software firm MYOB showing 28% of small businesses use their home loan to finance their business in some way.

    The survey of over 1,000 SMEs, shows how tightly linked mortgage rates and business finance really are.

    Just under 15% of SMEs utilise a line of credit through their home loan to help fund their business, 5% have funded their business by increasing the value of their home loan and 5% funded their business by redrawing against equity in their mortgage.

    A further 4% have used cash sitting in their mortgage offset account to pump into their business.

    The danger with involving personal credit in your small business borrowing is the chance of business debt and bad credit history spilling over to the personal credit rating.

    Business is touchy and subjected to many unknowns, but the family home and your consumer credit file should be kept protected. If some major clients go under, and payments are not made – who’s going to help fund your now over-extended mortgage? You will go into a credit lock down of both consumer and commercial credit files. Your access to mainstream credit is virtually nil for the next 5 years. Not only can your credit rating be compromised, but your spouses’ as well. Any new credit will be at sky-high interest rates. You might lose the business, and any opportunities to borrow again for business in the future, but worse, you might lose your family’s ability to borrow at good rates for a mortgage, personal loan, credit cards and even mobile phones.

    So to protect your good name – choose your credit wisely, choose your clients wisely, and make paying your debts a priority – regardless of the size of your business.

    If your good name has been compromised by bad credit history, and you believe it should not be there, you may be suitable for credit rating repair. Contact a Credit Repair Advisor on 1300 667 218 or visit our website www.mycra.com.au for more information.

    Image: tungphoto/ www.FreeDigitalPhotos.net

     

  • Inside Secrets for the Best Mortgage

    Can we trust everything we believe to be true about applying for finance? We look at some great information to help you get the best deal on your home loan – and look at why a bad credit is something you should know about before you apply for a mortgage, to avoid being refused credit.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Yesterday I read a great article in the Herald Sun titled “Time To Topple Mortgage Myths”. The article uses the information from top finance professionals to debunk five common mortgage myths. We look at the advice of those finance experts, and give you further advice as it relates to your credit rating and risk assesment. Here is the Herald Sun’s article:

    Myth 1: Lowest interest rate loans are best

    Unfortunately many borrowers will judge one home loan against another simply on the interest rate, which can be a big mistake.

    If they make their decision on this “headline” rate, it could cost them tens of thousands of dollars extra, Resi Mortgage chief executive Lisa Montgomery says.

    “Most borrowers don’t look at the comparison rate but they must,” Montgomery says.

    “Check the comparison rate. It’s a great rule of thumb that helps you understand at a glance the true cost of a loan.
    “It includes all the upfront and ongoing fees that need to be paid during the course of the loan.”

    Fees and charges can add several basis points to the cost of the loan. Read the mortgage contract for all the details.

    Whilst it is true the lowest interest rate may not always be the best, a high interest loan isn’t either. I am referring to a non-conforming loan used by people with negative listings on their credit report (or “bad credit”). In terms of saving money, this is seldom a better option. If there is any inkling that the bad credit shouldn’t be there, you will always save money if you can have your credit rating repaired by a professional credit repairer rather than continuing with a non-conforming loan – even if for only three years. For example, on a $300,000 loan – it would cost you $23,000 more in interest over the first three years at 9% interest, versus a more “mainstream” rate of say 7%. If you have bad credit, you should find out if you are suitable for credit repair before entering a high interest loan.

    Myth 2: Bad credit ratings prevent borrowing

    Your credit rating can both help or hinder the type of mortgage you are offered. If you have a poor record, it does not automatically mean you won’t get a loan.

    But it can mean a lender will consider you a greater risk and want to charge a higher interest rate.

    Not all unpaid bills and default histories will stop you getting the best deal.

    Mortgage broker 1300HomeLoan managing director John Kolenda says defaults on utility bills or phone bills can be explained and overlooked.

    “But it is very important to make sure you tell your lender about your history,” Kolenda says.

    “Don’t let them find out when they do your credit worthiness search.”

