MyCRA Specialist Credit Repair Lawyers

Tag: new credit laws

  • New credit laws: the single best thing you can do to prevent bad credit

    change attitude to billsChange your attitude towards paying your bills, and change the likelihood you will suffer from bad credit. That is the single best thing you can do to prevent bad credit in the form of defaults, and now, the dreaded late payment notation. It’s not rocket science of course, but changing your financial attitude and stopping the crazy juggling act is one of those things I have seen in my time that most people on the slippery financial slope don’t do, that they could do to get themselves on the road to long term financial recovery long before they have defaults. Without defaults or late payment notations on your credit file, you score much better in the lender’s systems. You have a much better chance at securing credit in the future, including major credit like a home loan.

    By Graham Doessel, Non-Legal Director of MyCRA Lawyers www.mycralawyers.com.au.

    Although we would like to believe that the credit system is foolproof there are always going to be instances where Credit Providers make mistakes, and you cop bad credit unjustly or incorrectly. That you can’t help. T

    he type of bad credit I’m talking about is the bad credit which is directly attributed to you not paying your accounts on time. Instances where it’s either entirely or mostly your fault.

    With our new credit laws in place, it is quite likely that at some point most Credit Providers holding an Australian Credit Licence (eg banks and building societies) will sign on to comprehensive credit reporting and be able to access and report on your repayment history. So if you’re late by more than 14 days paying your credit card, personal loan or home loan, you run the risk of having a late payment notation recorded on your credit file and remain there for two years.

    A story yesterday from the Brisbane Times, Telcos and utilities could suffer under new credit rules quotes the Australian Retail Credit Association (ARCA)’s Damian Paull. ARCA are the guys that devised the Credit Reporting Code of Conduct, to go with our new Privacy Laws. Mr Paul said there is a danger that banks who chose not to report consumer repayments information and telcos and utilities – which are excluded from the new regime – could find there is a financial impact.

    “Once consumers get a sense of who is reporting, what’s going to happen?,” he said.
    “If I know bank X is reporting and Bank Y isn’t, what is going to happen to banks who do not report that information? What is going to happen to telcos and utilities?
    “Is that going to put pressure on these organisations and their payments – I think this is probably going to happen,” he told a conference organised by Informa in Sydney on Wednesday.

    These comments worry me, because it tells me that it is predicted that people who are struggling with their repayments will simply make their loan and credit card repayments on time, but miss the mobile or energy bill, because those are not subject to repayment history.

    Whilst this may be true, as someone who has been involved in the finance sector a long time, it is not a sentiment I want to accept.
    Fair enough, some months you may be a little short on cash. Yes, to avoid repayment history, you may want to pay your credit card, but leave your phone bill.

    But for those people who are consistently unable to meet all of their repayments on time – there was no mention in the article from any of those commenting, of what they should do, to get back on track.

    By acting early and taking advantage of new financial hardship laws, you can save yourself from mounting debt, late payment notations and defaults.

    If you are suddenly unemployed, fall ill, separate from your spouse or have a period of intense debt stress – you should know there are laws that may be able to help you through this difficult time. By putting your hand up early– before your accounts go into arrears – you could save your credit file. But why are there not more people aware of this?

    Time and again, I see people burying their heads in the sand, robbing Peter to pay Paul, until they are in so much debt it slaps them in the face. You should know that a bump in the road doesn’t have to mean you can’t borrow again, so long as you handle it the right way.

    New financial hardship laws brought out by the Government last year have been designed to protect consumers during times of temporary financial hardship.

    Last year, Steven Münchenberg, Chief Executive of the Australian Bankers Association, said in a statement to the media that only one in four bank customers knew that banks offered hardship assistance.

    As a company involved in credit dispute, MyCRA Laywers has helped many clients in the past dispute credit listings issued during a time of financial hardship.

    If the powers that be played a more proactive role in credit education, this issue would no longer be as prevalent.

    In the past consumers have not been offered hardship variations with their bank, or they have not been aware they have a right to request one and have been defaulted – this locks them out of mainstream credit for five years. If you are largely aware of your rights and obligations, then you might request a variation to your credit agreement early and potentially avoid the long term pain for what is often a very temporary issue.

