MyCRA Specialist Credit Repair Lawyers

Tag: credit file

  • New statistics paint positive picture of housing market

    The Federal Government’s announcement of the best economic growth in four years and the prediction that interest rates remain steady for the rest of the year, may be the catalyst for a return to slow but positive growth in the housing market. The Government announced today a 1.2 per cent increase in GDP in the 3 months to June 30.

    The trend is definitely upwards following the latest housing statistics from the Australian Bureau of Statistics. Whilst a minimal increase, and less than expected by economists, the result should still be heartening for the many brokers, investors and home owners alike who have been waiting with bated breath for something positive from the property market.

    Statistics released from the ABS on July’s housing figures show a one per cent rise in home loans for the month which is an improvement on the flat market of the last few months.

    Total housing finance by value rose 1.6 per cent in July, seasonally adjusted, to $20.576 billion. The value of home loans for owner-occupied homes rose 1.4 per cent to $14.4 billion after seasonal adjustments. The value of loans for investment homes rose 1.9 per cent to $6.2 billion.

    The number of commitments to buy new homes fell 0.9 per cent after seasonal adjustments, while commitments to buy established homes rose 1.3 per cent.

    The number of loan commitments for building homes fell 0.8 per cent.

    JULY KEY FIGURES

    Trend estimates
    Seasonally adjusted estimates
    Jul 2011
    Jun 2011 to Jul 2011
    Jul 2011
    Jun 2011 to Jul 2011
    Value of dwelling
    commitments(a)(b)
    $m
    % change
    $m
    % change
    Total dwellings
    20 449
    1.2
    20 576
    1.6
    Owner occupied
    housing
    14 280
    1.5
    14 370
    1.4
    Investment housing –
    fixed loans(c)
    6 169
    0.5
    6 206
    1.9
    Number of dwelling commitments(a)(b)
    no.
    % change
    no.
    % change
    Owner occupied
    housing
    49 548
    1.7
    49 813
    1.0
    Construction of
    dwellings
    4 796
    1.3
    4 757
    -0.8
    Purchase of new
    dwellings
    2 098
    2.3
    2 084
    -0.9
    Purchase of
    established dwellings
    42 654
    1.7
    42 972
    1.3
    (a)
    Includes refinancing (see Glossary).
    (b)
    Excludes alterations and additions.
    (c)
    Excludes revolving credit.

     

    Value of dwelling commitments,
    Total dwellings
    Graph: Value of dwelling commitments, Total dwellings

    No. of dwelling commitments,
    Owner occupied housing
    Graph: No. of dwelling commitments, Owner occupied housing

    Coupled with the small rise in home loans, were statistics released yesterday from the ABS showing household spending has also risen 1 per cent in the

    With this small boost in confidence, will be the need for prospective home owners to ensure they have not been tarnished by the gloomy periods of recent months in respect to their credit file. It would suggest this could be a good time for people to do a credit check, and ensure their credit report comes back clear.

    Whilst the outlook may be positive, it probably hasn’t transferred to banks yet – so they may still require borrowers to have a clear credit file to obtain a mortgage in the current market.

    People should be aware that any repayments which were left late past 60 days may have been listed on their credit file as defaults. This includes any bills which were in dispute.

    People should also be aware that creditors make mistakes when putting listings on credit files all the time. Sometimes it can be a case of mistaken identity, the wrong person ends up with the bad credit rating, sometimes it can be a change in address which causes the adverse listing, or simple computer error. So it is worth doing a free check every 12 months, even if people think they should have no adverse listings on their credit file.

    It is the credit file holder’s responsibility to obtain a credit report from the credit reporting agencies and ensure their credit file is as it should be. Contrary to popular belief, if the credit report shows inconsistencies, people do have the right to have them removed. If a listing has been put there in error, it is possible to have it removed – NOT JUST MARKED AS PAID. For those people who were previously unable to obtain a mortgage due to credit file defaults this may open a door they thought was closed for 5 years (the term of a default).

    For more information on how to check credit files, and for help with credit rating repair, visit MyCRA Credit Repairs website.

  • Fraudsters target overseas-based property owners

    Identity theft appears to be the new black in criminal circles. Perhaps there has never been a better time to commit identity theft. Opportunity is high, awareness is still fairly low, and prevention of this crime unfortunately seems to be reactionary-based as fraudsters think up bigger and better ways of gaining access to people’s good names.

    Recently the West Australian Government announced details of a property scam which has presented itself in Western Australia.

    Police are investigating a scam in which properties are sold by fraudsters without the knowledge of the overseas-based owners. Last year, Wembley Downs retiree Roger Mildenhall had his Karrinyup investment property sold without knowing anything about it. But more recently, it is alleged that Nigerian-based scammers sold a Ballajura property without the owners’ knowledge.

    “A couple returning from overseas have advised authorities that their property has been sold without their knowledge or consent and a joint investigation has been launched.

    The previous owners were living and working overseas at the time and didn’t discover the property had been sold until they recently returned to Perth to inspect the property.

    The real estate agent involved has told investigators that he received a phone call from a man claiming to be the owner in February this year inquiring about the property. Shortly after, the agent received an urgent request to sell the property as funds were needed for a business investment, later revealed to be a supposed petro-chemical project,” Landgate announced in a statement earlier this month.

    The West Australian Newspaper last week reported the WA Government has upgraded its security measures for overseas-based property owners.

    “WA property owners living abroad who are concerned about identity theft can now lodge a caveat over their property to reduce the risk of being targeted by scammers, under a raft of anti-fraud measures introduced by Landgate.

    Lands Minister Brendon Grylls said yesterday Landgate would expand its TitleWatch service so homeowners can receive email alerts notifying them of any activity on the title deeds of their nominated property. Overseas-based property owners can pay $160 to lodge a new caveat on their property to prevent registration of a change of ownership, mortgage or lease.

    They could remove the caveat only by attending Landgate’s Midland office in person and completing a 100-point identity check, Mr Grylls said…
    Under the range of increased security measures, all transfers of land executed overseas will now require a 100-point identity check, signatures to be witnessed by an Australian Consular officer and the sales will need to be independently checked by at least two senior Landgate officers.

    “It is important that we continue to move to ensure that a person’s No. 1 asset is protected,” Mr Grylls said.

    Property owners and Real Estate agents in every state need to be aware that overseas-based property scams are occurring, and to arm themselves with preventative measures to protect against identity fraud.

    The other property scam to watch out for is the fake rental property scam. The ACCC’s SCAMwatch website warns individuals about responding to property advertisements, as there have been reported incidents of scams in the community.

    “SCAMwatch is warning prospective tenants to be wary when responding to rental properties advertised on the net where the ‘owner’ makes various excuses as to why you can’t inspect the property but insists on an upfront payment for rent or deposit.

    Scammers will often use various shared accommodation sites to post these fake listings. They will go to great lengths to ensure that the offer looks genuine by including photos and real addresses of properties. However, photos and details of properties can be easily obtained on the internet.

    Once hooked, the scammer will request money, often via money transfer, or personal details upfront to ‘secure’ the rental property. SCAMwatch warns consumers not to send money or provide personal details to people you don’t know and trust.”

    Long term affect for victims

    Fraudsters now see personal information as a valuable commodity. Many are able to use that information to take out credit in the victim’s name. Often the victim is not alerted to the misuse of their credit file for some time, often not until they attempt to obtain credit themselves. By then, victims may have credit applications as a minimum and possibly defaults, mortgages and mobile phones attributed to them incorrectly.

