MyCRA Specialist Credit Repair Lawyers

Tag: Graham Doessel

  • Credit Rating Repair Customer Costs – A Tale of Two Business Models

    “It was the best of times, and it was the worst of times.” Nothing could be truer for this time in the credit rating repair industry –we are at a turning point. It is time to examine the credit rating repair industry’s customer business payment models and decide going forward what models and methods are in the best interests of consumers, credit rating repairers and associated companies.

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

    Consumer demand in recent years has demonstrated the true value of third party credit rating repair. Unfortunately much of the consumer recognition has been lost from a credibility standpoint under a wave of confusion over the credit rating repair industry’s customer business payment models. I examine the current credit rating repair business models in terms of best interest for consumers with a view to the application of some best practice standards for fee structure.

    In this post, I share my examination of credit rating repair customer costs with you and show how both business models can co-exist to benefit consumers, provided going forward, some recommendations are taken on board across both models to streamline transparency and fairness for consumers.

    In the article Credit Rating Repair Customer Costs – A Tale of 2 Business Models, I investigate the two customer payment business models current in the credit rating repair industry, ‘fee for service’ and ‘no win no fee’ payments.

    The fee structure for the credit rating repair industry must be investigated with a view to creating some best-practice reforms in the interests of consumers. The industry is ripe for criticism for confusing consumers due to the vast differences in fee structure across credit rating repair companies and lack of clear guidelines for advertisement and configuration of customer payments.

    Where the credit rating repair industry falls down, is that there are some inconsistencies in the way companies are delivering and advertising their services – some are not advertising their fees, some are charging way too much and delivering too little – and this creates mistrust across the board and tarnishes the reputation of what is actually a necessary service.

    Differing customer business models in the credit rating repair industry

    ‘Fee for service’ in the credit rating repair industry, means a fixed amount charged to a client for an agreed level of service. This is charged based on the level of service and or performance. This means that the fee structure is provided to the client up front, and as the client approaches each stage of service, the fee for that service will be due.

    The fee for service business payment model, by its very nature is more transparent, and applies principles which are in the best interest of the consumer – for these reasons:

    Upfront fees give the consumer more reassurance they will be told what they are going to get, how much it will cost, and because money has changed hands – the credit rating repairer will be bound to deliver what they have promised.

    This model allows the credit rating repairer to give better service to the consumer, through the increased level of commitment by the consumer.

    The introduction of a refundable assessment fee takes the benefits of fee for service to another level – by assuring those that enter into this business payment model are refunded any monies should they not proceed beyond the assessment stage of credit rating repair.

    The difficulty in a fee for service model is its restriction on consumers who can’t afford upfront payment, and can’t borrow due to a bad credit rating. At the same time, the fee for service credit rating repairer would likely impose less ‘defaults’ on consumer credit files.

    ‘No win no fee’ cost agreements are also known as conditional cost agreements. No win no fee broadly means that the client only pays credit rating repair costs if their claim is successful.

    The definition of a “successful claim” may vary between credit rating repairers. Ideally a best practice scenario should be where a successful claim is defined as a negative listing removed from the client’s credit file.

    When contrasted with fee for service, the win no fee business payment model has some significant disadvantages for consumers – particularly where the disclosure of fees and charges are concerned.

    Extra costs; and hidden costs dumped on consumers regardless of their success in credit rating repair can lead to confusion and anger over fees and charges.

    There is also the potential to skip vital steps in assessment which can lead to an inadequate volume of information prior to the engagement of credit repair – potentially leading to promises of credit repair not based in fact.

    Furthermore, should non-payment arise, the company may be forced to place defaults on credit files– a woeful situation that no credit rating repairer wishes to be in.

    Despite the disadvantages, the no win no fee business payment model has merit due to the ability to help those people who otherwise could not afford credit repair.

    In deciding which customer business payment model to adopt for the credit rating repair industry, I address other professions where these debates have occurred.

    The financial planning industry is on the cusp of streamlining a fee for service payment model across the entire financial planning sector. This has been in response to demand for better transparency to combat criticism of conflict of interest – and uses a ‘best interest’ approach.

    This consumer ‘best interest’ approach has strong merit when constructing any best practice customer payment model in the credit rating repair industry.

    In the legal arena, the no win no fee model popular in personal injury claims has been criticised for misleading advertising and hidden costs, something which the credit rating repair industry should keep in mind when making any reforms.
    With both business models having merits for credit rating repair, a number of recommendations across the board on both models would need to be instigated to create a level playing field for consumers.

    These include refundable upfront fees plus full disclosure of all fees, charges, terms and conditions on advertising. These changes make customer payments fair and simple to understand.

    These best practice reforms to business payment models would create transparency and credibility and would vastly contribute to providing a valid place for credit rating repair in Australasia’s credit reporting landscape in the future.

    The biggest criticism of the credit rating repair industry is that professional credit rating repairers are seen to be charging fees for what consumers can technically do for themselves.

    In reality, credit reporting can be a minefield for the individual to navigate. A good professional credit rating repairer can do much more for a consumer, and has a much greater chance of success, through knowledge of legislation and relationships with and ability to negotiate with creditors.

    This greater transparency will allow the industry to focus on the real issues within credit reporting which have previously been hidden under a cloud of heresay and confusion from outsiders.

    It can be said, that the footsteps the credit rating repair industry leaves during this time will allow credit rating repairers to march forward, revolutionising credit reporting itself in Australasia.

    Full article can be read on Graham Doessel blog here: http://grahamdoessel.com/wp/credit-rating-repair-customer-costs-a-tale-of-two-business-models/.

     

    Image: vichie81/ FreeDigitalPhotos.net

    Image: Stuart Miles/ FreeDigitalPhotos.net

  • New Credit Rating Repair Industry Body CRIAA positive step for Brokers and consumers

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    UPDATE: The CRIAA has been shut down by Founder Graham Doessel, due to non-compliance of unlicensed credit repair agencies with their own code of conduct.  Mr Doessel realised that if these unlicensed credit repair agencies could not follow their own code of conduct, he as the founder of the CRIAA had no alternative but to shut it down to protect the community.

    “I’m deeply disappointed at having to take such decisive action, but as the CEO of Australia’s only true Specialist Credit Repair Law firm, I have no choice but to distance myself from possible rogue operators that refuse to take the CRIAA Code of Conduct, and associated laws seriously.” Mr Doessel said.

    The CRIAA was closed in 2014.

    It is exciting to see where the credit rating repair industry is heading and I am proud to be a part of the formulation of a new industry body which will improve credit rating repair across the board for Australasia. Australian Broker magazine published an article today on this new industry body the Credit Repair Industry Association of Australasia (CRIAA) of which I am an executive member. We held our first meetings yesterday, chaired by Finance Brokers Association of Australia (FBAA) President Peter White, and it was a great success.

    The Australian Broker story was titled The CRIAA to make tough times for dodgy operators by Adam Smith. Here’s the story in its entirety:

    CRIAA to make tough times for dodgy operators

    Self-regulation of the credit repair industry could involve brokers, and ultimately benefit their clients.

    The burgeoning Credit Repair Industry Association of Australasia has held its first meetings, and executive member Graham Doessel, founder of credit repair agency MyCRA, said the formation of the industry body should help put brokers at ease.

    Doessel said the CRIAA would look to institute a code of conduct and minimum qualifications for the credit repair industry, and that introducing these standards would give brokers peace of mind about working with credit repair agencies.

    “Mortgage brokers referring to a CRIAA member can have more confidence that the work is done correctly, and therefore it protects their reputation and the money of their clients,” Doessel said.

    Doessel said the agency had sought help from ASIC and the FBAA in drafting its code of conduct and standards, and had received strong interest from credit reporting agencies. He commented that brokers may even be invited to become members of the association.

    “We’re trying to set it up to be the genuine representative body of the industry and all its stakeholders, so we’re not going to be exclusive. We’ll be looking at inviting mortgage brokers who refer clients to credit repair agencies. They’re directly affected and I think their inclusion is a good idea,” he said.

    Doessel conceded that the credit repair industry had seen disreputable operators, and said the formation of an industry body could stem the tide of unethical businesses by introducing an industry standard.

    “Any good credit repair firm works within the legislation and makes sure the creditor works within the legislation. The CRIAA is hoping we will ensure that all members have minimum qualifications and workflow standards,” he said.

    Ultimately, Doessel said he hoped the formation of the CRIAA helped to raise the reputation of credit repair agencies.