    It is not always the case that people are refused a home loan if they have bad credit, but it is never ideal. As mentioned above, depending on how high the interest rate will be – it may make more sense to look at those bills or other defaulted accounts that can be “explained” or which were unfair or mistaken and have them negotiated to be removed so as to get the best deal you can.

    If you do want to discuss your options with your lender while knowing you have bad credit, yes it is very very important to be honest with them about your credit file. But where many people come unstuck and are refused credit is when they don’t know about it before they apply. This surprise bad credit can occur for a number of reasons, maybe the Creditor had the wrong billing address, or the default was a mistake, or you weren’t notified. Either way, it looks bad for you and means you fail that credit worthiness test. Surprise bad credit is often worth investigating to ensure the listing was put there lawfully by your Creditor.

    Myth 3: Offset accounts are the best way to cut your interest

    Financial research company Canstar analyst Mitchell Watson says there are much better ways to cut your interest costs than using an offset account.

    “A lot of people will have their wages or salary paid into a mortgage offset account each month but for the average wage earner this isn’t going to be worth much at all,” he says.

    “An offset account for someone on about $65,000 is only going to save about $20 a month interest. Over the life of the loan, however, it does add up to about $14,000.

    “However, if you make fortnightly payments instead, so you divided the monthly amount by two and pay it every fortnight, you will save about $55,000 over the life of the loan and cut your loan term by four years.

    “Better still, do both – use an offset (account) and fortnightly payments.”

    Myth 4: If you pay off your credit card, you’ll be able to borrow more

    Wrong. Even if you owe nothing on your credit card, the limit will still be counted towards your total potential outstanding debt, according to 1300HomeLoan.

    “Your credit card limit affects your maximum borrowing capacity with some lenders. For that reason, you should reduce your limit or cancel the cards you are not using before applying for a home loan,” Kolenda says.

    Even with new information provided for in our new credit laws which are in the process of going through Parliament, your credit limit, rather than the amount owing will be used to assess your debt level.

    Myth 5: Pre-approved loans are pretty much guaranteed money

    This is not true, the experts say.

    Pre-approval is an offer to lend money based on a percentage of the property’s value.

    The price you pay is not necessarily its value, Montgomery says.

    “Always sign a contract of sale ‘subject to finance’ even if you have a pre-approval,” Kolenda adds.

    “Your valuation needs to stack up and you will still need final approval.”

    Are you sure the lender has done a credit check before providing the pre-approval?

    The best course of action is – prior to applying for a home loan, request a copy of your credit report from Australia’s credit reporting agencies yourself. It is free once every year and will be mailed to you within 10 days. This way, you will know whether your credit file will let you down at the mortgage application stage and you won’t accumulate a ‘credit enquiry’ or any black mark against your name by letting the lender do the credit check and find out too late that you have problems that could have been fixed.

    If you would like help to fix bad credit before applying for a home loan, contact a Credit Repair Advisor on 1300 667 218 or visit our main website for more information www.mycra.com.au.

    Image: Stuart Miles/ www.FreeDigitalPhotos.net

  • Attorney-General’s survey shows identity theft is on mind of most Australians

    A national identity theft survey reveals that most of us are worried about identity theft, and the number of us who have been or know someone who has been a victim of identity theft has increased. We look at what the survey reveals, whether these fears are founded, and what we can do to alleviate them.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au

    The Attorney-General Nicola Roxon has published results of a nationwide survey into identity theft. The research released today was commissioned by the Attorney-General’s Department and repeats a similar id theft survey conducted in July 2011. The key findings include:

    • 89 per cent of respondents are concerned about identity theft and 61 per cent think identity theft will increase in the next year

    • 24 per cent of respondents had been, or knew someone who had been, a victim of identity crime in the last six months – an increase of seven per cent since 2011

    • When identify crime occurred, 58 per cent involved the internet, through either a virus or an online scam, 35 per cent involved the loss of a credit or debit card, 18 per cent involved mail theft and 9 per cent involved the theft or loss of physical identity documents such as a passport and drivers licence.

    The results of this research will inform the review of the National Identity Security Strategy currently being undertaken by the Department in conjunction with the States and Territories.