    Once any account remains unpaid past 60 days, the debt may be listed by the creditor as a default on a person’s credit file. Under current Australian legislation, defaults remain listed on the victim’s credit file for a 5 year period.

    If a victim has defaults on their credit file following identity theft – the defaults still remain there for 5 years. The onus is then on the identity theft victim to prove to creditors they didn’t initiate the debts in their name. If they are unable to prove this, they are virtually blacklisted from obtaining further credit themselves for 5 years.

    It is important for everyone to think twice about who they allow to have access to their personal information, and to verify all transactions are legitimate before handing over their details or any money. SCAMwatch has these suggestions:

    How to protect yourself

    * Insist on inspecting the property- a drive-by is not enough. With these types of scams, the property may genuinely exist, but it is owned by someone else.
    * If it is overseas, ask someone you can trust to make inquiries. If there is a real estate agent or similar in the area they may be able to assist.
    * Do not rely on any information provided to you from anyone recommended by the person advertising the property.
    * An internet search on the name of the person offering the property and their email address may provide useful information.
    * Where possible, avoid paying via money transfer. It is rare to recover money sent this way.
    * There are many share accommodation websites, consider choosing the ones with clear warnings about scams or which offer added protection.
    If you are satisfied that the offer is legitimate and decide to accept it, keep copies of all correspondence, banking details and the listing itself.

    For more information on identity theft prevention, or help with credit repair following identity theft, contact MyCRA Credit Repairs.

    Image: vichie81 / FreeDigitalPhotos.net

     

     

  • 7 ways to improve your credit rating in Australia

    There are countless pieces of advice available to people out there, aimed at offering to ‘improve your credit rating’ or ‘fix your credit score’, and they are read by many people hoping to get the best chance of approval for home loans, personal loans or other forms of credit.

    What many Australians don’t realise when they read these articles is that many of them are written in countries like the U.S. and U.K., whose credit reporting systems are very different from Australia’s. So the information, whilst good, often doesn’t apply for people in this country.

    In fact, many times if Australians follow that information they may actually be hindering their chances of obtaining credit in the current market, not helping it.
    So here is some information for people concerned about their credit rating, to have as a reference for what applies in this country.

    What exactly is my credit file?

    A credit file is made for every person who is credit active in Australia. Veda Advantage, Dun & Bradstreet, Tasmanian Collection Service (if Tasmanian) and new entrant Experian may all hold information on credit active individuals.

    A person’s credit file contains their personal information. It also records any credit applications, all loans which are current and also records any adverse listings such as Defaults, Writs, Judgments, Clear-outs or Bankruptcies which are under that person’s name.

    It is from this file that creditors make a decision whether or not to lend people money. This information is then available to banks and building societies; finance companies like GE and Avco; mobile phone companies and retail stores like Myer, Harvey Norman and Wow Sight & Sound.  These companies are all known as credit providers or creditors.

    What many people aren’t aware of is that any creditor may place an adverse listing on a person’s credit file if the account has remained unpaid past 60 days. This includes phone companies, utility companies, and gyms as well as banks, finance companies and stores – and the outstanding amount can be for as little as $100.

    A negative credit reporting system

    Currently Australian credit reporting system is a ‘negative’ system. This will change as Australia moves towards positive credit reporting, but until then – the rules of the game are very different from many other countries. Only negative data is recorded on a person’s credit file. From this point of view – there is nothing people can do to counter-balance any negative data which is displayed on their credit file. It is either present – or not.

    So is there anything I can do to change my bad credit rating?

    YES AND NO! There is no ‘score’ as such in Australia. So a person’s credit file is what it is with all adverse listings displayed for creditors to consider, and no amount of ‘positive’ credit information can currently change that. Under Australia’s credit reporting laws these adverse listings have a set time frame they must be listed for. This is 5-7 years depending on the type of listing. Unfortunately most adverse listings guarantee automatic decline on credit approval in the current market. Adverse listings are not removed ahead of time, but a creditor will mark the listing as paid if the account has been settled.

    However, if a person’s credit rating contains listings which should not be there, or there are errors, the credit file holder does have the right to have this information rectified.

    5 ways to improve your chances of obtaining credit under Australia’s credit reporting system:

    1. Reduce credit limits.

    Lofty credit limits do not improve a person’s credit ‘rating’. If the loan applicant has a credit limit of say $20,000 on their credit card, the debt amount on that card will be calculated on $20,000 – even if the actual amount the applicant has owing on that card is only $5,000. So a potential borrower should seek to reduce any credit limits on cards or loans they currently hold.

    2. Reduce credit enquiries.

    Do not shop around for credit. Whenever a person other than the credit file holder makes an enquiry on their credit record – that enquiry is recorded on the person’s 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 home loan applications due to too many credit enquiries, such as two enquiries within thirty days or six within the year.

    3. Check credit file.

    Anyone has the right to request a copy of their credit file, to see what is being said about them. This report is free for the credit file holder every 12 months. The request should be made to all the applicable credit reporting agencies, and a report will be made to the credit file holder within 10 working days.
    There is the potential for creditors to make mistakes when entering listings on credit files. So anyone who is credit active should check theirs, regardless of how diligent they think they may have been with their repayments.

    A small scale study conducted by the Australian Consumer Association (now Choice Magazine) in 2004, revealed a staggering 30% of credit files were likely to contain errors.

    “In our view, there are serious, systematic flaws which are leaving an increasing number of Australian consumers vulnerable to defamation, mis-matching and harassment,” the report said.

    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 credit and are refused. 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.

    4. Pay any outstanding amounts.

    If a credit file check reveals outstanding amounts on a person’s credit file, paying them can be of benefit to a person’s credit rating. Whilst the creditor cannot remove the listing, they can mark the listing as paid, which in some cases could improve people’s chances of obtaining credit.

    5. Remove errors.

    Unfortunately listings are not removed by creditors unless the credit file holder 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.

    If people have neither the time, knowledge or patience for credit repair they can seek out a reputable credit repairer who will be able to work on their behalf to negotiate with creditors to have the defaults removed if there are errors.

    A clear credit record can allow potential borrowers the option to choose the best loan to suit them, with the best interest rate.

    6. Make repayments on time.

    Repay any bills received by the due date. Repay over the minimum amount required on credit cards. If people are having trouble paying on time, they should contact the creditor as they may be able to work out a payment plan rather than listing the non-payment as a default. If people are disputing bills with creditors, they should still pay the bill by the due date. Better to be reimbursed the outstanding amount than have the creditor put a default on their credit file in the process.

    7. Show stability.

    Having a stable address, stable income and stable employment can all improve someone’s chances of obtaining credit. Right before someone applies for a home loan is not the time to change jobs – regardless of how good the wages are.

    Interestingly, many errors in credit reporting occur when people change addresses, so keeping a stable address can also decrease the likelihood of bills going to the wrong address and defaults being placed on a person’s credit file unnecessarily.
    People can visit the MyCRA Credit Repairs website for more help with their credit rating, and help to repair a bad credit rating.

    Image: vichie81 / FreeDigitalPhotos.net

  • Is your smartphone use increasing your risk of identity theft?

    A recent survey found that over half of all mobile phone users own a smartphone.  The survey conducted by TNS Mobile Life found 52% of mobile users own a smartphone device, which is an increase of 24 per cent from 2010.

    But unfortunately fraudsters are also aware of this. People should be wary about the possible risks to the security of their personal information when they are using their smartphone.