    “We’re looking to make it harder for less reputable businesses to operate effectively,” he said.

    About the Credit Repair Industry Association of Australasia (CRIAA)

    The Credit Repair Industry Association of Australasia (CRIAA) has been established as the result of an identified need to increase transparency and professionalism across the credit repair industry as a whole.

    The key aim of the CRIAA is to provide a strong and consistent foundation for credit repair clients in an industry that has been largely unregulated and lacking formal standards.

    The CRIAA is in the process of establishing a ‘quality service’ framework for consumers, enhanced by best practice operational standards. This ensures members conduct themselves with high standards and ethics, based on the Association’s code of conduct.

    The CRIAA aims to deliver some significant benefits to consumers which have not been available before from the credit rating repair industry.

    Consumers should be able to confidently select an ethical and reputable credit rating repair company or organisation to look after their personal affairs from the CRIAA member companies.

    A code of ethics is vital for the credit rating repair industry. The credit rating repairer is privy to a large volume of personal information from consumers. A code of ethics upheld by CRIAA members will increase the likelihood high standards of privacy are upheld, minimising the instances of fraud and breaches of privacy.

    The CRIAA ‘quality service’ blue-print, will mean consumers can expect a higher level of service from those CRIAA members. Input on service standards will be provided by key CRIAA members from both inside and outside the credit rating repair industry.

    The CRIAA seeks to have an influence on decisions of credit reporting law moving forward – whether directly or indirectly. The aim is to increase the legislative voice for those who are ultimately responsible for ensuring credit reporting accuracy. This voice belongs to consumers and the credit rating repairers who act on their behalf.

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

    Image: cooldesign/ FreeDigitalPhotos.net

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  • Emergency loans from family and friends are rampant – where’s the backup plan?

    When times get tough, we all hope our friends and family would be there to lend a helping hand. But if we come up against an emergency, especially if we have a small to medium business, we need to be able to first apply a ‘back up plan’, which may involve borrowing money. Ask yourself – is this possible? Or would we have to borrow from family to get us over that hump? A study has found more than 20% of Australians have lost friends over borrowed money. So what’s your contingency plan?

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

    Smart Company published a story today titled ‘SMEs warned on borrowing from family and friends as monthy “friendly” debt pile tops $1.6 billion a month’, reporting on a survey commissioned by the Commonwealth Bank showing the average Australian borrows more than $200 from loved ones every month.

    “This equates to more than $1.6 billion a month, with “unforseen or emergency situations” identified as the most common reason for borrowing (49%)… While the majority of respondents (85%) say they were brought up to repay their debts, 49% have experienced disagreements when it comes to paying loans back,” Smart Company reports.

    The study is based on a survey of 1,193 Australians aged 16 to 39.

    Commonwealth Bank executive general manager of cards, payments and retail strategy, David Lindberg says millions of Australians rely on informal borrowing networks.

    “[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][But] borrowing money from friends and family can be the cause of disagreements, whether that’s over the amount or best way to pay someone back,” Lindberg said in a statement to Smart Company.

    A back-up plan

    Anyone who owns their own business, their own home or has any sort of significant debt needs to spend some time thinking about what the go-wrongs could be, and set up a plan for what to do. Then they can stop worrying about the go-wrongs and keep going forward with confidence.

    What if we lost our job? What if interest rates went up significantly? What if business went down really fast – such as what happened to many people after the GFC? What if someone did the wrong thing by us? What if we were short one month or two? What if we got sick?

    I have come up against some go-wrongs in my time. In the early 2000’s I owned my own Promotions Business. Like many salespeople, I was good at talking, but not so good at the paperwork. This led me to bring in a mate who was good at paperwork.

    The bloke I brought in was good alright – he was good at stealing over $130,000 of borrowed funds from the business over four months. So repayments were due and I had no money to make them. After receiving some bad advice, I declared bankruptcy.

    Later I learned the bankruptcy was not necessary, there were some things I could have done differently, and I would have been alright.

    Hindsight is wonderful, foresight is golden. In my next business ventures, I instilled a ‘back-up plan’ to cover an emergency.

    Little did I know, in time I would require one.

    After a couple of years building up my mortgage brokerage, at the height of its success, I was dealt a blow that too many have been dealt. I was told I had Cancer. I powered on at work – but I am sure I wasn’t as productive in my own business as I would have been if I had been healthy. What saved me and my business was my back up plan. Never did I let my accounts go unpaid. My credit file remained squeaky clean through it all. Once I recovered, I was able to bounce back financially and get myself to where I am today with MyCRA.

    Here are some things for you to consider about constructing your own back-up plan:

    1. Get good solid financial advice from a recommended and trusted advisor. They may offer ideas you hadn’t considered in the formulation of your back up plan from what sort of ‘buffer’ you would need to be comfortable, to recommendations for relevant products and services.

    2. Consider insurance. Income protection, health insurance, disability insurance among others could all be viable options for you. Refer to the government’s business website for more information on insurance if you run a SME.

    3.  Could you borrow money if necessary? Ensuring all of your accounts are paid on time is the best way to secure the ability to obtain credit in the future. But sometimes mistakes happen with your credit file. Listings can be put there incorrectly, and these could see you blacklisted from credit unnecessarily. Obtain your credit report for free every year from one or more of Australia’s credit reporting agencies. Obtain both your consumer and commercial credit files and make sure they are accurate. If your credit report does contain inconsistencies, get those defaults removed from your credit file if they shouldn’t be there NOW. Don’t wait until something happens – sometimes it can take time to repair the credit file damage.

    When you need emergency money

    1. If you do need to borrow money for an emergency – decide early whether the problem is short or long term. Don’t bury your head in the sand and ‘hope’ that things improve when the problem is really long term. Borrowing from Peter to pay Paul is the quickest way to get you or your business in to long term debt. Remember, overdue accounts of more than 60 days will show on your credit file for between 5 and 7 years – depending on the listing.

    Even if you can get over the hump now – you will not be able to borrow to expand while you have bad credit history. Long term, you are better off addressing problems now – whether that be to sell the house, the business, downsize or re-group. If you are in genuine financial hardship, talk to your bank about Financial Hardship relief on any borrowed funds – this is a legitimate option which your bank is required to provide you with under certain circumstances.  Act now to save your future rather than spoil your credit rating.

    2. If you believe you will have financial problems for some time, consider a Financial Counsellor. Visit the Financial Counselling Australia website for more information.

    3. If you are going to borrow from family and friends set the terms in stone. Consider getting the terms of any loan down in writing and signed by all parties are aware of what the conditions of the loan will be. Then stick to it.

    This post is intended as information only and in no way is intended to replace or constitute professional financial advice. For money help, you can look at the Government’s Money Smart Website, or contact a professional Financial Advisor.

    Image: graur razvan ionut/ FreeDigitalPhotos.net

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  • 1.2 million Australians per year fall victim to fraud

    The Australian Bureau of Statistics has released their Personal Fraud Survey, which was conducted over 12 months in 2010 and 2011. The results are interesting, with some noteworthy trends on identity fraud, identity theft and scams coming out of the figures from this survey. One of particular significance was that almost half of the identity theft victims had no idea how their personal details were obtained.

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

    This is the second Fraud Survey of its kind for the ABS, with the previous Personal Fraud Survey conducted in 2007.

    The ABS Personal Fraud survey shows a total of 1.2 million fraud victims in Australia (aged 15 years and over) were a victim of at least one incident victims of personal fraud in the 12 months prior to interview in 2010-11.

    “This equates to a national victimisation rate for personal fraud of 6.7% of the population aged 15 years and over. This is an increase from the 806,000 victims of personal fraud in 2007 (5.0%),” The ABS reports.

    “The total financial loss recorded from this fraud in Australia amounted to $1.4 billion. Three in five victims of personal fraud (60% or 713,600 persons) lost money, an average of $2,000 per victim who incurred a financial loss. The median loss for personal fraud was $300,” The ABS reports.

    In the 12 months prior to the survey, an estimated 702,100 Australians were victims of identity fraud, or 4.0% of the population aged 15 years and over. This is an increase from the 499,500 victims of identity fraud in 2007 (3.1%).

    Credit card fraud was most common, with an estimated 662,300 Australians aged 15 years and over or 3.7% of the population reporting incidents of it.

    In the 12 months prior to survey in 2010-11, an estimated 44,700 Australians were victims of identity theft, or 0.3% of the population aged 15 years and over.

