MyCRA Specialist Credit Repair Lawyers

Tag: Credit Providers

  • Commercial defaults: don’t risk it with your small business

    Media Release

    small business creditCommercial defaults: don’t risk it with your small business

    12 September 2013

    Credit to fund small businesses can be difficult to obtain, and a credit expert warns it is important to stay under the radar when it comes to your credit file to ensure you are not defaulted when you need it most.

    CEO of national credit repair company, MyCRA Graham Doessel, says small businesses can sometimes find repayments a juggling act but when it comes to maintaining a clean credit file it is essential to make sure all accounts are paid on time.

    “Running a small business can be a bit of a juggling act especially if revenue isn’t consistent, but despite this, it is essential that systems are developed to ensure accounts are paid prior to the due date regardless,” Mr Doessel says.

    He says many people don’t realise the ramifications of paying accounts late. Whether it be a business account or a consumer account – if it more than 60 days late you will likely end up with a default on your credit file. Even one account in default could mean you are either refused credit altogether, or offered a much higher interest rate.

    “Many businesses can find the higher interest charges alone can set them back way too much to make expansion or starting up viable,” he says.

    “I have a current client trying to fight a mistake on his business credit file which has seen a $1,000 default hinder a $1.4 million loan. Although he has been offered a loan, the 2% interest rate increase for bad credit will mean he has to pay a staggering $28,000 per year in additional interest.”

    He adds, that defaults can be made quickly, with less protection for SME’s in the commercial landscape.

    “Although many Credit Providers adhere to the 60 days in arrears rule before placing a default on your commercial credit file, technically, they don’t have to. The normal protections consumers are afforded in the Credit Reporting Code of Conduct are not extended to commercial credit,” he warns.

    Despite the laws, many of the Ombudsman Services do encourage Credit Providers to give adequate written notice to remedy an account in arrears prior to listing a default.

    Ideas to minimise your risk of defaults

    1. Pay all accounts on time. You need to have systems in place whereby credit cards and all bills are paid on schedule. 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. Be aware, that repayments to licenced Credit Providers (loans, credit cards etc) which are more than 5 days late will be noted missed on your credit file and listed as a ‘late payment’. These remain on your credit file for 2 years.

    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 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.

    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. You can do this by visiting www.freecreditrating.com.au.

    5. Minimise credit enquiries. If you are not sure about your business’ credit health, run your own check before applying for new credit.  You should also minimise credit applications. Some lenders are rejecting loans for as little as two credit enquiries in 30 days, or six enquiries within the year – so it pays to only apply for credit you intend to pursue.

    6. Safeguard your consumer credit file. 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? Not only can your credit rating be compromised for five years, 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.

    7. 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.

    Mr Doessel says 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.

    “Choose your credit wisely, choose your clients wisely, and make paying your debts a priority – regardless of the size of your business,” he says.

    You can find more information on your credit rating at www.mycra.com.au.

    /ENDS.

    For further comment:

    Lisa Brewster – Media Relations Ph 3124 7133     media@mycra.com.au

    Graham Doessel – CEO MyCRA Ph 3124 7133     www.mycra.com.au   www.mycra.com.au/blog

    246 Stafford Rd, STAFFORD Qld

    Photos available on request.

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

  • ‘TAX REFUND NOTIFICATION’ Don’t get caught out with this scam at tax time.

    tax refund notificationA high priority alert has just been issued from Stay Smart Online in regards to malware-carrying emails supposedly from the Australian Taxation Office, which could send your credit file into the doghouse. Most people who regularly read this blog will probably be well aware of the high prevalence of scam emails designed to capture your financial details either directly or through malware. They would also be well aware of the dangers that can pose for your ability to obtain credit in your own right if fraudsters steal your identity and pose as you to take out credit in your name. But we feel it is important to remain vigilant in warning the community when such emails are on the increase. They could just catch out someone you know. So we look at the details on this email and its variants, and what dangers it poses for the financial information of ordinary Australians.

     

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

    Today Stay Smart Online (the government’s online safety website) issued a warning about cyber criminals taking advantage of the upcoming tax deadline for filing tax returns by launching thousands of scam emails. The emails are purporting to be from the ATO, but contain malware which can steal your personal information.

    Security firm Bitdefender reported the detection of three email spam campaigns in late July and early August that saw up to 10,000 spam emails sent on 6 August. This surpassed the 3,000 messages sent on 23 July and the 5,000 messages sent on 15 July.