    The fact that people are using these devices to log in to social networking, use email, download applications and access bank accounts means they also need to be careful they are not opening the door to identity theft. This could leave them hugely out of pocket, and potentially ruin their credit rating.

    Security firm Earthwave Managed Services guest blogged on CSO this week, and warned readers about emerging identity theft risks with smartphones.

    “The smartphones of today don’t just make calls and take pictures. They serve as handheld PC’s and can potentially provide a thief with enough information about your online presence so that further theft of finances and identity can occur,” the firm says.

    Earthwave says the same types of malicious malware and viruses that are present on home computers are being directed to smart phones, but there is a gap in adequate security in this area. Here’s how they say people’s personal information can be compromised:

    “The malware could be injected using a PDF document, an image on a website, an e-mail or even embedded in webpage code. While the PC and notebook fall victim to the same attacks, the smartphone is even more vulnerable due to sluggish software development and user naivety…

    “The hype surrounding the app-race gives attackers another means of entry – App Stores. Cyber criminals can code apps which include malware with the aim of gaining anonymous and complete access to the data residing on the phone,” the firm says.

    Earthwave says people should adhere to the same security practices as those applied to their notebook to prevent smartphone identity theft. They suggest four security measures to take:

    1. Install firmware updates that resolve security issues.
    2. Always use strong passwords and stay vigilant with your email and web browsing.
    3. Always be extremely careful what information you provide on social networking sites
    4. Configure websites containing personal or financial information to be encrypted for the entire session, if the site provides this functionality.

    Identity theft can be devastating for the victim, and many times they face an uphill battle with their credit rating following it. If the crime is sophisticated – as could be the case with malware-generated identity theft, the virtual stealing of someone’s good name can go undetected for a significant time.

    Often it is not until the victim applies for credit somewhere and is refused that they realise their personal information has been stolen and identity fraud has been committed against them. People may have credit applications as a minimum and possibly defaults, mortgages and mobile phones attributed to them incorrectly.

    Once any account remains unpaid past 60 days, the debt may be listed by the creditor as a default on a person’s credit file. Under current Australian legislation, defaults remain listed on the victim’s credit file for a 5 year period.

    What is not widely known is how difficult recovery from identity theft can be. Unfortunately there is no guarantee defaults can be removed from a person’s credit file. The onus is on the identity theft victim to prove to creditors they didn’t initiate the debts. But for the victim who is virtually robbed of their financial freedom, it is a point worth fighting for.

    For more information on identity theft, or for help with credit repair following identity theft, visit the MyCRA Credit Repairs website.

    Image: Salvator Vuono / FreeDigitalPhotos.net

  • Found a better home loan? Check your credit file before applying to refinance

    Media Release

    25 August 2011

    Home owners refinancing in the wake of the government’s scrapping of home loan exit fees should consider the health of their credit file before they make a new application, according to a national credit repairer.

    Director of MyCRA Credit Repairs, Graham Doessel says existing home owners should exercise their right to a free credit report from the major credit reporting agencies prior to making any enquiries on a new home loan.

    “People who already have a mortgage probably haven’t considered how important a clear credit rating is – even second time around. Regardless of whether people have been diligent payers, creditors can and do sometimes make mistakes with people’s credit files and some people end up with black marks against their name that shouldn’t be there,” Mr Doessel says.

    A bad credit rating can result when a bill or repayment goes unpaid past 60 days. After this time, a creditor has the right to list that non-payment as a default on the person’s credit file.

    “In the current finance market, any black mark generally results in an automatic decline with the major lenders. Even too many credit enquiries can blow someone’s chances of finance approval, so it really is important for people to know what is said about them on their credit report before they go in to refinance,” Mr Doessel says.

    This comes as The Telegraph reported earlier this month existing home owners are staying put and refinancing in high levels.

    It reported mortgage broker Australian Finance Group’s figures of about 39 per cent of their July mortgages were from people refinancing. AFG attributed this trend to the major banks competing very aggressively on fees and price since exit fees were banned.

    “If you have a home loan at the moment, it’s the best time in 20 years to be looking for a better deal,” AFG spokesman Mark Hewitt said.

    Mr Doessel says many of his clients have been in the middle of refinancing, whether to reduce their repayments or to get a better deal – when the bank has performed a credit check and found defaults against their name.

    “Sometimes people don’t know their good name is compromised until they apply for finance and are refused. Many times if they had checked their credit file they may have had the chance to rectify any errors or save themselves the embarrassment prior to applying for the loan,” he says.

    Mr Doessel says approximately 63% of the clients who contact his company for credit repair would be people who have defaults, writs or Judgments which are listed in error on their credit file.

    “We have clients who are facing identity theft; some are caught in issues over separation from their spouse; some have been disputing a bill which went to default stage and many people are just victims of the fallout from inadequate billing procedures – wrong names, wrong addresses, human and computer errors,” he says.

    Under current credit reporting legislation, consumers have the right to a free credit report from the credit reporting agencies once a year.

    People need to contact all the credit reporting agencies to request their report – as creditors have access to 3 agencies within mainland Australia and 4 in Tasmania. The report must be provided to them in writing within 10 days of the request.

    Consumers also have the right to have any inconsistencies on their credit file rectified.  Defaults can be marked as paid if the account has been settled.

    But Mr Doessel says listings are not removed by creditors unless the file holder can provide adequate reason and lots of evidence as to why the listing should not be there.

    “Credit repair requires knowledge of the legislation, lots of evidence and perseverance. But for those people whose financial freedom is hindered because their credit file contains errors, it is a point worth fighting for,” he says.

    /ENDS
    Please contact:
    Lisa Brewster – Media Relations   Mob: 0450 554 007 media@mycra.com.au

    Graham Doessel – Director  (07) 3124 7133 http://www.mycra.com.au

    MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Link: http://www.dailytelegraph.com.au/money/better-mortgage-deals-beckon-as-banks-create-more-deals/story-e6frezc0-1226108846876

    Image: renjith krishnan / FreeDigitalPhotos.net

  • Australian PlayStation users given free identity theft protection for a year

    Finally Sony has recognised the possible threat that was made to the personal information of its 1.5 million Australian PlayStation users. After one of the world’s biggest data breaches occurred on the PlayStation Network in April, Sony has come to the party with an offer of free identity protection for the year.

    The Sydney Morning Herald reports about this in its story ‘Sony offers free ID theft protection to Aussies.’

    The package includes “CyberAgent Internet Surveillance”, whereby CS Identity’s technology scours the internet for unauthorised use of your identity. The firm conducts 24/7 monitoring of criminal web pages, chat rooms, bulletin boards and file sharing sites to identify trading or selling of customers’ personal information.

    Identity restoration is also included, which involves the firm helping customers restore their identity after becoming the victim of identity theft.
    The data stolen during the breach includes names, gender, addresses, email addresses, birthdays and login passwords for Sony’s PlayStation Network and its Qriocity music streaming service.

    All up 1,560,791 Australian accounts were affected – 280,000 of which had credit card details. This is a fraction of the 77 million total accounts exposed worldwide.

    Security experts have warned that even without credit card details, hackers could use the other stolen details to construct highly targeted and believable attacks designed to steal more personal information and/or infect computers.

    The SMH says the Australian Privacy Commissioner, Timothy Pilgrim, has been investigating the breach, and they say it is still ongoing. In May we blogged about Australia’s Privacy Laws, as they relate to data breaches.