    According to the survey results, an estimated 6.4 million Australians were exposed to a scam in the 12 months prior to interview, or just over a third of the population. An estimated 514,500 Australians aged 15 years and over (2.9%) responded to a scam in the 12 months prior to survey.

    A little more on identity theft…

    It has become most likely that should people fall victim to identity theft, that their personal information is used to gain credit or finance in some way. And frighteningly, nearly half of all these victims don’t know how their personal information was obtained. Many (12%) don’t know about identity theft until they perform a credit check or one is performed on them for some reason.

    “One in five (19.9%) victims of identity theft indicated having their personal information used for applications for a loan or to gain credit in the five years prior to interview in 2010-11, making it the most common way that personal information was used.

    Just under a third (31.8%) of identity theft victims discovered that they had been a victim of identity theft via a notification or query from a government agency, 15.1% through a bill from a business or company, and 12.0% through a credit check.

    The most common known way that victims’ personal details were obtained in the commission of identity theft was in person (28.3% of victims), followed by email/internet (10.0%), although nearly half of all victims (44.0%) reported that they did not know how their personal details were obtained,” the ABS reports.

    Those people in the 25-55 age group were most likely to be victims of identity theft. Those who were gainfully employed were twice as likely to become identity theft victims, as were those earning over $2,000 a week.

    How can people go all the way to the credit check before realising they are victims of identity theft?

    It depends on the fraud type. In cases of out and out identity theft, fraudsters have secretly gained personal information in some way (the victim may not even be aware of where their personal details have been compromised). The fraudster gains enough information to go about making some form of duplicate identity, and then unbenownst to the victim, they apply for credit in the victim’s name.

    In cases where the fraudster has been successful, the fallout can be a nightmare for the identity theft victim. Generally the victim is left with a series of overdue accounts on their credit file. These show as default listings or clearouts will stop the victim from being able to borrow for between 5 (defaults) and 7 (clearout) years.

    But just like any other form of credit file inconsistency, it is up to the credit file holder to prove the inconsistency and in the case of the identity theft victim, that it wasn’t them that took out the credit in the first place. This could be really difficult for those people who can’t even prove where their personal information was stolen let alone how.

    To find out more about identity theft, visit our identity theft fact page How to Prevent Identity Theft and Keep a Clean Credit Rating or visit the MyCRA website http://www.mycra.com.au/identity-theft/.

    Image: Victor Habbick / FreeDigitalPhotos.net

     

  • A consumer advocate shows Aussie singles how to recover from post-relationship credit crisis.

    Being lumbered with relationship debt is a common cause of bad credit. People can be stuck to a bad relationship long after the people in question have got out and moved on. A bad credit rating, or credit rating defaults, can hinder a person’s ability to obtain new credit for between 5 and 7 years, so it is important to cover yourself and your credit rating against an STD (Sexually Transmitted Debt).

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

    Recently I read a fantastic article in Brisbane’s Courier Mail on How to Fix Relationship Debt. The perspective was provided from Generations Columnists Gen Y’s Justine Davies, Gen X’s Bruce Brammal, Baby Boomer Mark Bouris and Retiree Kerrin Falconer.

    I would advise people to read the article and apply the principles for their generation.

    Here is a great point I found in this article:

    “A FEW years ago, Paul Clitheroe told me that he wanted money to be the sex of the next generation.

    He explained that when he was young, sex was a taboo topic whereas now it’s talked about everywhere. He hoped that Gen Y would do the same thing for money: bring it into the mainstream.

    The best place to start making that conversational change is with your partner, because according to Relationships Australia, conflict over money is one of the top causes of arguments and relationship breakdowns in Australia,” Justine Davies says.

    Being in love is one of the best feelings in the world, but not one of the most practical states to be in. Sometimes personal financial values go out the window and people lose themselves in the process of adding to the ‘relationship’ and creation of ‘us’.

    But it is important to think practically about joint finances.

    Many people come unstuck by not asking the tough financial questions about their prospective partners early in the relationship.

    And when they fail to, when love turns sour they can end up broken hearted and broke.

    Black marks on your credit rating – the ‘STD’ that is hard to get rid of.

    When two different money ‘personalities’ combine, the potential for both to be financially damaged is greatly increased.

    Every day we meet people who need help with fixing credit rating issues due to no fault of their own really, but they have fallen under the financial shortcomings of a partner.

    When people take out any credit together, such as loans, utility accounts, homes and rental properties, they become very reliant on the partner to keep up their end of the credit repayments.

    Sometimes one partner ends up with a bad credit score, simply because the other person on the account has not kept up with repayments. People can be unaware their partner is generating defaults on their credit rating until it is too late.

    In many instances it’s not until people apply for credit in their own right that they find out about the credit problems their partner has initiated. The relationship may even have ended years ago and the partner is still paying for it.

    Bad credit history can last for 5-7 years, depending on the listing. The most common type of negative listing is a default, and is placed by the creditor when an account holder fails to make payments past 60 days.

    For Valentine’s Day this year, I wrote a post titled ‘Valentines Day Blues. What You Need To Know About Your Credit Rating When Love Goes Bad.’

    Here are my 10 Steps for financial separation to protect your credit rating from that post:

    10 Steps for financial separation

    1. Cancel joint bank accounts. You could use the money from these accounts to go towards paying off any debts you may have together.

    2. Pay off and cancel joint credit cards. If the debt on the card/s can’t be paid off, inform the creditor that you have separated and ask them to put a stop on the account so there may be no more transactions. They could possibly make arrangements to transfer the repayments to two separate accounts.

    3. Resolve the mortgage debt. Sell the home and divide the proceedings, or sell your share of the home to your ex-spouse or vice-versa. Before this takes place, notify the bank you have separated. Make sure no further amount can be redrawn on the loan and that you receive separate statements whilst you are separated and both still own the property.

    4. Transfer names on other accounts. Phones, electricity accounts, rental properties, rates, car loans and store credit should all be transferred to one name as appropriate.

    5. Pay any unpaid accounts. No matter who has accrued these debts, the creditors will still see you as responsible. Ensure all accounts are paid on time while they are in both names.

    6. Keep a record of all undertakings. Keep good paperwork and notes related to the separation, including cancellation or changes to any accounts for future reference.

    7. Employ a good family solicitor. Legal advice is important as it relates to children, family businesses and property. Also if anything runs off course with division of debt, they can give good advice on the next course of action.

    8. Notify credit reporting agencies. Let Veda Advantage, Dun & Bradstreet, or Tasmanian Collection Agency know of your separation and any steps you have taken to separate accounts to date.

    9. Check your credit score. Request a copy of your credit report and check each entry. A free copy of your credit file is available every 12 months from one or more of the credit reporting agencies in Australia. This is essential particularly if settlement is drawn out over a number of years.

    10. Seek help from a professional credit repairer for any defaults, Writs or Judgments. Once outstanding accounts accrued by your spouse are paid, there is the issue of the bad credit score which needs to be cleared so you may have the opportunity to borrow again in the future.

    Gen X’s Bruce Bammal describes the steps people can take if they find themselves in a post-relationship debt crisis:

    “If an ex has done the dirty on you financially, urgently get hold of your credit file to see exactly what damage has been done. They’re free through Dun & Bradstreet (dnbcreditreport.com.au) and Veda Advantage (mycreditfile.com.au).

    Assess the damage and start repair jobs, if possible, by contacting the organisations directly. Then follow up with the credit reporting services.

    Cancel joint accounts and credit cards. End all financial ties. See a specialist about recovering from sexually transmitted debt,” he says.

    The repair jobs Bruce talks about on a person’s credit rating could be small or could be significant. But if the bad credit rating really shouldn’t be there, if the listing contains errors or inconsistencies, then the negative effect on the person’s finances should warrant attempting to have the bad credit history removed.

    Current legislation does allow people to have inconsistencies removed from their credit file, but the whole process is more complicated than most people are led to believe.

    Credit reporting is governed by strict laws that the creditor must abide by, and there is no point people going in to bat for themselves without an extensive knowledge of this credit reporting legislation and a good ability to negotiate with creditors.

    In reality many people are not successful when they attempt to fix bad credit themselves. Remember, often it is a large creditor which put the listing there in the first place, so people need to know what to say to these companies and the way to say it. They also need to be thoroughly schooled in the legislation (or have enough time to get to know it), to ensure a successful credit repair. Basically people are preparing a ‘case’ to show reason as to why the creditor should remove the listing.