    “This sort of malicious outbreak is expected to continue heavier and more targeted as the tax time approaches its deadline in October,” a Bitdefender advisory warned. “Attackers hope their targets are too concerned with their financial duties to double check the sender’s address and discover the con.”

    If your system is infected by the malware in these messages, private data such as passwords and logins for financial institutions can be stolen and distributed to cyber criminals who will exploit it for financial gain.

    If your computer becomes infected, not only can personal information be stolen, but malware may force the computer to join a global ‘botnet’ that uses thousands of slave computers to distribute further malware-laden emails—or it might take part in distributed denial of service (DDoS) attacks. Among other things, this can seriously reduce the effective speed of a home Internet connection.

    What the emails look like…

    Most common spam emails

    ‘Australian Taxation Office – Refund Notification’, with body text including ‘TAX REFUND NOTIFICATION’. It instructs you to open an attachment called ‘ATO_TAX_pokeefe.zip’ or similar. The attachment is typically malware.

    ‘New information regarding lodgement’ and suggests that the ATO has been attempting to refund a payment to “the credit card we have on file.” Recipients are advised to log into an ‘e-portal’ to receive the refund manually, and that “during the payment process you will be given the opportunity to update the credit card that is on record.”

    Important Information…

    The ATO will never ask for such information via email. Any email that requests additional information before a refund can be released is a hoax.

    If you receive a message like this, do not under any circumstances open the attachment. Delete the message immediately. Never open attachments that arrive with these sorts of messages.

     

    Identity theft and your credit file

    Identity theft can lead to fraud, and can affect your credit file. It often goes undetected until the victim applies for credit and is refused.

    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.

    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.

    If you think your identity has been stolen, or that your personal information has been compromised there are three things you should do to protect your credit file:

    1. Contact Police immediately

    2. Contact the credit reporting agencies which hold your credit file.

    3. Contact your Credit Providers – especially financial institutions.

    If you think your tax file number has been stolen, you can visit the ATO’s Client Identity Support Centre for more help. They also give comprehensive advice on what to do in different situations of theft of your personal information.

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

    But 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.

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

    Image: Stuart Miles/ www.FreeDigitalPhotos.net

  • New laws to aid in correcting your credit report: Privacy Awareness Week 2013

    correcting credit reportsThere are a number of significant changes which will impact the correction of credit reports coming through once Privacy Act 1988 (Cth) amendments are implemented in March 2014. As part of Privacy Awareness Week 2013 and this week’s theme Privacy Law Reform, we thought it would be fitting as credit repairers to stipulate those changes that may benefit consumers in the area of disputing unfair or inconsistent credit listings. There is a whole host of new information available to Credit Providers, and with this there will be an increased obligation for Credit Providers to provide accurate, up-to-date and fair information. When correcting their credit report, obviously each consumer will need to draw on different aspects of Privacy Legislation when making their case to dispute their credit listing, and this is why full knowledge of all available privacy legislation both current and new is the key to disputing credit listings. But we look at the new Australian Privacy Principles, and how they are currently interpreted in the draft Credit Reporting Code  of Conduct when it comes to access and correction of credit information.

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

    PrivacyWeek-Banners-R1 - 2013-3

    Australian Privacy Principles

    The National Privacy Principles (NPP) has up till now been the legislation which underpins the access and correction of Australian credit reports. Come March 2014, this legislation will become the Australian Privacy Principles (APP). There have been some long awaited changes in the area of access and correction. Currently, NPP 6 covers both access and correction, and this will be split into two separate principles APP’s 12 (access) and 13 (correction) come March 2014.

    Access

    Access involves the request for individuals to access information a company holds about them, and it is an important part of Privacy legislation for credit repair. Having full access to your personal information allows you, for instance, to be privy to all the information a Credit Provider may hold about you and your account, including their client notes and their copies of documentation. To have this information is essential in order to go through and make your case for disputing a credit listing which you believe is inconsistent.

    APP 12.4 introduces a new requirement for organisations to respond to a request for access within a reasonable period, and in the manner requested by the individual, if it is reasonable and practicable to do so. This will be of great benefit to consumers, as it stipulates the requirement for timeliness when requesting information from Credit Providers. Many of our clients, and indeed individuals have experienced a significant delay in receiving, if not outright refusal to provide such information. To have a Credit Provider not provide this information can stop a case for dispute in its tracks.