    The Government is set to introduce tougher Privacy Laws following this data breach. One of which will be mandatory notification laws, helping to protect Australians from identity theft following any future data breaches, and another which will allow victims of identity theft following a data breach to be able to obtain some kind of compensation for any loss they may receive.

    The Sydney Morning Herald recently reported one in 10 Australians who use the internet have lost money to online identity fraud over the past year, according to VeriSign Authentification Services. We recently blogged that these fraud figures have doubled since 2007. The cost of this is estimated to be $1.286 billion during the past year.

    But the real cost of identity theft comes when a person’s credit file is impaired. When identity theft affects people’s credit files there is no reimbursement for losing the money they could borrow. But victims often lose their dream home, can’t borrow for their business and can’t get the new car they wanted.

    Often victims don’t know about the fraud until they apply for credit and are refused because they have a bad credit rating.

    Image: Arvin Balaraman / FreeDigitalPhotos.net

  • Parents’ lack of cyber-knowledge can lead to identity theft

    Media Release

    22 August 2011

    Parents who hand over control of the home computer to their children due to a lack of their own technical knowledge are putting their personal information and their good name at risk, a national credit rating repairer warns.

    Director of MyCRA Credit Repairs, Graham Doessel says experience is showing us the ‘set and forget’ mentality of installing anti-virus software, and leaving the rest to our children is simply not effective in combating the current level of cyber-crime which is resulting in identity theft.

    “Every day there’s more and more reported cases of online identity theft. Criminals can gain access to personal information in a host of ways, in order to commit identity fraud in the victim’s name. To expect our children to be able to effectively protect us and themselves against this crime is asking too much of them,” Mr Doessel says.

    This comes as a recent Cyber-Survey commissioned by Telstra reveals more than one in three parents of children aged 10-17 admit their offspring’s tech skills exceed their own.

    Darren Kane, Telstra’s Internet Trust and Safety Officer says Telstra’s inaugural Cyber-Safety Indicator shows more than 87 per cent of young people use the internet at least once a day, with almost half spending at least three hours a week on social networking sites.

    “The research shows that a gap in technology skills is leading parents to believe that they are less capable of understanding how their kids might be exposing themselves to online risks such as cyber-bullying and identity theft,” Mr Kane says.

    Mr Doessel says there is a real danger for children in downloading viruses, participating in scams, releasing credit card details and disclosing personal information and passwords to criminals. But he says this can all be minimised by parents taking an active role in their child’s internet use, and constantly updating their own cyber-awareness.

    “Identity theft is the fastest growing crime in Australia and parents need a major update on their own knowledge of cyber-safety if they expect to be able to stay one step ahead of both their children and cyber-criminals,” he says.

    The survey also showed mixed views on social networking: 36 per cent of parents trust their child’s use of social networking sites, while a quarter admit to worrying about them posting personal information online and 15 per cent worry about who their children talk to and what they talk about.

    Mr Doessel says fraudsters are often extremely good at extracting personal information from people, and sites like Facebook are the perfect avenue for doing this.

    “The amount of personal information that many young people have freely available for viewing on Facebook is frightening. We may say it is harmless, but what’s to say fraudsters can’t sit on that information and wait until their victims come of age to commit fraud in their name?”

    “Fraudsters are also looking for credit card details, passwords and bank details to commit identity theft. The security of these details can all be compromised with the constant onslaught of viruses attacking the computers of most Australians these days,” he says.

    Mr Doessel says a major downfall to being an identity theft victim is not only the initial loss of monies, but if the fraud sees accounts in the victim’s name going undetected and unpaid past 60 days, a person’s credit rating can be ruined for 5-7 years due to defaults.

    “It need not be major fraud to be a massive blow to the identity theft victim. Unpaid accounts for as little as $100 can have the same negative impact on someone’s ability to obtain credit as a missed mortgage payment. So any misuse of someone’s credit file can be extremely significant,” he says.

    For parents who want to educate themselves on cyber-crime, Mr Doessel recommends good places to start are the Government’s Stay Smart Online(www.staysmartonline.gov.au), and Cyber Smart websites (www.cybersmart.gov.au).

    The Government recommends the close monitoring of all children’s internet use. Some of the other recommendations it makes include:

    • Be aware of and involved in children’s internet use. Bookmark a list of ‘favourites’ for them. Encourage children to share new websites and explore together. Assist them whenever they need to disclose personal information.
    • Talk to children about personal information and why it is special.
    • Consider creating a family ‘fun’ email account separate from all other accounts for the child’s use. This way it can be deleted if misused.
    • Consider using filters, labels and safe zones to manage children’s online access.
    • Install and update anti-virus and other e-security software to restrict unauthorised access to data on the home computer and protect that data from corruption. Turn firewall on, set computer to automatic scan and update regularly.

    If people suspect identity theft has affected their credit file, they can contact MyCRA Credit Repairs www.mycra.com.au.

    /ENDS

    Please contact:

    Lisa Brewster – Media Relations   Mob: 0450 554 007  media@mycra.com.au

    Graham Doessel – Director  07 3124 7133

    http://www.mycra.com.au MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Links:

    http://www.telstra.com.au/abouttelstra/media-centre/announcements/parents-say-tech-skills-are-a-barrier-to-keeping-kids-cyber-safe.xml
    http://www.cybersmart.gov.au/Parents/Cybersafety%20issues/Protecting%20personal%20information/Identity%20theft.aspx

    Image: Michal Marcol / FreeDigitalPhotos.net

  • Government warning about Facebook scams

    It was only going to be a matter of time before identity thieves would target their victims through scams on social networking site Facebook.

    South Australian Minister for Consumer Affairs, Gail Gago has issued a warning statement for people about new methods of scams which she says are very advanced.

    “Social media has played a role in enabling scammers to disguise themselves as legitimate companies or individuals to persuade victims to hand over money or personal details…With more consumers purchasing goods online, there now is a greater risk that a consumer could become a victim of identity theft. Scammers use this as an opportunity to offer non-existent goods ranging from puppy dogs to motor vehicles to con unsuspecting customers,” she says.

    The Federal Government’s Stay Smart Online explains how scams are perpetrated on Facebook. They say when data is shared between people who know each other, there is a higher level of trust and fraudsters are taking advantage of this. They try and get victims to click on links or give over information. Ultimately the purpose is to generate revenue for the fraudsters; they may use a number of techniques including using malicious software to take control over your computer, and/or steal people’s information.

    Not widely known, is just how far fraudsters may be able to go with the information they receive from their unsuspecting victims. Bank account or credit card details, when received in conjunction with the other information displayed on social networking sites like Facebook can end up being a recipe for disaster for people’s credit ratings.

    Fraudsters may be able to use those details to take out credit in the victim’s name. Identity fraud can often go undetected, until the victim applies for credit and is refused due to defaults they had no idea about.

    Credit rating defaults stick for 5 years, and for anyone who has lived with a black mark on their credit file, they are virtually banned from most credit for 5 years. This includes major credit through to mobile phone plans.

    Just because someone claims to be a victim of identity theft, it doesn’t automatically guarantee they will have their good name restored. Lengthy negotiation with creditors often ensues, with the victim requiring copious amounts of evidence and usually police reports to prove the case of identity theft.

    So it is important to heed the almost daily warnings of scams we hear about, in order to stay one step ahead of what can be a very damaging crime.

    The Premier’s office cites these top five scams reported in South Australia for the last financial year:

    • Computer (PC) virus checks: An individual phones, claiming they are a certified computer engineer and convinces the consumer their computer has a virus. The consumer allows the scammer access to their hard-drive leaving personal details exposed.