    In the preparation of this case and presentation to the creditor there are many instances where individuals can write, do or say the wrong thing, which can not only mean they get the creditor ‘offside’ but can damage the chances of having the listing removed for the entire term of the listing. So for the best chance at success, consult a reputable credit repair company. Visit our main website at www.mycra.com.au or call tollfree 1300 667 218.

    Image: graur codrin/FreeDigitalPhotos.net

  • Graham the ‘Credit Corrector’ placed No.24 in Top 50 – Start-Up Smart Awards 2012

    Entrepreneur Graham Doessel is delighted to announce placement at number 24 in the Australian Start-Up Smart Awards 2012 for his credit rating repair company, MyCRA Credit Rating Repairs.

    Graham was once Australia’s most successful non-conforming broker. Now he’s a full-time ‘credit corrector’ and consumer advocate challenging creditors to improve accuracy in credit reporting – one listing at a time.

    An excerpt from the Start-Up Smart Awards website explains the beginnings of MyCRA Credit Rating Repairs:

    “At the busiest time in his career, Graham Doessel was diagnosed with cancer. Up to his ears in work, he was forced to step back from it all in order to make a full recovery.

    While Doessel was receiving treatment, he witnessed the negative impact of the global financial crisis on credit applicants. In the wake of it all, Doessel decided to do something.

    He developed My CRA for the sole purpose of giving customers the cleanest credit file possible.

    The idea behind the service is to give customers the best chance of getting approval, secure a lower interest rate or reduce the upfront fees that can be associated with obtaining credit.

    Doessel’s life experience, as both a broker and as a consumer at the wrong end of consumer credit reporting, drove him to create MyCRA Credit Rating Repairs from the ground up.

    After extensive study of Australian credit reporting legislation, he was able to come up with a framework to correct credit rating errors.

    It was now possible to work on behalf of a client and actually repair their credit rating, instructing creditors to remove negative listings where they were listed incorrectly or unfairly.

    That’s how MyCRA Credit Rating Repairs was born.

    According to Doessel, the most challenging part of starting up was getting leads and contacts, but this forced him to be creative and resourceful, particularly on a tiny budget.

    “There is a massive demand for what we do at MyCRA. The barrier to entry is very high but MyCRA overcame all of those challenges on limited to no budget,” he says.

    Doessel says the best part of starting his own business is “doing something that can make a tremendous difference to the lives of so many people, and getting paid to do it”.

    He is now an active executive member of the Credit Repair Industry of Australasia and has interests in a direct debit service firm,” the website reports.

    The recognition from the Start-Up Smart Awards has been significant, with Start-Up Smart also placing MyCRA Credit Rating Repairs amongst the Top Ten new trends for 2012 in the finance category.

    “As the banks toughen their lending criteria, the finance industry is witnessing the emergence of a new type of business – one that aims to make it easier for consumers to obtain credit and finance.

    My CRA, which appears at number 24, was developed for the sole purpose of giving customers the cleanest credit file possible.

    The idea behind the service is to give customers the best chance of getting approval, secure a lower interest rate or reduce the upfront fees that can be associated with obtaining credit,” Michelle Hammond reports in the article 10 trends from the 2012 StartupSmart Top 50.

    The MyCRA Credit Rating Repair mission is to empower people through negotiating the removal of listings, thereby restoring integrity allowing their clients and their families to regain control over their future.

    The reason consumers very often need help when removing listings is two-fold. Firstly, their often limited knowledge of credit reporting legislation (and lack of time to get to know it) leaves them unsure of how to apply the letter of the law in their own circumstances.

    Secondly, negotiating with creditors can be tricky. Clients have to know who to talk to and the way to talk to them. Sometimes people can do more harm than good when trying to fix their own credit rating.

    MyCRA looks after clients who are facing identity theft or Identity Fraud; those with default listings incurred during separation from their spouse or other partners; 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, human and computer errors.

    Under current credit reporting legislation, consumers are entitled to obtain a free copy of their credit report from the credit reporting agencies once a year.

    But if people find inconsistencies on their credit report, they can run into difficulty.

    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 rating 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.

    MyCRA was founded as a means of championing for the underdog in these situations. The company believe everyone should have the right to redress for mistakes in the credit reporting industry.

    For the future, MyCRA is hoping to increase their level of success by improving the frequency of removal and closing the gap on their current default removal rate.  My CRA has a previous track record of up to 91.7% of cases having a default removed.

    The team hope to accomplish this through further increasing skill level and team numbers, building even better relationships with creditors, and continuing to educate consumers on credit reporting.

    With CEO Graham Doessel’s heavy involvement with the Credit Repair Industry Association of Australasia (CRIAA) as an executive member, MyCRA has a strong policy of maintaining consumer advocacy and industry standards.

    MyCRA is proud to be a part of building a set of regulations for the credit repair industry through the CRIAA. They see the introduction of the CRIAA as a catalyst for enforcing change and bringing about a set of standards which will revolutionise the credit repair industry in Australia and New Zealand.

    MyCRA is also proud to be a Premium Corporate Partner with the Finance Brokers’ Association of Australia (FBAA).

     

  • Working away from home? This could impact your credit rating. How to keep your credit file clear when you’re working away.

    Australian miners – you may be the highest paid workers in the country, but in the credit rating repair profession, unfortunately you top the list as the occupation group most likely to get caught out with a bad credit rating. We tell you why you could be susceptible to a bad credit rating and how to ensure you keep your credit file clear – at home and away.

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

    If you are in the mining profession, a flight attendant, army personnel or any person whose profession takes you away from home, you can be likelier to suffer a negative listing on your credit file, namely because you can be away for long periods at a time, or because you can’t keep a close eye on day to day finances and accounts working such odd hours or geographical locations.

    Checking all bills are paid on time and that the account is running as it should be is often difficult when you’re a transient worker.

    Miners and other transient workers often set up direct debits for accounts, but this may not be enough to ensure your credit file remains clear. There can be a number of reasons why bills go to default stage – from correspondence not being read through to errors in the creditor’s billing system. Unfortunately transient workers often don’t receive notification that there is a problem until it is too late to rectify it and your credit rating suffers.

    MyCRA client and transient worker, Shannon recently had us assist in removing a Telstra default from her credit file.

    Shannon has worked as a chef in the mines for the past 8 years in Western Australia.

    She had recently relocated to Western Australia, but unfortunately for various reasons many of her bills were not forwarded on to her new address following the move. This included a Telstra bill, which unfortunately went into default.

    On top of not receiving many bills, she also received no notification  her bills, and in particular her Telstra bill was going unpaid. She also wasn’t notified of the default that had been placed on her credit file.

    It was only when Shannon applied for a home loan and was refused that she realised there was a problem with her account – and this is common.

    Shannon says she was probably at a disadvantage due to the nature of her employment.

    “In the mines, communication can be a problem. I can be out of contact for months at a time so it makes it difficult to keep on top of things. Telstra actually had addresses in their system that didn’t even exist. But this was the problem, I wasn’t getting all the correct information from where I was living, I had no idea the mail wasn’t coming,” she says.

    Shannon recommends anyone who works away from home have a Post Office Box to reduce the risk of mail being stolen or damaged in transit, and so that people can keep on top of their own finances, rather than having to rely on others.

    A credit file exists for anyone who has ever been ‘credit active’ and is used by creditors to assess risk and borrowing capacity of potential borrowers.

    The most common type of adverse listing is a default. Defaults are put there by creditors when accounts have remained unpaid for more than 60 days. Defaults remain on a person’s credit file for 5 years from the date of listing, and have the potential to severely impact a person’s ability to obtain credit.

    Currently, any default can be enough for an automatic decline with most of the major banks. Many lenders are even rejecting loans for excess enquiries such as two in thirty days or six within the year. Some people may even be unable to take out a mobile phone plan in their name if they have defaults on their credit file.

    It is a good idea to take a hard-line approach to your finances and bill notifications to ensure you are not caught out by issues that arise whilst you are absent from home.

    How to keep a clear credit file while working away from home:

    1. Reduce the amount of paper-bills that are sent. Use the internet for all bill payments or set up direct debits from accounts.

    2. Set up a Post Office Box, or appoint a trusted friend or family member to forward mail.

    3. Keep creditors up to date with changes on accounts. If there is ever a problem with bank accounts, or a change of credit or bank cards – ensure all direct debits are altered. This can be a common reason bills get left unpaid.

    4. Check up on credit accounts regularly. Make a point of checking your bills and making sure all payments are up to date.