    Ms Roxon assured Australians there were solutions and preventative measures to combat the ongoing problem of identity crime, which is one of the top three enablers of serious and organised crime in Australia, and can have serious financial implications for business, governments and individuals.

    “While identity theft is understandably concerning, Australians can take some simple steps to protect their identity,” Ms Roxon said in a statement to the media.

    “Making sure you don’t respond to suspicious e-mail or store personal details on your mobile phone are two easy steps to prevent identity theft.”

    She also made mention of the Document Verification Service – currently a government agency service which allows key identity documents such as passports, driver licenses and birth certificates to be cross-checked between departments. The government will roll out the DVS to the private sector next year.

    “From next year, the financial and telecommunications sectors will be able to access the DVS to check Commonwealth identity documents, such as passports and visas – further helping the private sector to protect their customers’ identity,” she said.

    Should Australians be afraid of identity theft?

    From our point of view, the more you are educated about identity crime and how to prevent it – the less fear it sparks in your mind.

    Let’s look at a broader survey – the Australian Bureau of Statistics Personal Fruad Survey. This surveyed a total of 1.2 million Australians over 2010-11 and was released in April this year.

    Whilst it was reported that Australians lost in total $1.4 billion due to personal fraud, the ABS puts the national vicitmisation rate for actual identity theft at 0.3% (a decrease from 0.8% in 2007).

    Perhaps there has been an increase in identity theft since the ABS survey was published, but what may likely have occured, is that people are talking about identity theft more. It could be that more people “know someone” who has been a victim of identity crime or personal fraud. Could we assume that more people are talking about their experiences, and hopefully reporting instances of fraud and identity crime?

    Without people reporting instances of identity theft, it is difficult to get ahead of fraudsters.

    It is a very real fact that full-blown identity theft – where someone steals your personal information and assumes your identity – can have very disastrous consequences. Identity fraud can involve crooks taking loans out in your name. This not only means you could be lumbered with random debt, but often you are unable to get any loan of your own for 5-7 years because your credit file is blacklisted when these debts fall into default.

    The message we want to send is that your personal information needs to be guarded well. If you safeguard your personal information as much as possible, you put yourself at less risk of identity theft.

    Educate yourself on the ways that fraudsters could misuse your personal information or your credit rating. Put as many preventative measures in place as you can (such as anti-virus software, paper shredder, safeguarding information, regular credit file checks) to ensure that you have the least possible chance of becoming a victim.

    And most importantly, stay up to date with scams that are out there. Identity crime and scams are changeable – what worked for fraudsters one week quickly becomes public knowledge, so they move on to something new. Getting on to something like StaySmartOnline’s Alert Service, or checking SCAMWatch regularly will go a long way to helping you to stay ahead of identity crime.

    And talk, talk, talk about what you know about identity theft, to help educate the community around you. Talk especially to young people who might not fully understand the consequences of giving away their personal information (and there are consequences even for under 18’s) and also talk to older people – who may be more vulnerable to these predators and could need help with education and updates to computer software.

    If you or someone you know have been a victim of identity crime which has impacted your credit rating, all may not be lost. We may be able to help you recover your good name. Contact a Credit Repair Advisor on 1300 667 218 to discuss your suitability for removing bad credit, or visit our main website for more information www.mycra.com.au.

    Image: Salvatore Vuono/ www.FreeDigitalPhotos.net

    Image 2: phanlop88/ www.FreeDigitalPhotos.net

  • 7 ways to be smarter with your money and clean out the cobwebs on your finances this spring

    Are your finances in need of a spring clean? Well this week is MoneySmart Week in Australia. We give you some inspiration to get in and tidy up those loose ends with your money and also your credit file – with our 7 ways you can be smarter with your money.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    MoneySmart Week is being held 2-8 September in Australia. It has some major Ambassadors, including our Governor-General Her Excellency Ms Quentin Bryce AC CVO and money commentator Paul Clitheroe.