    • “Nigerian” and similar scams: Consumers are promised huge rewards if they help someone to transfer money out of their country by paying fees or releasing their bank account details.

    • Overseas lotteries: Consumers receive a letter from an overseas lottery or sweepstakes company claiming the consumer has won money or prizes, and then asks the consumer to pay a fee to release the winnings, or to provide personal details.

    • False billing (blowing): Targets small businesses who receive a bogus bill for a listing or advertisement of their business in a publication they never appeared in.

    • Employment scams: Consumers are offered employment in non-existent markets. Scammers claim CVs will be considered upon payment of a fee to process the application, with the consumer usually not receiving a response and being left out of pocket.

    Consumers are urged to report any suspected scam to the ACCC via the SCAMwatch website www.scamwatch.gov.au or call the information line on 1300 302 502.

    We recommend all internet users subscribe to the government’s Stay Smart Online alerts for advice on new scams and viruses which may affect their computer and threaten their good name.

    If people have already been a victim of a scam, and they want help with credit repair, contact MyCRA Credit Repairs. We permanently remove defaults from credit files.

    Image: Master isolated / FreeDigitalPhotos.net

  • Phone bill complaints – the dangers for your credit rating

    Media Release

    15 August 2011

    Customers who are fed up with the process of disputing their phone or internet bills are warned they still need to follow the system to avoid finding themselves with a bad credit rating, according to a national credit file repairer.

    Director of MyCRA Credit Repairs, Graham Doessel says when disputing bills with Telco providers, people make two common mistakes which can cost them their good credit rating unnecessarily.

    “Phone companies make mistakes with billing all the time, and undoubtedly some of those mistakes are difficult to resolve. Where their customers go wrong, is assuming just because they have spoken to someone on the phone about the bill, they are no longer obliged to comply with its due date.”

    “Consumers also need to ensure when they are disputing a bill, they obtain any resolution in writing before assuming the matter is fixed,” Mr Doessel says.

    Under current legislation, an account which is more than 60 days in arrears can be listed by the creditor as being unpaid on the customer’s credit file. This is regardless of whether the customer believes there are errors in the details of the bill or with the payment amount.

    This comes as the Telecommunications Industry Ombudsman reveals unhappy customers experience repeated and time consuming contact with Telcos before referring their matter to the TIO.

    The TIO released findings from its research paper, Resilient Consumers, on Friday, a survey of more than 500 consumers who lodged complaints between July and August 2010.

    The survey revealed more than half of consumers reported contact with their service providers five or more times before ringing the TIO. It also revealed most consumers reported spending three hours or more unsuccessfully trying to solve their complaint, with one in 5 saying they spent more than nine hours.

    “Consumers who come to the TIO report spending substantial time and effort solving their complaints,” said Ombudsman Simon Cohen. “They report being transferred from department to department, not being transferred to supervisors and, perhaps most frustratingly, getting no solution or a broken promise for their efforts. They are – by any measure – resilient consumers.”

    Mr Doessel says unresolved bill disputes with Telcos, where people end up with defaults on their credit rating would make up about one-third of his clients.

    “Many clients get nowhere trying to dispute the bill with the phone company, and end up copping a default on the chin if they refuse to pay the bill.”

    “Some also believe the matter has been resolved. It is not until they apply for credit in a different circumstance that they realise the Telco has placed a default on their credit record,” he says.

    Defaults remain on a person’s credit file for 5 years. Under current legislation, defaults generally do not get removed from an individual’s credit file, but can be marked as paid if they have been paid.

    “Currently, defaults – even those that are marked as ‘paid’, will prevent you from obtaining a home loan with most lenders. In fact, even having a few too many credit enquiries can be enough for an automatic decline” he says.

    Mr Doessel says many people are unfairly penalised with a bad credit rating when the matter could have been dealt with better by the Telco in the first place.

    “It is astounding the number of Telco credit file listings which contain errors, or have been put there unjustly or unfairly. Under current legislation, people do have the right to have credit file discrepancies resolved. But unfortunately it can be difficult for customers if they are not aware of the appropriate legislation and don’t have time to negotiate with creditors,” he says.

    MyCRA Credit Repairs outlines the process they recommend people should take when disputing a bill in Australia:

    1. Contact the bill provider as soon as you receive the bill and attempt to resolve the discrepancy.
    2. Make a note of the name of each person you speak to. Note any resolutions that were reached and request those be sent to you in writing.
    3. If the credit provider fails to honour the discrepancy, advise them you will be contacting the appropriate ombudsman.
    4. If the due date for the bill approaches and the issue has not been resolved, pay the bill by the due date. You can seek reimbursement at a later date, but this will prevent a default for that bill being listed on your credit file.
    5. Hang in there, play by the rules of the game and you should find your matter sorted out eventually. But at least once the matter is sorted out you aren’t left attempting to remove a default on your credit file as well.

    / ENDS

    Please contact:
    Lisa Brewster – Media Relations   Mob: 0450 554 007 media@mycra.com.au

    Graham Doessel – Director Ph: 3124 7133 http://www.mycra.com.au/

    MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Links:

    http://www.tio.com.au/media_statements/RELEASES/2011/08_12_Resilient_Consumers_Report.html

    Image: Danilo Rizzuti / FreeDigitalPhotos.net

  • Tax file number fraud almost doubled since last year

    MEDIA RELEASE

    8 August 2011

    Tax payers should be on the lookout for a scam designed to extract tax file numbers for the purpose of identity fraud, which could leave their bank accounts empty and their credit files ineffective for up to five years, a national credit repairer warns.

    Director of MyCRA Credit Repairs, Graham Doessel says if people fall victim to this particular type of identity theft, they are at a high risk of having their credit file misused.

    “A person’s tax file number is like the key to their credit file. If fraudsters are able to obtain this number, they have a crucial piece of information for building a duplicate identity in the victim’s name,” Mr Doessel says.

    Mr Doessel says social networking sites like Facebook have made it easier for fraudsters to obtain the extra personal information a criminal could need for identity fraud.

    “People post a whole host of information about themselves on sites like Facebook, MySpace and Twitter, but people need to think – what would a criminal do with this information? If fraudsters already have a person’s tax file number, a simple check on Facebook for a date of birth can give them the tools they need to request replacement copies of personal documents, and use those documents to take out credit – even mortgage homes in the victim’s name,” he says.

    This comes as The Telegraph reported yesterday that the practice of stealing tax file numbers has almost doubled in the past year, from 12,669 to 31,200 from the previous year.

    The number of complaints made to the Commonwealth Ombudsman about the Australia Tax Office also increased almost 40 per cent, largely because of the stolen TFNs.

    It reported that techniques to steal someone’s TFN include bogus approaches by phone calls, emails, letters, websites and text messages. People who share the same name and birthday are also in the “at risk” category.

    The Government issued an alert on its Stay Smart Online  website following the 2010 financial year about bogus emails from the ATO specific to e-tax.

    “New fraudulent emails are circulating which pretend to be from the Australian Tax Office. Using social engineering tricks the criminals behind these emails try to trick you into providing personal information as a pretext to receiving a tax refund. This personal information can be used by the criminals to steal your identity,” the alert says.

    The Telegraph reported an ATO spokeswoman as saying stolen TFNs and identity theft was a big problem – the effects could last for years and were a nightmare to clean up.