    5. Don’t let bill issues slide. Take the time to sort out any discrepancies with bills as soon as possible. Accounts which are left unpaid for more than 60 days will be listed as defaults.

    6. Perform a credit file check regularly. Make sure everything is as it should be – including your current contact details and any credit entries. A free credit report can be requested from the major credit reporting agencies Veda Advantage, Dun and Bradstreet and Tasmanian Collection Service (if in Tasmania) every 12 months. A creditor may have listed defaults with one or all of these credit reporting agencies.

    7. Get inconsistencies fixed. If you find errors on your credit file, or feel a listing is unjust or shouldn’t be there, you do have the right to have incorrect information rectified.

    Miners and other transient workers are amongst the highest paid industries in Australia, but many of you are unable to utilise this money for big ticket items like cars and homes because your credit rating has blemishes. A credit rating repairer should be able to completely remove offending blemishes from your credit file, allowing you the chance to start with a clean slate.

    Contact www.mycra.com.au for information on how to repair a bad credit rating.

    Image: wandee007/ FreeDigitalPhotos.net

  • Graham Doessel – consumer credit advocate – reveals the gap has widened between the haves and the have nots

    For those people on a low income, statistics coming from the Australian Bureau of Statistics report that home ownership has transported low income households in Australia from the poverty line over the last six years, and buffered the hard times where low income is temporary. With house prices currently down in many areas, now could be a good time to get your credit history checked and try to buy your own home, potentially becoming one of the ‘privileged’ in Australia who own their own home – even despite low income.*

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

    According to the Australian Bureau of Statistics (ABS) in its article ‘Life on Struggle Street – Australians on low economic resource households’ home ownership can act as a buffer for people who experience periods of low income.

    “While regular income is an important economic resource for many people, wealth in the form of bank accounts, shares, superannuation or property can be drawn upon to smooth and support consumption over time, including during periods of low income,” the ABS says in this article.

    The information on low economic resource households was utilised from a larger article ‘Australian Social Trends March 2012’, released yesterday. This article draws on a wide range of data, to present a picture of current Australian social conditions.

    Australian Social Trends March 2012 uses data from the ABS 2003–04 and 2009–10 Surveys of Income and Housing, and the ABS 2009–10 Household Expenditure Survey.

    What seems apparent from the article is that the event of home ownership could potentially change a person’s life forever – particularly those people currently on a lower income, or those who expect to be on a lower income at some stage in the future (due to retirement, child-rearing etc).

    We know the benefits of home ownership – the home owner has the opportunity to accumulate wealth outside their income through projected capital gain, and they also have the potential to borrow against the home in some instances.

    The ABS puts this into perspective when deciding on what is considered a ‘low economic household’.

    “The advantage of taking into account wealth as well as income is that it excludes those with high wealth who enjoy reasonable levels of consumption despite a low level of income. This approach is therefore more likely to capture people most at risk of experiencing economic hardship, than analyses of income alone,” the ABS article Life on Struggle Street – Australians on low economic resource households explains.

    Home ownership lessens the risk of experiencing economic hardship.

    “This disparity between people in low economic resource households and the rest of the population is even more pronounced when it comes to wealth. The average equivalised net worth of people in households with low economic resources in 2009–10 ($53,500) was one tenth of the average across other households ($509,800). After adjusting for inflation, the net worth of low economic resource households had not increased significantly since 2003–04, while the average net worth across all other households had increased by 29%.

    “These data indicate that the disparity in both income and wealth between those in low economic resource households and the rest of the population had grown over the six years to 2009–10,” the article reports.

    It seems in the past six years it has been more beneficial than ever for people on lower incomes to have owned their own home. But unfortunately with rising house prices and an increased cost of living, saving for the deposit and actually qualifying for the loan can be difficult. Then, the global financial crisis hit, and banks have been making it even harder ever since for people to get a home loan.

    For those lower income owners who are lucky enough to qualify for a home loan, it is more vital than ever that their credit check comes back clear to be assured a loan.

    A clear credit file ensures people have the best chance of obtaining a home at the most affordable interest rate.

    So if people otherwise qualify for a loan, but have bad credit history which is holding them back, all may not be lost. They should talk to the team at MyCRA Credit Rating Repairs about potentially restoring their credit file. Call us on 1300 667 218 or visit our website www.mycra.com.au.

    The picture painted by the ABS of many of those low economic resource households who can’t afford a home of their own or other investments is a rather grim one.

    “Around a quarter (24%) of low economic resource households reported spending more money than they received most weeks, twice the rate of other households (12%). This gives an indication of the extent to which people, particularly in low economic resource households, may be forced to draw upon their limited assets or rely on credit from week to week simply to make ends meet,” the ABS says.

    Low income households also would find it difficult to raise emergency money:

    “In 2009-10, 43% of low economic resource households reported that they would not be able to raise $2,000 in a week for something important. In contrast, only 7% of other households reported being in this position.”

    “A range of other indicators of financial stress were more prevalent among low economic resource households: 10% reported that they had gone without meals in the past 12 months due to cash flow problems, while 8% had resorted to pawning or selling possessions. By contrast, only 1% of other households had been forced to either of these lengths.”

    Close to a third (31%) of low economic resource households reported that they had been unable to pay a utility bill on time in the past 12 months, and 20% had sought financial help from friends or family due to cash flow problems. This compares with 8% and 5%, respectively, among other households. One in ten (10%) low economic resource households were forced to seek assistance from welfare or community organisations, compared with 1% of other households,” the ABS says.

    At this end of the scale, lack of access to cash can be a difficult cycle to get in to. Those people suffering with defaults or other negative listings on their credit file could be faced with high interest rates in an emergency, putting stress on an already struggling household. People in this predicament should talk to someone about the options of removing negative listings which shouldn’t be there, from their credit file as well.

    Watch this short how-to video to find out how credit rating repair could help you.

    * The opinions in this article should not be construed as financial advice. For expert advice on whether home ownership is right for you, contact a Finance Broker or Financial Adviser.

    Image: Dan / FreeDigitalPhotos.net

  • Consumer advocate Graham Doessel, showing ordinary Aussies how to avoid bad credit history from credit card debt

    A major source of bad credit history is credit card debt. People spend more than they can afford, and may even take out one card to pay off the other – and never really clearing their debts until one day their credit rating is tarnished. Credit success begins with choosing the right credit card. It’s important to read the fine print before you decide on a credit card. Avoid getting enticed by rewards and low interest periods, and take the time to understand what you can afford so you can choose the card that fits you and your lifestyle. That’s the key point to avoid bad credit history through credit card debt.

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

    Australian money saving website, Savingsguide.com.au posted a great article yesterday on choosing a credit card. They mentioned how essential choosing the right credit card is to your finances – it can be the difference between good and bad credit history. Here are their 5 tips for choosing the right credit card.

    5 Tips When Getting A Credit Card by Savingsguide.com.au:

    1. At The End Of The Month. If you’re unable to pay off your credit card at the end of the month, Yahoo! Personal Finance suggests looking for cards with 45 days of interest free and then cards that have the lowest interest on purchases. I would also suggest keeping credit use to a minimum until you’re able to pay it off at the end of the month.

    2.  Fee. If you’re planning on using your credit card frequently and for rewards programs, then an annual fee might be a worthwhile spend. You could be looking at anywhere between $50 to $250 a year, but if you’re redeeming your points for money-saving purchases like flights or accommodation, it might be a worthwhile investment. If, however, you’ve got the card as an emergency back up when you go overseas, you may as well just get a card that doesn’t have an annual fee.

    3. Interest Rate. When getting a credit card, it’s essential to weigh up whether any outlay on the card is a worthwhile investment. The same is as true of interest as it is of the annual fee. The card might have a high interest rate but if you can be certain you’re going to be able to pay it off at the end of every month, then those cards can also offer great rewards. Often, it’s stipulated you have to be earning over a certain amount to qualify to use the card.

    4.  Use It Everywhere. People look dismayed when they come to my work and pull out an Amex or Diners. Sure, we can transfer it. At the cost of a 3% surcharge, which usually precludes anyone from wanting to use it. Amex and Diners come with great rewards but a lot of businesses, at least in my town, have no interest in processing them so you have to rely on two cards. Recently, however, cards have been released where they are two cards in one (an Amex and Visa, or an Amex and Mastercard). So if you’re keen for the reward points, it could be worth investigating that option.