    The earlier you act, the better off you will be. The key word here is ACT. Don’t hide from your Credit Providers and hope it will all go away. It never does.

    If you are experiencing temporary financial hardship you contact your bank or building society and ask to speak with the Financial Hardship Variation Team. Using the specific words ‘financial hardship’ will help make it clear to the bank what you need. Ideally, act before you fall into arrears on your account – to save your credit file when you recover from this difficult time.

    If you’re not at the point of needing a specific hardship variation with your bank, but you still struggle from time to time – don’t wait till everything goes belly up. There’s plenty of help out there for people who aren’t great juggling their finances or have found themselves over-committed. There are free financial counsellors out there who should be able to help you. Contact the Financial Counsellors of Australia www.fca.org.au for more help.

    Image: Danilo Rizzuite/ www.FreeDigitalPhotos.net

  • Widespread education campaign needed to save Australian credit ratings.

    Media Release

    repayment historyWidespread education campaign needed to save Australian credit ratings.

    4 December 2013

    A consumer advocate has welcomed Australian Retail Credit Association (ARCA) plans to educate consumers about new credit laws, but says full and immediate help from other key players within both the finance industry and government is essential to reach the millions of Australians whose credit ratings are currently at risk.

    Credit repair pioneer Graham Doessel, who is now Non-Legal Director of MyCRA Lawyers – a firm focusing on credit reporting law – says the powers that be have failed to ensure consumers were educated about new credit laws which are impacting them now.

    “From December 2012, information about consumer repayment history to licenced creditors – which includes credit card and loan repayments have been recorded – and the details of any repayments made past the due date will show on credit files as of March 2014,” Mr Doessel says.

    He goes on to say, “There has not been enough education to date about this important change, and possibly millions of Australians who have not been diligent with making payments by the due date could be affected.”

    The extent of consumer ignorance on new credit laws has been acknowledged by the Australian Retail Credit Association (ARCA), who announced last week they were developing a website aimed at helping consumers better understand credit reporting.

    ARCA’s own research revealed 59 per cent of people had not heard of the term “credit reporting.” Credit reporting agency Veda Advantage also recently published results of a survey showing that 80 per cent of people have never checked their credit history and 53 per cent were not aware that they could ask for a copy of their credit file. (1)

    ARCA’s chief executive, Damian Paull told Banking Day that ARCA’s new website, which he hopes to launch in the New Year, will explain the changes to the credit reporting system; explain how people can get access to their credit files; go through the issues that contribute to a good or bad credit report; and detail the financial hardship obligations of credit providers. (2)

    Mr Paull said ARCA members would be encouraged to provide links on their websites to the new site.

    Mr Doessel says ARCA’S approach – whilst positive, needs more than ‘encouragement’ – but massive national assistance to appropriately address the magnitude of the problems potentially facing Australian consumers.

    “With over 16.5 million consumer credit files held by Veda Advantage alone, we’re talking millions of Australians who need to be reached to prevent lax repayment habits impacting their future.”

    “The fact of the matter is – many Australians outside finance circles don’t know ARCA, let alone what comprehensive credit reporting is,” he says.

    He recommends both the financial sectors and the appropriate government bodies take up the education campaign.

    “I would like to see plans to incorporate a brief warning statement, plus direction for where consumers can go for further information on many standard Government letters such as Centrelink, Department of Transport and Australian Tax Office correspondence, in addition to warnings on all licenced credit statements,” Mr Doessel says.

    About MyCRA Lawyers    : MyCRA Lawyers is an Incorporated Legal Practice focused on credit file consultancy and credit disputes. MyCRA Lawyers means business when it comes to helping those disadvantaged by credit rating mistakes.

    /ENDS.