    MoneySmart Week is an independent, not-for-profit national initiative promoting the importance of financial literacy. The MoneySmart week website explains the importance of financial literacy:

    MoneySmart Week 2012 includes:

    • A call to action for all Australians to take the next step in their financial health: ‘Do a Money Health Check’.
    • A National Awards program to recognise outstanding achievements in financial literacy.
    • Promotion of existing money management programs, tools and resources.
    • A range of special activities and events in workplaces and the community.

    Why is financial literacy important?

    Financial literacy is about understanding money and finances and being able to confidently apply that knowledge to make effective financial decisions. It affects quality of life, opportunities we can pursue, our sense of security and the overall economic health of our society.

    To find out more about financial literacy, visit www.financialliteracy.gov.au

    Do you consider yourself smart with your money? Many of us do I am sure, but are we always completely on top of everything? You can check how you rate by taking part in the Money Health Check – an online questionnaire to test how savvy you are with your personal finances. We would encourage everyone to get in and do the Health Check or at the very least, dust the cobwebs off those financial documents and make sure everything is in order.

    We have devised some reminders for getting your finances together:

    7 ways to be smarter with money this spring

    1. Make a money ‘map’ to ensure you are aware of what you have, what you don’t and what you owe. This is the best way to be clear you are living within your means. By doing up a money map, you will have the benefit of knowing where you can squirrel away extra cash to help pay off any debts faster – you may have never known you had that extra money available without creating a budget.

    For help with putting together a money plan ASIC’s MoneySmart website has a great budget planner. The Victorian Government’s Money Help website also has some great tips.

    2. Make debt reduction a priority. Any extra cash that comes your way would be well used by reducing debt – especially those debts where the interest rate is high.

    3. If you are able to, put extra onto your home loan. Increasing your mortgage repayments even slightly, can see you cut years off your home loan

    4. Make sure every bill will be paid on time. This can come down to organisation as much as funds. With new credit laws on the horizon meaning lenders will be recording bills that aren’t paid on time as “late payment notations, it is advisable to get into the habit of paying your bills well before the due date every time to ensure you don’t miss one, and threaten your credit file health and ability to obtain credit  in the future.

    Bills missed past 60 days will mean your credit file is defaulted and you will face 5 years of bad credit – so it is absolutely essential to get repayment schedules right.

    5. Assess your insurances – are they the best plans for your needs? Are they accurate and up to date?

    6. Check your credit file – take advantage of your free annual credit report. A free copy of your credit report can be obtained from one or more of Australia’s credit reporting agencies – Veda Advantage, Dun & Bradstreet, and Tasmanian Collection Services (if in Tassie). Your free report will be mailed to you within 10 working days.

    When you get your credit report back, here are some things to check for:
    -Check your name is correct
    -Check your date of birth is correct
    -Check your driver’s licence number matches up
    (If any of those things are not correct – you may be vulnerable to identity theft or mistakes on your credit report).
    -Check your address history is correct
    (If there is an address you don’t recognise on your credit report – this could also mean you may have been a victim of identity theft, or mistakes have been made in credit reporting where credit has been issued to your credit file incorrectly).

    -Also assess each credit entry and make sure it is correct.
    Are all the credit enquiries initiated by you? This is one of the first signs of an identity theft attempt.

    If you have a default – should it be there? Is it yours? Is it fair? If a default is deemed unlawful, it may be required to be removed by your Creditor.

    There are a number of reasons why a default could be unlawful – including errors, mistaken identity and incorrect details as well as unfair listings and listings where an incorrect amount of notice has been provided to the client.

    For help with ordering your free credit report, and also repairing bad credit which shouldn’t be there, or if you just want to see whether you qualify for credit repair – contact a MyCRA Credit Advisor on 1300 667 218 or visit our main site www.mycra.com.au for more information.

    7. If you’re throwing out any old papers – make sure you shred them. Your financial security is paramount, and the amount of personal information on many of our financial documents could be enough for a fraudster to go about trying to steal our identity. Unfortunately there have been cases of crooks sifting through rubbish to find this kind of information in order to piece together enough to go about requesting replacement copies of your identification. This gives them a ticket into your life – your bank accounts, your tax and potentially your credit rating. Fraudsters have been known to take out loans in the name of their victims – leaving them with debt and a damaged credit file.