    Correction

    Currently, if an individual is able to establish that their personal information is not accurate, complete and up-to-date, an organisation must take reasonable steps to correct the information (NPP 6.5). If the organisation and the individual disagree about the accuracy, completeness and currency of the information, the organisation must attach a statement to the information noting this, if the individual requests it to do so (NPP 6.6).

    Up till now, it has in many cases been difficult for individuals to establish that information is inaccurate, particularly when the Credit Provider disagrees with this claim. It has been up to the individual (or credit repairer) to go about proving the information is inconsistent.  Many individuals have no skill set for establishing proof of inaccuracy, as it requires extensive knowledge of legislation, as well the legal knowledge to negotiate with a very experienced Credit Provider.

    The Privacy Commissioner explains the finer points of new legislation to help consumers with correction in its reference material on the new Australian Privacy Principles (PDF):

    APP 13 amends the requirement in NPP 6.5 for an individual to establish that their personal information is not accurate, complete and up-to-date.

    Instead, if:

    an organisation is satisfied that, having regard to a purpose for which the information is held, the information is inaccurate, out-of-date, incomplete or irrelevant or misleading, or

    the individual to whom the personal information relates requests the organisation to correct the information

    the organisation must take reasonable steps to correct the personal information to ensure that, having regard to the purpose for which it is held, it is accurate, up-to-date, complete, relevant and not misleading.

    If an organisation corrects personal information about an individual that it has previously disclosed to another APP entity, the organisation must take reasonable steps to notify the other APP entity of the correction, where that notification is requested by the individual (APP 13.2).

    APP 13.3 requires an organisation to provide an individual with written notice if it refuses to correct the personal information as requested by the individual. The written notice must set out:

    the reason for refusal (unless this would be unreasonable)

    the mechanisms available to complain about the refusal, and

    any other matter prescribed by regulation.

    If an organisation refuses to make a correction, and an individual requests that a statement be attached to the record stating that the information is inaccurate, out-of-date, incomplete, irrelevant or misleading, the organisation generally needs to attach this statement in a way that will make the statement apparent to users of the information (APP 13.4).

    APP 13.5 introduces a new requirement for an organisation to respond to a correction request within a reasonable period. The organisation must not charge the individual for making the request, for correcting the information or for associating the statement with the personal information (APP 13.5).

    So in lay-man’s terms, it will be up to the Credit Provider, if it refuses to correct the personal information requested by an individual, to provide reasons as to why it has refused to correct the credit report, and to provide direction to the consumer about how to complain if necessary. On top of this, if the Credit Provider refuses to correct a credit report, individuals may be able to request that a statement be attached to their record showing that the information is considered by them to be inconsistent.

    Credit Reporting Code of Conduct

    Interpretation of APP’s will be set out in a new Credit Reporting Code of Conduct. Currently this document is in draft stage. There are many significant points for correcting credit reports right through this document, but in the particular area of access, correction and complaint we have these changes:

    Access

    Access to information will be

    -free every 12 months

    -free if it relates to a CP’s decision to refuse credit The CRB’s free credit report must be as easy to find as the paid report CRB is required to give a basic explanation to the info it provides to individual on their credit report.

    Correction

    Can occur whether a CRB or CP is satisfied information is inconsistent, inaccurate out of date etc. Must make correction within 30 days or longer as agreed in writing by individual CRB’s or CP’s consulted by another CRB or CP about a correction requests must be responded to promptly (recommended 10 days).

    Complaint

    Must be acknowledged within 7 days and investigated and where necessary consultation with CP’s or CRB’s may occur. A decision must be made in 30 days or longer as agreed by individual in writing.

    Integrity of Credit Reporting Information

    The other significant change is in the area of auditing Credit Providers. We believe this could bring about significant positive changes within the credit reporting system. Credit reporting agencies (CRB’s) will now have the task of providing reports to the public and also to the Privacy Commissioner (who will have final say on complaints and even new powers to penalise breaches) on complaints and corrections numbers.

    CRB’s will need to publish information on the number of correction requests received, the number of corrections successful and the number of complaints by each CP. This is with the aim to maintain the integrity of credit reporting information, and to promote accountability through providing transparency in relation to corrections requests and complaints. It will tip the scales in what has often been a case of David and Goliath. Audits will we hope identify those companies who experience problems with credit reporting that could disadvantage consumers, and force some companies to undertake reasonable steps to rectify identified issues.

    In Privacy Awareness Week tomorrow, we look at the area of Data Security and how that may impact your business…

    image: digitalart/ www.FreeDigitalPhotos.net