    “When an identity is stolen it can take a long time to put everything right,” she said. “A person can face financial problems if someone commits fraud or other crimes using your identity.

    Other impacts may be experienced in getting a job, a bank loan or other credit, renting a house or a car, or applying for government services or benefits.”She said the ATO had established a “client identity support centre” to assist people whose identities were stolen.

    Mr Doessel says identity fraud can often go undetected until the victim applies for credit and is refused.

    “The fraudster could abuse someone’s good name all over town and it is not until the victim applies for credit and is refused, that they learn about the identity theft and subsequent fraud,” Mr Doessel says.

    Any kind of credit account (from mortgages and credit cards through to mobile phone accounts) which remains unpaid past 60 days can be listed as a default by creditors on the victim’s credit rating, and those defaults remain there for 5 years.

    Mr Doessel says the consequence of people having a black mark on their credit rating is generally an inability to obtain credit.

    “Most of the major banks refuse credit to people who have defaults, or even too many credit enquiries, so it is really essential to keep a clean credit record,” he says.

    By law in Australia, if a listing contains inconsistencies the credit file holder has the right to negotiate their amendment or removal.

    “To clear their good name, the identity theft victim needs to prove to creditors they did not initiate the credit – which can be difficult. Not only are victims generally required to produce police reports, but large amounts of documentary evidence to substantiate to creditors the case of identity theft,” Mr Doessel says.

    Contact www.mycra.com.au for more details on credit repair following identity theft.

    /ENDS

    Please contact:
    Lisa Brewster – Media Relations   Mob: 0450554 007 media@mycra.com.au

    MyCRA Credit Repairs is Australia’s leader in credit rating repairs. We permanently remove defaults from credit files.

    Links

    http://www.dailytelegraph.com.au/news/sydney-nsw/big-new-crime-is-to-steal-you/story-fn7y9brv-1226109959920

    http://www.ssoalertservice.net.au/view/8cba427852e2faa582ca0ed3391cfcd3

    Image: nuttakit/ FreeDigitalPhotos.net

     

  • Australians are reigning in their debts and focusing on home ownership

    Recent information from the Australian Bureau of Statistics reveals that Australians are putting the focus back on to borrowing for home ownership. Figures show owner occupied housing has stabilised and slightly increased, but that people are borrowing less for other personal reasons and investing less.

    Here are key figures from the ABS Lending Finance report from June.

    JUNE KEY FIGURES

    May 2011 Jun 2011 May 2011 to Jun 2011
    $m $m % change
    TREND ESTIMATES
    Housing finance for owner occupation(a) 13 752 13 882 0.9
    Personal finance 6 852 6 891 0.6
    Commercial finance 30 544 30 443 -0.3
    Lease finance 401 394 -1.7
    SEASONALLY ADJUSTED ESTIMATES
    Housing finance for owner occupation(a) 14 131 14 127 0.0
    Personal finance 7 050 6 993 -0.8
    Commercial finance 31 984 29 897 -6.5
    Lease finance 403 374 -7.2
    (a) Excludes alterations and additions

     

    With personal finance declining, this may be a reflection that more people than ever are using credit wisely. Perhaps less people are caught in the cycle of borrowing too much for non-appreciating goods.

    With the focus back on to owner-occupied housing – it will be beneficial for people to ensure their credit file accurately reflects their ability to repay debt. Especially considering lenders are still making it fairly tough for people to secure a loan.

    If people have defaults, writs or Judgments on their credit file, generally they are denied access to a home loan in the current market, regardless of their savings record or wage. This can be devastating. Adverse listings remain on the credit file for 5 years – so something a person experienced 4 years ago can still have a major impact on them today.

    Often people only find out about their bad credit rating when they have emotionally, legally and financially committed to a house contract. Typically all the approvals are set to go, and it is not until the credit check that it is revealed that their credit record contains defaults, meaning their home loan is declined.

    If only they had known that under current legislation in Australia, they could conduct a FREE credit file check with each credit reporting agency once a year! They could have done this prior to looking for a home, and would have been alerted to the adverse listings, and been able to deal with any inconsistencies before the matter was urgent.

    If people find listings on their credit file which are incorrect, contain errors within the listing, or are unjust and simply shouldn’t be there they do have the right to have them removed. The problem is this process can be time consuming – and borrowers can often lose the house they have under contract.

    Many clients say “fixing my bad credit is the most difficult thing I have ever tried to do.” This is because the onus is on the credit file holder to prove the inaccuracy of the listing, and negotiate its removal. Many creditors saying that they will only mark the listing as paid and will not remove the default. But this is not enough to ensure finance approval in most cases.

    But people should know, that with the right tools there is a good chance their credit file can be completely cleared.

    So what can house hunters do to improve their chances of loan approval?

    Apart from save like mad and have a good steady income…

    (1) Obtain a copy of their credit file

    (2) Check for any inaccuracies

    (3) If there are errors, negotiate with creditors to remove the default/s, or contact a credit repair company for default removal

    (4) Apply for a home loan with a clear credit rating and be provided the choice of a selection of home loans at the best interest rate on offer today.

    Contact MyCRA Credit Repairs for information on credit repair.

    Image: jscreationzs / FreeDigitalPhotos.net

  • Ordinary Australians are most at risk of identity theft

    A leading commentator on technology issues, Stilgherrian has warned readers of ABC’s opinion column ‘The Drum’ that the idea perpetuated by the media that identity theft is mostly a risk for governments and big business is masking the more significant occurences of identity theft to individuals in Australia and the world.

    “Indeed, the stories that get reported are chosen precisely because they can provide simple narratives and archetypical characters with clear motives, not because they’re significant battles in the perpetual cops-versus-crims war for control of the internet,” he says.

    Stilgherrian says the real truth of identity theft is that the typical victim is an ordinary person who has fallen prey to the vast criminal network which exists on the internet.

    First, these crimes are committed on a vast scale. Criminal processes are orchestrated globally, automated, and supported by thousands of unwitting, disposable minions. If only a tiny percentage of people fall for scams, we’re still talking millions of dollars.

    Second, the bad guys are good at this. Really good. Blaming the victims is inappropriate. “They had it coming to them”?Really?

    Third, it all connects up. Fifty bucks went missing from your credit card precisely because the number had been stolen from a poorly-secured online store. The legitimate website popped up the message from the fake anti-virus product because it, too, was poorly secured and had been hacked automatically by software that probed a hundred thousand websites one night.

    Or, in the case of identity theft, when someone takes out $50,000 of loans in your name? That happens through the gradual accumulation of personal data. Your name and email address from a list stolen from a hacked website, cross-matched with your street address from another, your date of birth from a third, and so on.

    These databases can contain millions of people’s details. They’re traded in shady online markets where people buy the pieces missing from the databases they already have, merge them, refine them, mark ’em up and sell ’em on until eventually there’s enough to turn it all into a credit application. It’s then laundered though “money mules”, people recruited in the belief they’re making money at home with just a computer.

    Stilgherrian’s commentary highlights the fact that identity theft can occur to anyone. We also want people to know these important points:

    * Often, people don’t know identity theft has occurred to them, until they apply for credit and are refused.

    * Often, a person’s credit file can end up with a long list of defaults put there by someone who has used the victim’s good name to obtain credit.

    * Credit file defaults are debilitating – leaving people unable to obtain home loans, personal loans, even mobile phone plans during the term of the listing which is generally 5 years.