    The process of fixing bad credit after identity theft can be complicated. In some cases it has taken years to put right. So buy a good shredder, and cross-shred every piece of identifiable information before you throw it away.

    Why spring is a good time to take stock of your money…

    • It’s tax time. If you are due a refund – you will then know the way to make the best use of your return. Likewise if you are expecting a tax bill – you will know where you might be able to skimp to come up with the extra money you will need.
    • It’s almost Christmas time. If you want to budget well for Christmas – you can start now.
    • It’s transfer time. If you know you will changing jobs; moving interstate or downsizing jobs you can budget for any extra expenses that will ensue.
    • It’s almost holiday time. If you want a holiday after Christmas, or you want to take time off with the kids in the New Year you can budget this in as well.

    For the same reasons above you may also need to BORROW money and this is why checking your credit file and alleviating any inconsistencies is important well before you may need  to apply for credit.

    Basically it is ‘finance time’ and if you can allocate space in the spring time every year that you can dedicate to making sure your finances are as they should be – then you will be on your way to being savvy with your “everyday money” every day of the year.

    This information is intended for general purposes only and should not constitute financial advice nor replace seeking help from a professional financial adviser.

    Image 2: smokedsalmon/ www.FreeDigitalPhotos.net

    Image 3: David Castillo Dominici/ www.FreeDigitalPhotos.net

  • Lost your job? Three things you need to know to prevent bad credit haunting you long after you get a new one

    unemployedJob hunting and credit files seem unrelated – but they are connected for three reasons. We tell you how when you have lost a job, or when you are in the process of finding a new one, there are some things that impact your credit file that you need to know about. If heeded – they can help you avoid bad credit.

    By Graham Doessel, Founder and Chief Executive Officer of MyCRA Lawyers

    Yesterday, an article from SavingsGuide.com.au What To Do When You Lose Your Job caught my eye. It went through the things you need to do to make sure you remain in the black with your finances after you have lost your job. This article is the inspiration for the first piece of advice:

    1. If You Have Lost Your Job – Sit Down and Work Out What You Owe and What is Owed To You

    Even if you think the situation is very temporary – you don’t have a crystal ball. Put measures in place straight away to protect yourself and your family from debt and bad credit.

    Savings guide recommends taking advantage of any insurance policies of income or mortgage protection that you have in place immediately. It could take a little while to process the claim. If you don’t have insurance, don’t be too proud to apply for assistance with the Department of Human Services. The sooner you do this the better, as it could take up to a few weeks to process the claim.

    You will also need to work out how much disposable income you have now, and tally up all of your bills that you consider will appear in the future.

    ASIC’s MoneySmart Website has some great advice and specific links for further information on what to do if you find yourself unemployed. Here is an excerpt from their web page titled Losing Your Job:

    Knowing where you stand financially

    You will feel able to make clearer decisions once you know how much money you really have. Find out what you have in savings, then list every expense you’ll have to meet for the next 2 months. Use our budget planner and include necessities like mortgage payments, loans, health care, medicines, car and home maintenance, and insurance premiums.

    What you want to do is avoid getting in arrears with your accounts at all costs. It only takes 60 days in arrears on any account to get into ‘default’ with creditors, and this notation on your credit file will mean you will probably be blacklisted from credit for 5 years – even if you find another job and get everything back on track a month or two later.

    Once you have worked out how long your current funds are going to last, you will be in a good position to do the next task…

    2. If You Have Lost Your Job – You Need to Put Your Hand Up and Tell Your Creditors

    Don’t wait until you are in arrears (or in debt up to your eyeballs!) to let your Creditors know. As SavingsGuide recommends, negotiating with Creditors early is the smart thing to do:

    “Whether it’s your mortgage or a monthly gym membership fee, you’re going to need to address these payments before they get out of hand,” writer Toria Phillips advises.

    Financial hardship variations are encouraged in many industries, with new regulations having just been brought in for both the finance and telco industries.