    5. Bonuses. Credit cards are big business, and they want to make sure that they keep yours. Hence, the amazing world of bonuses for your credit cards. The most obvious, and the most commonly used, is the protection should you be a victim of fraud. If it happens on your credit card, the bank will usually cover you as part of your credit card contract. If the same thing happens on your debit card, you’re not always as lucky. Other bonuses can include short-term insurance on items bought on your credit card or little luxuries like privileged access to concert tickets when they go on sale and the best seats. If a credit card fulfils all your other criteria, a bonus scheme could be a great way for you to save a bit of money throughout the year.

    Some great advice there on choosing credit cards. One important point is to not be sucked in by promises of rewards or other special deals when choosing credit cards – concentrate on the fees, interest and repayments. If you can afford all of that, then look at the possible benefits rewards can bring.

    Here is my advice to prevent bad credit history from credit card debt:

    Create your own credit limit.
    Set yourself a limit based on what you can comfortably afford to repay. It’s important to realise that you will pay at some point for the credit you use. Make sure at worst case scenario you can afford to repay it. You will then have confidence in your spending without the temptation to overspend.

    Don’t exceed the credit limit.
    This will just mean you incur hefty charges.

    Pay off the balance each month.
    Ideally, pay off the entire card balance within the interest free period. If you don’t, you will be charged interest right back to the date you purchased each item. You not only lose the interest-free period on those past purchases, but until you pay off the balance there will be no interest free period on anything you spend in the future.

    Or, choose a low interest card, but still pay more than the minimum repayment amount each month.
    If you have debt which carries over on your card month to month you should look at a card that has a lower interest rate. It may not offer an interest free period, or hefty rewards points, but the lower interest rate should mean the carried over debt is more manageable for you, and will prevent possible bad credit history.

    Avoid cash advances.
    Interest usually applies immediately on any cash advances from credit cards – whether the withdrawal is within the interest free period or not.

    For help with repairing bad credit history, or more information on your credit rating, visit our website www.mycra.com.au or call MyCRA Credit Rating Repairs tollfree on 1300 667 218.

    Image: worradmu / FreeDigitalPhotos.net

     

     

  • How to help more clients… A former award winning broker shows why the millions of Aussies with bad credit are not lost

    Those brokers who are just in it for the money are few and far between in this market.  Those that have hung around despite all the market conditions thrust upon them must have a passion for the job, and a drive to see people realise their dreams of home or business ownership. We show you why more of the people you come across every day could end up being your biggest fans and clients for life.

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

    As brokers, you are restrained by so many conditions which are simply out of your control in the current market.

    Left over from the Global Financial Crisis (GFC) are tighter lending conditions and nervous borrowers. Put this together with regulations for National Consumer Credit Protection (NCCP) compliance, and the result is unfortunately a diminished client base.

    Let’s face it – in this market, if you have to pick between a client with a perfect application or one which is slightly tarnished or impaired with bad credit (paid or unpaid), then it’s likely that you’ll choose the squeaky clean one…no headaches, no worries…and no extra indemnity insurance on a non-conforming loan.

    But most brokers do not know there is another way.

    In more than 9 out of 10 cases, bad credit history can actually be repaired. Engaging credit rating repair for a bad credit client gives the client the home at the best possible interest rates, and you the commission – and trail.

    Everyone wins.

    Plus, all parties are doing their part to help improve consistency in credit reporting through ensuring creditors enter listings fairly and accurately.

    For those who don’t know, here is how credit rating repair works…

    Bad credit can occur for a number of reasons:
    • Due to a dispute on a bill, such as a telephone or power bill;
    • Because of a change of address;
    • A major sudden upheaval such as illness or death;
    • Identity theft or fraud; or
    • Simple human error by the creditor

    The creditor defaults the consumer on one or more of their credit records held by the three (soon to be four) Credit Reporting Agencies in Australia.

    Defaults and other negative listing entries are strictly controlled by several pieces of legislation and several more codes of conduct. This aspect itself creates many grey areas and of course, is subject to interpretation.

    Consumers are blessed in Australia to live in a place where they are highly protected. Some of these protections are spelled out throughout the several thousand pages of legislation that works with and around Credit Reporting Law.

    Because the legislation is lengthy and involved, it gives those that are informed quite a lot of power. This knowledge is sometimes weighted heavily on the side of the creditor and leaves consumers with little ability to effect change in their own circumstances.

    For this reason, credit rating repairers have grown in popularity, as we are often the only people on the side of the consumer with the knowledge needed to fight the case on their behalf.

    As credit rating repairers we know this legislation. We review and consult it on a daily basis, looking to discover new and interesting methods to have bad credit set aside.

    During the process of discovery, we receive mountains of paperwork from your client’s creditors – which often include account statements, invoices, contracts and file notes.

    We review this documentation, constantly referring back to the legislation to formulate a case for your client. Once we are aware of any errors in the way the listing was added to your client’s credit report, we alert the creditor that the listing may be unlawful and request its immediate removal.

    At this stage it can sometimes get interesting, as many creditors genuinely believe that what they have done has been lawful and it’s up to us to educate them on where they have made errors.

    Occasionally, this can be a lengthy process and sometimes it may require the assistance and rulings of external governmental bodies.

    In more than 9 out of 10 cases, your client will be victorious. They can then go back to you to have their mortgage approved, their home loan settled, and their family can move into their very own home.

    I’m imagining a blue, round kiddie pool in the backyard, with a little sandy coloured puppy chasing the kids as they run up the slide to the cubby house, laughing and giggling all the way. That was my backyard a few years ago. My kids are all grown up now – one is about to get married. But those fond memories of us as a young family in our own home still remain.

    That is the power you have in your hands right now – to make someone’s dreams come true.

    Contact MyCRA Credit Rating Repairs tollfree on 1300 667 218 to speak with a consultant about our broker referral system.

     

    About Graham Doessel and MyCRA Credit Rating Repairs.

    Graham Doessel is the founder and CEO of MyCRA Credit Rating Repairs – Australia and New Zealand’s leading credit rating repair specialists.

    Graham’s origins are in finance, and he formed/owned the award-winning non-conforming brokerage “Mortgage Now.”
    Graham is a consistent spokesperson in the media for credit reporting issues in Australia and New Zealand.

    MyCRA Credit Rating Repairs, now in its fourth year of operation, has recorded an impressive track record of up to 91.7% rate of removal of inconsistent or inaccurate negative data from the Australian and New Zealand credit reports of both consumers and commercial entities.

    Graham and MyCRA Credit Rating Repairs are proud to be a part of developing a self-regulating framework for the credit rating repair industry through the lead role in the formation of a credit rating repair industry body.

    MyCRA Credit Rating Repairs is nominated for the 2012 Telstra Small Business Awards and the 2012 Start-Up Smart Awards.

  • Older Australians at risk of cybercrime: Super funds a prime target

    Personal information has become a valuable commodity in cybercrime circles. It can be extracted, abused and traded for identity theft purposes and to take advantage of someone’s good credit rating. And as many older Australians are finding out – it can also be pilfered to make some crook wealthy through hijacking Super Funds – without the victim knowing a thing about it.

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

    Australian Federal Police warn that older Australians may be susceptible to identity theft, phishing and data mining activities and in particular Superannuation Fraud, according to Technology Spectator.

    Its article ‘Super funds under threat from cyber criminals: AFP’ also reveals that this susceptibility is coupled with a lack of protection around identity verification with self-managed super-funds.

    An Australian Federal Police submission to the Joint Select Committee of Cyber Security recommends wider education about internet awareness for older Australians.

    The AFP says the combination of wealth and size of this population demographic is tempting for fraudsters:

    “Seniors citizens are accessible, they represent the fastest growing demographic in our ageing population and they hold a large portion of Australia’s wealth. Therefore, they are an attractive potential target for, and may fall victim to, an array of scams and frauds,” the AFP said in their report.

    In June last year we blogged about the growing trend of hacking super funds in a post titled ‘Identity theft News: Latest Warnings and Recommendations’.

    At the time, NSW Police had advised the public of a scam targeting Super Accounts, where fraudsters were stealing enough information from unsuspecting victims to transfer their Super into self-managed funds which could then be easily accessed by the criminals. In effect, criminals were hijacking Super funds.

    Fraud Squad Commander Detective Superintendent Col Dyson said “Superannuation fraud…works well because no-one checks their super…victims rarely notice account changes, making it easy for criminals to change mailing addresses.”  Read more on this story ‘Crooks siphon super funds,’ on CRN Australia’s website.