    * Credit file damage due to identity theft can be very difficult to rectify. To clear their good name, the identity theft victim needs to prove to creditors they did not initiate the credit – which can be difficult. Not only are victims generally required to produce police reports, but large amounts of documentary evidence to substantiate to creditors the case of identity theft.

    How to avoid identity theft

    Public education can go a long way to lessening the instances of identity theft. The Government’s Stay Smart Online website recommends Australians follow these 8 top tips for increasing their resistance to identity fraud, and avoiding the loss to their bank balance and potentially their good name:

    1. Install and renew your security software and set it to scan regularly.

    2. Turn on automatic updates on all your software, including
    your operating system and other applications.

    3. Think carefully before you click on links or attachments, particularly in emails and on social networking sites.

    4. Regularly adjust your privacy settings on social networking sites.

    5. Report or talk to someone about anything online that makes you feel uncomfortable or threatened – download the government’s Cybersafety Help Button.

    6. Stop and think before you post any photos or financial or personal information about yourself, your friends or family.

    7. Use strong passwords and change them at least twice a year.

    8. Talk within your family about good online safety.

    Where to go for help following identity theft

    Sometimes unravelling the tangled ‘web’ of online identity fraud for the purposes of negotiating with creditors to restore someone’s good name is a minefield that many individuals have neither the time nor the skill set for.

    Credit repairers are more commonly involved in assisting people in cases of identity fraud due to a better knowledge of legislation and ability to work within it when negotiating with creditors over the victim’s financial future.

    For more information contact MyCRA Credit Repairs or call tollfree 1300 667 218.

    Image: Danilo Rizzuti / FreeDigitalPhotos.net

  • Experian given green light by ACCC to enter Australian credit reporting

    Credit active individuals will have yet another company to contact when obtaining their credit history, and it will be as important as ever for people to check their credit file regularly.

    There is a new player in the credit reporting game, and it has some of Australia’s biggest lenders as its shareholders. Back in May, we blogged about the possibility of U.K. giant Experian entering Australian credit reporting, and speculated on what the issues may be for credit file holders in this country.

    Today newly appointed ACCC Chairman, Rod Simms announced his approval of Experian’s entrance into the Australian market. The Sydney Morning Herald ran a story titled Experian is allowed to report for duty. The article says Experian will challenge the other two major credit reporting agencies, Veda Advantage and Dun & Bradstreet for Australia’s major credit reporter.

    “The Australian Competition and Consumer Commission chairman yesterday decided there would be no substantial lessening of competition if Experian became the third sizeable in the Australian market – even if the big four banks and two other big US-backed lenders (Citigroup and GE Capital) are minority shareholders.

    Veda and the Dun and Bradstreet group have been the big players until now, and the banks are among their largest customers. There was a fear that the banks now have a financial incentive to put all their business through Experian, or at least choke off the supply of customer credit information to service providers that will in future be competitors.

    Sims and the ACCC accepted the banks’ argument that their backing of a new entrant to the market in Experian was in fact designed to increase competition by adding some pricing tension for services,” the article says.

    So where do consumers stand amongst this change? According to the ACCC, they are in an improved state. They acknowledged Experian’s argument that the benefits to having a new credit reporting agency like Experian, is the greater competition for accuracy and efficiency that will result.

    In addition to this, Australia’s move to new positive credit reporting laws will be enhanced by a company like Experian which is experienced in this type of data collection in the U.K.

    But what about the accuracy of credit reporting – will this be enhanced?

    Currently, there are several pieces of legislation, including the National Consumer Credit Protection Act and the Credit Reporting Code of Conduct 2009 which have gone a long way to improving the accuracy of credit reporting, by imposing tougher penalties for creditors who don’t comply with the Acts. The ACCC Chairman, in all likelihood probably found that legislation was strong enough to combat any conflict of interest that could have resulted from having the creditors also being minor shareholders in the credit reporting agency.

    Whilst Experian will be bound to comply with this legislation as the other agencies are, the onus is on the consumer to check the accuracy of their credit report. This is where the system could fall down – through simple lack of public education. Yearly credit file checks are currently not in abundance for most credit active individuals. When disputing any adverse listing, it is up to the credit file holder to provide reason as to
    why the creditor has not complied with legislation if they feel there are errors on their credit file.

    Current statistics from Choice Magazine from 2004 point to up to 34% of credit files in Australia likely to contain errors.

    What is concerning, is that many creditors are getting away
    with not complying with Australia’s strict credit reporting legislation because consumers are simply not checking their credit file for errors. People are only finding out about any defaults, writs or judgments on their file when they apply for credit. This guarantees them an automatic decline with the bank and leaves them angry and stressed if they feel the listing should not be there.

    If more was done to educate consumers as to their right to check their credit file for free every year, then people would have time to repair any errors when it is not urgent. It could also increase pressure for creditors to enhance the accuracy of credit reporting.

    Is there a conflict of interest in terms of accuracy when many major Australian creditors will be small shareholders in the credit reporting agency? The ACCC found this was not the case.

    Currently people can obtain a copy of their credit file for free every 12 months from one of the Australian credit reporting agencies, Veda Advantage, Dun & Bradstreet or Tasmanian Collection Services.

    We recommend everyone should be concerned about the accuracy of their credit file. A yearly check should provide a picture as to its accuracy, and allow them the opportunity to redress any errors which present on their file prior to needing credit.

    And for borrowers whose lender requires a credit check to
    secure finance? We predict their application fee just got more expensive with the introduction of the new agency – potentially paying for three or four credit reports instead of two to three.

     

  • Going guarantor: how to keep your credit rating safe

    It is natural for family and close friends to want to help each other when they need it. For guarantors – they are often near to retirement, with perhaps only a small mortgage on their home. They have no other debts and a good credit rating.
    This gives them the ability to help out often their children or other family members who seem to be struggling to get ahead – possibly unable to buy a home, purchase a car or enter into the business they have been hoping to secure.

    It seems so easy just to sign off on that loan for their family, and see them get ahead in life right? Well this is not always the case.

    In the past there have been clients who have gone guarantor for someone, only to find at some point they have not made repayments on the loan, leaving the guarantor responsible for the debt. Sometimes the guarantor is unaware the repayments are not being made. It is when they are refused credit themselves that they realise payments are late and their credit file has been tarnished.

    – What is a guarantee?

    When people seek approval for a loan, a lender can sometimes require a potential borrower to provide a guarantee if they feel there may be some doubt as to whether the loan will be repaid. This sometimes occurs when the potential borrower has no credit history, or a bad credit rating, or perhaps an inadequate savings record.

    Often it is a family member, and generally a parent who is asked to guarantee the loan. The guarantor agrees to be responsible for repayments on the loan should the borrower fail to make them and this is including all interest, charges and fees that are due to the lender.

    – What can go wrong?

    Well a lot actually. Number one being the borrower fails to keep up with their repayments.

    Repayments which are more than 60 days late are listed as defaults on people’s credit files. The default would be listed on both the borrower’s and the guarantor’s credit file. Once somebody has a bad credit rating, it can be very difficult to obtain further credit. Most of the major banks will reject loan applications when people have defaults on their credit file. It can be difficult to even obtain a mobile phone plan.

    Worst case scenario if repayments are not made, is the bank begins to use the property the guarantor used as collateral, to recover lost debts. There is a danger the guarantor can lose their home. Those people who were so close to financial freedom are now facing debt, and a shaky retirement.