    Please contact:

    Graham Doessel – Non-Legal Director MyCRA Lawyers Ph 3124 7133

    Lisa Brewster – Media Relations     media@mycra.com.au

    www.mycra.com.au  www.mycra.com.au/blog

    MyCRA Lawyers     246 Stafford Rd, STAFFORD Qld Ph 07 3124 7133

    (1) http://www.veda.com.au/sites/default/files/images/ycai_launch_infographic_final_190913.pdf

    (2) http://www.bankingday.com/nl06_news_selected.php?act=2&selkey=15884


    Image: David Castillo/ www.FreeDigitalPhotos.net

  • Consumer groups push for changes to new credit laws

    In a final attempt to plead for correction of what many are calling some glaring mistakes for consumers within Australia’s new credit laws, a coalition of consumer groups is urging the Federal Government to make some changes before they pass the Privacy Amendments (Enhancing Privacy Protection) Bill 2012. We look at what this group is proposing, and how the new laws, if they are passed as is, could affect you and your credit history.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs

    A coalition of consumer groups is hoping the Federal Government will make some changes to their new credit reporting laws prior to the Bill’s passing by both houses. One aspect they are opposed to is the minimum debt amount for credit listings – which currently stands at $100 .Various recommendations to increase the minimum amount were submitted to The Senate Legal and Constitutional Affairs Legislation Committee recently. Consumer groups believe the minimum should be increased to $500.

    The consumer groups are: Financial Counselling Australia, Australian Privacy Foundation, Consumer Credit Legal Centre NSW, Consumer Action Law Centre

    Here is an excerpt from the group’s media release, which featured on Financial Counselling Australia’s website Small debts lead to big problems:

    Spokesperson Kat Lane of Consumer Credit Legal Centre, said ‘under the current proposal someone’s ability to access a home loan could be ruined by one overdue electricity or phone bill.’

    ‘It’s easy to fall 60 days behind on an energy bill—it could be something as simple as the bill being sent to the wrong address or the account holder being away from home for an extended period. I don’t think many people would think this should affect someone’s ability to get a home loan,’ said Ms Lane.

    ‘If the amount for which someone could have a default listed on their credit report was increased to $500, people would be far less likely to be overly penalised for one overdue bill or for making one simple mistake.’

    Ms Lane said many small debts listed on credit reports were utility or phone debts and didn’t necessarily reflect a person’s suitability for credit. She also said that smaller debts, such as phone or utility debts, are often disputed by consumers.

    ‘We’d hate to see someone’s credit history affected because of an outstanding bill which they don’t even owe. Billing mistakes do happen and, as the Government’s plan currently stands, these small mistakes could have big consequences.’

    The group is also concerned about the additional information which will be available to lenders once the new laws are introduced, and particularly repayment information. They recommend the Government do more to educate consumers on their rights and obligations under the new laws:

    ‘If comprehensive credit reporting is introduced, Government and industry needs to make efforts to explain the new regime to consumers, especially that repayment information such as whether you repay your loans on time each month will be now listed on credit reports, and consumers’ rights to make complaints if there are disputes,’ Ms Lane says.

    We agree with the group’s proposals in the interests of consumer rights. The Government must do more to educate consumers on their rights if they are going to insist that more information about them be made available to lenders. In my experience, many consumers collectively:

    1. Do not know they can apply for a free credit check every year.

    2. Do not know that their credit file could contain errors and that they are responsible for ensuring their credit file accurate.

    3. Are not finding out they have credit listings in many cases until they apply for major credit and are refused.

    4. Are suffering mistakes with their credit listings which they have very little knowledge of how to rectify – this can go from a disputed bill, right through to blatant mistakes such as wrong names and wrong addresses.

    5. Do not know that if they pay a bill late in the very near future, that this could impact their ability to obtain.

    6. Have had very little explanation from the Government on precisely how correcting credit file mistakes will be made easier with the new credit laws

    We wait in hope that many of the current issues will be rectified following the introduction of these new credit laws. In the meantime, we will continue to try to educate consumers on how to navigate Australia’s credit reporting laws, and continue to insist on credit reporting accuracy by contesting disputable credit listings on behalf of our clients though our business of credit repair.

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

    Image: renjith krishnan/ www.FreeDigitalPhotos.net