    Money Help, a website run by the Victorian State Government offers more help on how to apply for hardship with creditors in the correct way. They advise people to work out what they can afford to pay prior to requesting a hardship variation – so if you have done this you will have a better chance of coming to a more affordable arrangement with your Creditor.

    The Creditor may be able to offer reduced payments and in some cases could stall any movements to default your credit file if you happen to get in arrears.

    Creditors are legally required to consider a person’s request for variation on payment arrangements, but are not obliged to agree to any hardship variation proposal put forward. But there is a trend towards offering help before defaults – so it is crucial to ask.

    Having your current debts at a more manageable level will allow you to concentrate on the actual process of finding a job. But beware (as if you didn’t have enough to worry about) whilst you are looking for a job you also need to look out for fraudsters…

    3. Job Seekers Scam Warning – Be Wary of Giving Away Your Personal Details To Scammers

    Last week the Australian Taxation Office issued a warning to job seekers that they were the target of scams. It reports they have received more than 10,000 reports on a wide range of scams including fake job advertisements, emails and bogus phone calls.

    Tax Commissioner Michael D’Ascenzo explains the job seeker scam – that bogus job ads are being posted on recruitment websites by scammers, and that people are even being asked to provide their tax file numbers.

    “Personal information can be used by scammers to lodge false tax returns in your name, enable the use of your credit cards or even result in people taking out a loan in your name. In some cases, identity crime can take years to resolve,” Mr D’Ascenzo says in a statement to the media.

    Becoming a victim of identity theft is the last thing a person who has lost their job needs. This crime could mean what little money you may have left in your bank accounts is drained by fraudsters; or a much-need tax return is pilfered; or it could even mean you have debts in your name you did not initiate and your ability to obtain credit is compromised for years to come.

    Don’t ever give a potential employer your Tax File Number, banking details or any other crucial personal details until you begin work with them! If you’re not sure – you can always contact the Australian Competition and Consumer Commission (ACCC) to dispel any suspicions before you give away your personal information. You can call them on 1300 795 995 or visit the ACCC’s SCAMWatch website www.scamwatch.gov.au.

    Let’s hope your unemployment is only very temporary and you are able to keep your credit file free from bad credit during the process!

    If you are currently experiencing bad credit due to a temporary financial hardship such as a job loss, it may be worth assessing whether your credit history can be reviewed by a professional credit repairer. Any listings which are deemed unlawfully placed for whatever reason could be required to be removed by your Creditor. Contact a Credit Repair Advisor on 1300 667 218 or visit our main website www.mycralawyers.com.au for more information.

    This week running 2-8 September, is MoneySmart Week – Australia’s first ever national, not-for-profit, financial literacy awareness week. For more details visit the Australian Government Financial Literacy Board initiative www.moneysmartweek.org.au.

    Image: winnond/ FreeDigitalPhotos.net

  • Telco bill shock should in theory now be a thing of the past

    The Telecommunications Consumer Protection (TCP) Code came into effect on September 1. We look at what this means for telco customers and the possibility that less consumers could be subject to bill shock and subsequent credit rating defaults due to sky-high bills they had not budgeted for.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    Currently approximately 26% of our credit repair clients have suffered bad credit from telcos (telecommunications providers). Not all of that bad credit should be there. Whilst mistakes and mis-communications are frequent in the industry, as they are in many others – one of the major significant differences we have noticed with the telco industry compared with other industries issuing credit file defaults, is more clients are in dispute over excess charges.

    Excess charges or “bill shock” can occur when the actual bill the customer receives is significantly higher than what they understand it should be. Issues like international roaming charges, excess data charges and customers going over plan allowances (especially when the plan had the term “cap” within it) seems to be a frequent source of dispute amongst customers.

    Unfortunately sometimes the customer is unable to come to an agreement over these charges before they are issued with a credit rating default. These issues can be hard to fight. Often the customer will say what they had first understood the plan to be for, or what they wanted the phone to do, was not what eventuated.