    According to the Consumer Credit Legal Centre NSW, there are many negative aspects to making the decision to go guarantor:

    REMEMBER: You do not get anything out of giving a guarantee!
    You do not get:

    •Any rights to any of the goods or property the borrower is purchasing with the loan;

    •A positive credit record;

    •It will not make it easier for you to get a loan for yourself;

    •It will not necessarily make it easier for the borrower to get a loan in the future.

    They suggest alternative ways to help out your children or family financially without having to guarantee a loan.

    “If your child asks you to guarantee a car loan for example, consider some alternatives. Perhaps you could give them an interest free loan of a few thousand dollars as a deposit, or offer to match their savings if they wait a few months, or just talk them into a cheaper car. If the loan is for a family business, talk to your accountant. Is there another way of obtaining the required funds? If a guarantee is absolutely necessary, is there some way of minimising the amount of the guarantee and/or the risk that it will be called upon?” the Centre says.

    – How to make an informed decision

    In the case of buying property, going guarantor can make a huge difference to the family member’s financial future by allowing them to break into the housing market.

    The most important question to ask is: Could we make the repayments on this loan should our family member be unable to?

    The second step for potential guarantors to make could be to seek third party and or legal advice prior to any agreement being made. This is to be able to make that calculated risk – and yes it is a risk, with the help of someone who doesn’t have a vested interest in the outcome (like the borrower or lender).

    The Sydney Morning Herald’s Personal Loans Smart Guide provides some other points to consider when making this decision:

    •How much is being borrowed?

    •How responsible is the borrower?

    •How stable is their employment?

    •Does the borrower have any other means of repaying the loan should he or she fall ill, be injured or become unemployed?

    •Can I afford to repay the total sum of the loan?

    Guarantors can insist borrowers have adequate insurance to cover anything that may go wrong during the term of the loan, such as life insurance and income protection insurance.

    It is also important to be clear about the amount that will be guaranteed, and that there is an ending to the time period of the guarantee.

    They should also ask that a copy of all bank statements be provided to them during the course of the guarantee.

    It is true there are many cases of guarantors helping out family members successfully, with the whole event posing no danger to their own homes or to their credit rating. But in this instance, it is a case of, when in doubt – don’t.

    – Does the borrower have a bad credit rating?

    As an alternative to using a guarantor, the borrower could look at repairing their bad credit rating. The problem is, many people who attempt to have defaults removed are told by creditors they can have them marked as ‘paid’ but that listings never get removed.

    But if the borrower has a bad credit rating due to listings which have errors, are unjust or simply should not be there, they do have right to have those inconsistencies removed. It may be worthwhile for people with a damaged credit file to seek the help of a credit repairer who can assess whether they are suitable for credit repair. The borrower could have their credit file defaults completely removed, and negotiate with creditors on their behalf. The success rate is generally higher, and it could mean the borrower is able to apply for a loan on their own terms, without the need for a guarantor.

    For more information on credit repair, contact MyCRA Credit Repairs – www.mycra.com.au or phone toll-free 1300 667 218 to speak to a consultant.

    Image: Ambro / FreeDigitalPhotos.net

    Image: vichie81 / FreeDigitalPhotos.net

  • Online identity fraud numbers doubled in four years

    The Sydney Morning Herald recently reported one in 10 Australians who use the internet have lost money to online identity fraud over the past year, with those losses reported to total $1.286 billion. The story, titled ‘Online ID fraud losses explode to $1.3bn a year’ featured a survey of 2510 Australians conducted in June by Galaxy Research, for Authentification Service company VeriSign.

    Identity crime is getting quite a lot of attention in Australia lately, with Channel 10’s 7pm Project running a story on identity theft this week. The Government also recently reported survey results on identity theft which reveal 1 in 6 Australians may be affected or know someone who has been affected by identity theft or misuse.

    If the VeriSign Online Fraud Barometer figures are an accurate reflection of identity fraud numbers in Australia – the figures have massively jumped from figures reported by the Australian Bureau of Statistics in its Personal Fraud Survey conducted in 2007. This survey (conducted with over 16,000 Australians) found just over 800,000 people have been victims of personal fraud, with combined losses of $977 million. These figures were across the board for fraud, including but not exclusive to internet use.

    The 2007 ABS figures represented 5% of the population. This new survey demonstrates a doubling in identity theft numbers for the internet alone to 10% of the population in just 4 years.

    This escalation in identity fraud numbers would be a direct result of an increase in internet use.

    Figures from 2008-9 from the ABS on the use of internet in Australian households showed 72% of households had access to a computer. It will be interesting to see what statistics on household internet use will arise from the 2011 Australian Census.

    People are increasingly conducting their social lives, their finances and their business on the internet. So, the freeing of information leads to increased opportunity for criminals.

    The government’s scamwatch website has extensive information on current scams that are plaguing the internet. There are so many forms of scams to be wary of out there, it is frightening.

    Cyber security consultant Alastair MacGibbon, former head of the AFP’s High Tech Crimes unit, broke it down into four main ways people could have their credentials compromised online:

    1. Entering details such as credit card and banking information into a website that is run by crooks.

    2. Handing card details over to a legitimate site but they are then stolen from the site itself through a security flaw.

    3. Man in the middle attacks, where a legitimate site is infected by malware and credit card details are stolen from users as the transaction is underway.

    4. Having a virus planted on your own computer which sucks up credit card details and passwords and sends them to criminals.

    What is not known from the recent figures is how many of those identity fraud victims have had the crime impact their credit rating.

    Typically, when fraudsters take out credit in someone else’s name, the victim is not aware of the fraud immediately. Any kind of credit account (from mortgages and credit cards through to mobile phone accounts) which remains unpaid past 60 days can be listed as a default by creditors on the victim’s credit rating.

    So the fraudster could abuse someone’s good name all over town and it is not until the victim applies for credit and is refused, that they learn about the identity theft and subsequent fraud.

    Credit rating defaults remain on credit files in this country for 5 years. The effect of people having a black mark on their credit rating is generally an inability to obtain credit. Most of the major banks refuse credit to people who have defaults, or even too many credit enquiries, so it is really essential to keep a clean credit record.

    It is actually quite difficult to go about removing defaults from credit files, regardless of the source. Most creditors will tell people listings are only marked as paid if they have been paid and remain there for the required 5 years. But by law in Australia, if a listing contains inconsistencies the credit file holder has the right to negotiate their amendment or removal.

    To clear their good name, the identity theft victim needs to prove to creditors they did not initiate the credit – which can be difficult. Not only are victims generally required to produce police reports, but large amounts of documentary evidence to substantiate to creditors the case of identity theft.

    So as they say,prevention is always better than the cure.

    The Government’s Stay Smart Online website recommends Australians follow these 8 top tips for increasing their resistance to identity fraud, and avoiding the loss to their bank balance and potentially their good name:

    1. Install and renew your security software and set it to scan regularly.

    2. Turn on automatic updates on all your software, including your operating system and other applications.

    3. Think carefully before you click on links or attachments, particularly in emails and on social networking sites.

    4. Regularly adjust your privacy settings on social networking sites.

    5. Report or talk to someone about anything online that makes you feel uncomfortable or threatened – download the government’s Cybersafety Help Button.

    6. Stop and think before you post any photos or financial or personal information about yourself, your friends or family.

    7. Use strong passwords and change them at least twice a year.

    8. Talk within your family about good online safety.

    For people who already suspect they have had their good credit rating compromised due to identity theft, MyCRA Credit Repairs can possibly assist in removing defaults from their credit file. Call us on this toll-free number 1300 667 218, or visit our website for more information www.mycra.com.au .

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