    Unfortunately, unlike bank fraud, there is no obligation for superannuation funds to reimburse victims, and if the fraud occurs on overseas shores, there is unfortunately very little chance of recovering the stolen money.

    There is also the chance that personal information may be further abused by fraudsters taking out credit in the victim’s name once the Super transfer is successful. This can lead to a series of defaults and bad credit history, which can be hard to recover from.

    People should contact Police for what to do if they have been a victim of Superannuation Fraud or any form of identity theft.  They may advise of the victim’s possible eligibility for a Commonwealth Victims of Identity Crime Certificate, which would at least aid in talking to creditors when the victim attempts to remove their bad credit history and recover their good name.

    People should also check their credit report for any signs of misuse – changes in contact information, strange credit enquiries they didn’t initiate and even new credit can all be signs of identity theft. A credit report is free every year, and can be obtained from the credit reporting agencies.

    For help with identity theft recovery, or for more information on identity theft and how it can affect a person’s credit file, contact MyCRA Credit Rating Repairs on 1300 667 218 or www.mycra.com.au.

    Image: Ambro / FreeDigitalPhotos.net

  • Slam Scams! Surge in phone scams reported in Australia

    To continue with passing on information from the Fraud Week campaign we look at phone scams – the most popular form for delivering scams in Australia, now apportioned to over 50 per cent of the overall scams reported. All Australians need to know that their personal information is as valuable as their bank account details. Giving personal information or account details over to people who call on the telephone could leave people vulnerable to identity theft and potential credit file misuse.

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

    The Australasian Consumer Fraud Taskforce is urging Australians to slam the phone down on scams following a surge in reports of scams delivered over the phone in 2011. Read more at: Phone No. 1 choice for scam delivery: ‘Slam Scams!’ Fraud Week campaign.

    A report released yesterday by the Australian Competition and Consumer Commission (ACCC) titled 2011 Targeting Scams revealed a significant shift in scam delivery methods. Whereas the trend in recent years has been for scams delivered online, in 2011 over 50 per cent of scams reported to the ACCC were perpetrated by phone.

    The ACCC says consumers and small businesses contacted them almost 43,000 times in 2011 to report scams they had received by phone. Australians lost over $27.7 million dollars to these scams throughout the year.

    Common phone scams reported in 2011 included:

    Callers pretending to be from government: In 2011 the ACCC saw large numbers of advance fee scams initiated by telephone. Many involved scammers posing as representatives from government departments, for example offering fake grants, rebates or refunds in return for up-front payments.

    Callers pretending to be from companies: In 2011 it was also common for scammers to pose as staff from well known companies and organisations asking for personal details, payments or remote access to the victim’s computer. Scammers posed as representatives from banks, computer companies like the recent Microsoft Phone scam, telecommunications services, postal and logistics services, and solar panel installers.

    Scam SMS: Text messages are also commonly used by scammers to send competition or prize scams. Scammers often try to snare many people with one SMS sent en masse – this is known as spamming. Scammers may request personal details or payments in scam SMS messages. If you respond, you could also be charged at premium rates or find yourself signed up to a costly subscription service.

    Personal information is a valuable commodity. Remember – if someone is calling YOU they should not need to request personal information. If in doubt – hang up!

    The ACCC gives this advice for protection against phone scams:

    “Be cautious if you are contacted by someone claiming to be from government or a well known company and they request personal details or up-front payments.

    If you are in doubt about the authenticity of a call, don’t commit to anything. Instead hang up and call the company or government department directly using their official customer service number to verify that it is genuine. Never use contact details provided by the caller, instead find the number via an independent source such as a phone book or online search.
    Never confirm or provide personal details, credit card numbers or other account information over the phone unless you initiated the call and trust the other party.

    If you receive a phone call out of the blue about your computer and requesting remote access – hang up – even if they mention a well-known company. Never give an unsolicited caller remote access to your computer.
    Remember that you can still receive scam calls even if you have a private number. Scammers can obtain your number fraudulently from black-market sources,” the ACCC says.

    If people think they may have given out personal information or account details to scammers, they should contact the Police immediately. They should also contact their financial institutions to let them know they could be a potential identity theft victim.

    They should also contact the credit reporting agencies and request a copy of their credit report. A credit report is free every year and will alert people to any changes on their credit file that they didn’t initiate. They may also be able to ‘flag’ their account to stop activity while the possible identity theft is being investigated.

    For help with restoring your credit rating and to remove bad credit history contact MyCRA Credit Rating Repairs on 1300 667 218 or www.fixmybadcredit.com.au.

    Image: Andy Newson / FreeDigitalPhotos.net

  • One in four Australians short of cash would default on mortgage

    More struggling Australian families than ever do not expect to manage their existing debt levels in the coming months. The numbers of families expecting to have to default on credit like mortgages, utilities, phone and internet bills in the coming months has increased. One in four Australians would default on their mortgage if they were short of cash. This is a worrying trend, and points to a continued lack of knowledge about the ramifications of defaulting on bill payments. For people who end up with bad credit history, they can potentially enter into a cycle of debt that can take years to recover from.

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

    Alarming statistics have arisen from Dun & Bradstreet’s Consumer Credit Expectations Survey from this month – projecting into the June 2012 quarter.

    Over a third of Australian families will struggle to manage existing debt levels, with nearly half (46%) of low-income households expecting difficulty managing their debt. This represents a rise of eight percentage points since the fourth quarter of 2011, 11 points above the national average.

    Here are some of the statistics coming out of this survey:

    Default expectations

    – Overall, more than one in four (26%) of Australian consumers who are short of funds would forgo a mortgage payment.

    – Of those families that do find themselves short of cash in the coming months, more than one in ten (12%) would default on a mortgage repayment or internet bill. Fourteen per cent of families would choose to default on their pay television account.

    – Nearly one in five (19%) low-income households would sacrifice an electricity bill, three percentage points above the national average.  While six per cent would forgo a mortgage repayment.

    – An increasing number of young Australians also plan to default on mortgage repayments if short of cash. The survey also found 18 per cent of 25-34 year-olds said this would be the first bill to be sacrificed during low cash flow periods. This also increased noticeably among West Australian (up 13 points to 20%) and Victorian (up six points to 11 per cent) consumers.

    Credit use expectations

    – Number of consumers planning to use redraw facilities on their mortgage to make a major purchase was up four percentage points year-on-year to 22 per cent.

    – 41 per cent of Australian households with children will be forced to rely on a credit card to cover living expenses, up two percent since late last year.

    – A growing number of households earning less than $50,000 a year are planning to use credit to cover costs (41%), up from 37 per cent in the December quarter 2011.

    – However, 27 per cent of families plan to apply for new credit or a limit increase during the June quarter.

    According to Dun & Bradstreet’s CEO, Gareth Jones, the survey results indicate a worrying cycle of debt accumulation and dependency among struggling consumers.

    “Nearly one-in-three low-income households expect rising household debt levels, but with limited ability to pay this down. When consumers are increasingly forced to accumulate debt they are unable to manage, just to keep the family finances afloat, this has the potential to quickly become a vicious cycle,” Mr Jones said…

    “Before consumers apply for more credit they should assess whether or not they can afford to repay the funds and check their credit report to ensure there are no black marks listed on their file that could make it harder or more expensive to get credit,” he said.

    These statistics show that we are just not doing enough to educate large groups of the Australian population on the ramifications of increasing debt, and the importance of meeting credit commitments. Unfortunately, we can’t do anything about the rising cost of living for them, but we can help people prioritise. There needs to be a major shift in the Australian psyche about all credit and a major education campaign on managing debt. I think if we don’t want to end up with some kind of credit crisis in Australia – it is essential.

    Gareth Jones puts it finely when he makes the point about how consumers view bill payments:

    “Consumers tend to view non-core expenditure such as phone or internet bills as dispensable, however the damage to an individual’s credit history can be an issue irrespective of the type of account defaulted on. The default will stay on a credit report for five years and can severely limit a consumer’s ability to access affordable, mainstream credit in the future,” Mr Jones said.

    The ramifications of overdue accounts

    Any credit commitment which is more than 60 days in arrears – whether that is a mortgage, a credit card or a phone bill – is considered an overdue account, and a creditor will list this overdue account on the consumer’s credit file as a default.

    A default on a credit file is considered a ‘bad credit rating’ by all major lenders, as well as phone and utilities companies.