    Resolutions with telcos over these billing issues can be difficult to come to. Sometimes consumers have reluctantly paid the bill, thought the matter was settled, only to find they were defaulted anyway, and others have just refused to pay the bill until they got some resolution. Either way, customers have been faced with at least 5 years of bad credit from the episode unless they have been able to make a successful complaint.

    The telcos – with all the power on their side can often come out on top.

    Escalating levels of telco complaints in Australia, resulted in a major public inquiry by the Australian Communications and Media Authority (ACMA) and the report – Reconnecting the Customer. This examined the root causes of the industry’s poor customer service and complaints-handling performance. The telco industry was asked to regulate or be regulated – and so the Telecommunciations Consumer Protections (TCP) Code was developed by the Communications Alliance (CA), and a final draft was registered in late July.

    That TCP Code came into effect on 1 September 2012. If the code proves to be effective, and if the ACMA does as it says it will and come down heavily on those that don’t comply with the TCP Code, there will be significant positive changes for telco customers.

    What the Code provides for.

    The ACMA outlines the basic benefits for consumers in its article Fair call—new telco code to benefit consumers. Here is a breakdown of consumer benefits of the TCP Code:

    • Telco providers must be clear about what they are offering in their phone plans and stop using confusing terms like ‘cap’ (unless the offer refers to a ‘hard cap’—an amount that cannot be exceeded).

    • Better spend management tools designed to avoid ‘bill shock’.Including improvements in billing processes and credit management, and the introduction of notifications about data usage and expenditure thresholds.

    • From 27 September telcos will be required to provide unit pricing for national calls, standard SMS and downloading 1 MB of data in advertisements.

    • From 1 March2013 customers buying a new service will receive a two-page document called the ‘Critical Information Summary’. This includes essential information about service, pricing and complaints-handling, as well as volumetric information so consumers can easily understand how many two-minute calls or texts they can make under their plan.

    • Faster, better complaints-handling, with urgent complaints resolved within two days. All of these new measures will be monitored and the telcos subject to new benchmarking standards.

    • For customers having difficulty paying their bills or meeting unexpectedly high bills, telcos must advise consumers about spend management tools, hardship advice and options to restrict a service.

    • A new industry compliance body is being formed to ensure all industry participants comply with the new code.

    According to IT Wire in its story New telco code toughens up consumer protections, Optus jumped the gun ahead of the introduction of the Code, and launched its new usage alert service which it says gives its customers greater transparency in managing spending on their mobile accounts. The new Optus service sends text alerts to Optus’ customers on most post-paid mobile plans when they reach 50 per cent, 85 per cent and 100 per cent of their voice, text and data allowance.

    IT Wire also reports ACMA Chairman Chris Chapman as saying the ACMA will put the industry on notice, advising they would take a “far more robust approach” to ensure the industry’s compliance with the new Code and had “resourced up in this space.”

    “We will conduct more audits and investigations dealing with key areas of consumer detriment and expect substantial changes in industry practices,” Mr Chapman says.

    For consumers who consider that their service provider is not complying with the code, Chapman says they “may make a complaint to the provider in the first instance and if they are not satisfied with the resolution, they should contact the Telecommunications Industry Ombudsman.”

    And, if telecommunications service providers do not comply with the code, Chapman says they faced a direction to comply from the ACMA, “while further breaches could lead to Federal Court action where civil penalties of up to $250,000 are possible.”

    We will be following these telco improvements with great interest as they relate to the volume of credit file defaults due to telco customer service issues and bill disputes.

    For those consumers currently facing what they consider to be excessive charges, or other issues with their telco which have resulted in bad credit – it is possible MyCRA Credit Rating Repairs may be able to help.

    If a credit listing has been placed unlawfully, it may be required to be removed from the consumer’s credit file. Consumers can contact a credit repair advisor 1300 667 218 to assess their suitability for credit repair. There are no guarantees of success, but the specialised knowledge of credit reporting and industry law means engaging the services of a professional credit repairer gives the consumer the best chance of having bad credit removed completely and permanently from their credit file. Visit the main website for more information www.mycra.com.au.