    The consequences of a consumer having a default on their credit file is refusal of applications for credit through most mainstream lenders for 5 years from the date the default is listed on the consumer’s credit file. The consumer is then forced to either seek alternative credit – often at sky-high interest rates, or do without credit for 5 years.

    We worked out consumers with defaults on their credit file or a bad credit rating will be hit with a whopping average $15,046.57 or more in additional home loan repayments over the first three years of their loan (this calculation is based on a home loan of $300,000 over 30 years on non-conforming loan interest rate of 9.5% vs standard variable rate of 7%).

    What this could mean for Australian consumers

    If, as the Dun & Bradstreet Consumer Credit Expectations Survey predicts, the number of Australians who say they have to use credit to pay down debts is increasing – and the number of Australians who say they may default on credit is also increasing – we could see more and more people thrown into a cycle of having to find alternative credit sources at high interest rates as the only means of paying down debts. Or alternatively we could see a higher rate of bad credit history – defaults, Court proceedings and Bankruptcies across the board in Australia.

    When a consumer seeks credit rating repair, often times they have been uneducated on how they should have handled their difficult circumstances and particularly financial hardship, prior to the default being issued on their credit file. In this instance I believe the job of a credit rating repairer can be two-fold, in one instance we are repairing the credit rating, and in the second we are educating those consumers on what the correct procedure should have been when faced with that scenario.

    If more and more people are in crisis,  then the finance industry, credit industry and government as a whole need to tell struggling consumers about their options for managing debt.

    Consumers need to know throwing away their financial futures by defaulting on repayments is the last option, not the first when they are struggling with their debts.

    For more information on obtaining and managing credit, or for information on clearing credit rating inconsistencies through credit rating repair, contact MyCRA Credit Rating Repairs tollfree on 1300 667 218 or visit our website www.mycra.com.au.

    Image: renjith krishnan/ FreeDigitalPhotos.net

    Image: Pixomar / FreeDigitalPhotos.net

  • Slam Scams! Anyone can end up a victim of scams and identity theft

    Scams are not just reserved for the elderly or the technologically unsound – although these people can be vulnerable. In reality, scams are so prevalent and can be so sophisticated that anyone can find themselves a victim of a scam. For National Consumer Fraud Week, myself and my team at MyCRA Credit Rating Repairs want to help promote the realisation in the community that scammers are out there every day draining bank accounts and leaving you with a bad credit history for years to come.

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

    ‘Slam scams’ is the theme for National Consumer Fraud Week 2012 run by the Australian Consumer Fraud Taskforce (ACFT).

    Their aim is to educate Australians on the prevalence of scams in everyday life, and the often sophisticated nature of scams.

    Here’s an explanation of the Week as featured on the ACCC’s SCAMwatch website:

    “Have you ever received a phone call or SMS out of the blue, a phishy email or ‘lucky’ letter, an unknown knock at the door or a strange request from an online friend or admirer? National Consumer Fraud Week 2012 runs from 19 to 25 March and is all about raising awareness of scam delivery methods so that you can identify and slam a scam at the point of contact.

    Scammers are increasingly sophisticated in how they deliver scams, taking advantage of new technology and communication methods to try and slip under your radar. Online platforms and mobile technology such as emails, social networking sites, smartphones and tablets make it easier to connect with people around the world and communicate in real time anonymously, privately or publicly. Unfortunately, scammers also take advantage of these benefits to target you.

    Scammers are also not afraid to adopt a personal touch such as contacting you at home on your phone or at your door. They will try and push your buttons by playing on your emotions to evoke a sense of guilt, anxiety or fear. They also use slick tricks such as professional-looking websites or documents, and often pose as someone or an organisation that you know and trust.

    Scammers will use any means to deliver a scam and get you to part with your money or personal details. If you receive a scam, slam it!

    Remember to press delete, throw it out, shut the door or just hang up.

    Tips to keep scammers at arms length

    DON’T RESPOND
         Ignore suspicious emails, letters, house visits, phone calls or SMS – press ‘delete’, throw them out, shut the door or just hang up

    WATCH OUT FOR SLICK TRICKS
         Scammers use sophisticated tricks to fool you such as fake websites, glossy brochures, technical jargon or posing as someone that you know and trust – don’t fall for them!

    DON’T LET SCAMMERS PUSH YOUR BUTTONS
    Scammers will play on your emotions to get what they want

    PROTECT YOUR IDENTITY
         Your personal details are private and invaluable – keep them that way and away from scammers

    Fighting fraud: we can all play a part” SCAMwatch says.

    The Sydney Morning Herald has this morning featured scams in this article titled $85m lost in business scams last year:

    “THE Australian Competition and Consumer Commission received 83,150 reports of scams from small businesses and consumers in 2011, almost double the number the year before and more than quadruple the number in 2009, according to its annual scam report, to be released today.

    More than $85 million in losses were reported, up 35 per cent.

    Michael Schaper, chairman of the Australian Consumer Fraud Taskforce and deputy chair of the ACCC, said the number of scams was likely to be higher than reported, because many victims were too embarrassed to come forward,” the Sydney Morning Herald reports.

     

    Table from Sydney Morning Herald

    Slam scams and stop credit file misuse

    People need to stop feeling embarrassed that they have fallen victim to scams, and start coming forward about their experiences. Unfortunately many people who are victims of a scam have also given over lots of personal information in the process. This can lead to identity theft and the scammers taking credit out in the victim’s name.

    Embarrassment aside, these victims are stuck unable to take out credit while their credit file shows a series of overdue accounts they had no knowledge of, and are not responsible for. . Not only are scams damaging short term, but the effects can be long-ranging. Victims are unable to take out credit for 5 years while their credit file shows this bad credit history.

    The more these victims are ridiculed for somehow being ‘gullible’ the more they will hide away and not speak out about the instances of scams. Also, the impression that these scams are easy to detect will remain in the wider community.

    We need everyone to know these scams are not obvious. Scammers are clever and they have plenty of patience.

    But if something doesn’t ring true…the best thing people can do is stop the contact, and verify the information of the person before they proceed.

    And remember the golden rule, before giving out money or personal information – no matter who it is – people should do all they can to make that transaction as secure as possible.

    For scam victims…one of the essential tasks to perform while notifying your bank is to check your credit file is not showing any bad credit history put there by scammers.

    If you think you may have been a victim of a scam, talk to us confidentially tollfree on 1300 667 218 or visit the main website www.mycra.com.au about what this could mean for you and your credit file – and how we can help you restore you good name.

    Image: David Castillo Dominici / FreeDigitalPhotos.net

  • Small business credit hard to obtain

    An interesting article featured in Broker News today, for those interested in small business lending criteria, and small business credit files.

    It is harder than ever for small businesses to borrow. The story, titled ‘Lenders blasted for small business risk sums’ features Credit Reporting Agency, Dun & Bradstreet criticising lending criteria when it comes to small business.

    D & B says up to 400,000 small businesses who should qualify for finance are missing out due to the inability of credit providers to adequately assess and price their risk.

    Here is an excerpt from that story:

    Dun & Bradstreet has said that up to 400,000 businesses would immediately qualify for finance with a risk profile ranging from minimal to low, out of more than one million unincorporated businesses.

    CEO Gareth Jones said lenders have historically been hesitant about extending credit to small businesses as many are unincorporated entities with little or no commercial credit history.

    “Previously, it has been nearly impossible to appropriately assess small business risk as small businesses are often indistinguishable from their owner – the commercial and consumer entity are the same,” he said.

    “A holistic picture of small business risk can only be obtained by acquiring an understanding of an entity’s commercial and consumer profile,” Jones said.

    The comments came as Dun & Bradstreet launched a ‘Small Business Risk Score’ that brings together information from its database on both a commercial enterprise and its owner to enable risk assessments.

    The score predicts the likelihood of a small business entering bankruptcy over a 12 month period, based on factors including business to business payments, time since the last consumer default, and the volume of credit enquiries.

    The lines between personal and small business credit files do blur quite frequently. Often one credit file affects the other when creditors are looking at suitability for finance.

    To give people the best chance at small business credit, they should remove bad credit history like defaults and even excess credit enquiries from either or both credit files prior to applying for small business credit.

    It may be that credit file errors and inconsistencies are holding small businesses back from expansion – in which case there is a good chance they can be removed.

    For more information on bad credit history, contact MyCRA Credit Rating Repairs tollfree 1300 667 218 or visit the main website www.mycra.com.au.

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

    Image: renjith krishnan / FreeDigitalPhotos.net