MyCRA Specialist Credit Repair Lawyers

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  • Smartphone users still not smartening up about cyber security

    MyCRA is a partner in Cyber Security Awareness Week 2012 running 12-15 June. The issue of smartphone security was put forward as a growing area of concern amongst information security experts. We look at the dangers of lax smartphone security – since reports show about 4000 smartphones are lost or stolen in Australia every week.

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

    Yesterday Inside Retail published research from PayPal Australia showing that smartphone users did not afford the same type of security for their smartphones that they may afford for their home computers. The article, titled Security fears over m-commerce reveals some worrying statistic on smartphone security, considering the increasing use of smartphones to perform functions normally reserved for personal computers.

    PayPal Australia’s research shows:

    One in six (16 per cent) of Australian smartphone users have lost, misplaced or had their phone stolen in the last year

    BUT only 30 per cent remotely wiped their data after losing their smartphone and less than half (43 per cent) changed their online passwords.

    AND half (49 per cent) of Australian smartphone users don’t use a passcode on their mobile device.

    Here is an excerpt from that article:

    In support of National Cyber Security Awareness Week (NCSAW), PayPal and the Centre for Internet Safety at the University of Canberra (CIS) have called for Australians to stay vigilant with their smartphones as they would their personal computers and wallets. Australians increasingly use smartphones to store a substantial amount of personal data, from bank statements to calendars to social networking profiles….

    Prashanth Ranganathan, director of mobile security and risk at PayPal is in Sydney this week in support of NCSAW, speaking to industry stakeholders about the need for consumer education as mobile payments becomes increasingly prevalent.

    “Australia is among one of the largest mobile markets in terms of smartphone penetration[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”][3]. Australian consumers are increasingly using their smartphones to shop and pay while on the go but are unaware of the size of the digital footprint stored in their smartphones. By transacting through PayPal, consumers are provisioned with an additional layer of protection by ensuring their personal financial information is never stored on the physical device and never shared with businesses they are transacting with,” Ranganathan said.

    Australians are keen to take advantage of the mobile convenience of smartphone technology, but according to PayPal’s research are not protecting themselves beyond the home. Smartphone owners were three times more likely to be more mindful of the security of their wallets than of their smartphones and one in three (36 per cent) stay logged into mobile applications.

    Alastair MacGibbon, director at CIS said: “With over 12 million Australian smartphone users expected in 2012, criminals are now making moves to target mobile users. Australians must stay alert and ensure they protect themselves across all their devices. As the technology evolves and more Australians use their smartphone devices to fulfill a wider range of functions, consumers need to keep an eye out for fraudulent encounters and be educated about ways to safeguard their smartphones from cybercrime.”…

    PayPal and CIS have listed key tips to help consumers better protect themselves while transacting on their smartphones:

    • Set up your first line of defense – Enable a unique passcode so that your smartphone automatically locks when you’re not using it.
    • Know who you’re transacting with – Use reputable mobile sites and applications. Look out for trust cues like the padlock symbol before entering your financial information.
    • Watch out for duplicate applications – Cyber criminals take advantage of trusted brands by creating free applications that mimic the company’s official application. If you’re unsure, always download the application directly from the company’s website.
    • Know how you’re connected – Use a secure network to transact online and watch out for people looking over your shoulder while using free Wi-Fi networks.
    • Keep track of what you’re sharing – Be aware of the permissions your applications request from you. Review permission requests carefully and only share information that you are comfortable sharing.
    • Don’t store sensitive data on your device – never store sensitive financial data on your smartphone.
    If your smartphone is lost, stolen or misplaced, remember to:
    •Remotely wipe your data – Enable this feature at purchase so that you can use it to your benefit if you lose your device.
    • Immediately change your passwords – Change your online passwords for the mobile apps and websites that you automatically sign into, such as email, calendars, social networking sites, app stores, messengers, video sites.
    • Get help – Contact your provider or manufacturer and enquire about mobile tracking or whether they can disable your phone on your behalf.

    The rise in the use of smartphones, and mobile digital devices in general points to a need for users to be more cautious about the security of those devices, and aware of the potential for identity theft should they fall into the wrong hands.

    Smartphones, tablets and laptops give people their lives at the touch of a button – allowing access to email, bank accounts and social networking, but he says this access would be a goldmine for fraudsters.

    Research put out by AVG Security last year shows the number of mobile phones reported lost or stolen in Australia has doubled in the past five years to 200,000 annually — that’s 4000 a week, or one every three minutes.

    If people have their laptop or I-phone stolen, these days it can be the same as someone breaking into their home or stealing their PC. If the device is not secure, often there is enough information on there for a criminal to go about hacking into their bank accounts, or stealing someone’s identity and taking credit out in their name.

    Identity theft can hit twice, often with victims facing an uphill battle with their credit rating following it. Many times the identity theft victim is unaware their good name has been used until they apply for credit somewhere and are flatly refused. People may have credit applications as a minimum and possibly defaults, mortgages and mobile phones attributed to them incorrectly.

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

    What is not widely known is how difficult recovery from identity theft can be, due to defaults remaining on credit files for 5 years. Unfortunately there is no guarantee they can be removed from a person’s credit file. The onus is on the identity theft victim to prove their case to creditors.

    Security companies like AVG also have software such as ‘AVG Mobilisation’, which can help users track and locate a lost or stolen smartphone or tablet on Google Maps. They can also enable remote locking, and remote wiping allowing personal information to be removed if the device is lost or stolen. There are similar products with other security companies.

    People who suspect identity theft should report the matter immediately to Police, no matter how insignificant they think the fraud is.

    This crime is not very widely reported. But it is only through people reporting identity theft that any real statistics get collated on this issue. Likewise, if people want to try and repair their credit rating, the first thing I tell them is to make sure they have a Police report.

    For more information on identity theft risks and how people can repair their credit rating following identity theft, visit the MyCRA Credit Rating Repairs website www.mycra.com.au.

    Image above: Ambro/ www.FreeDigitalPhotos.net

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  • Cyber security is about protecting your credit rating.

    MyCRA is proud to be a partner for Cyber Security Awareness Week 2012, running this week from 12 to 15 June.  Awareness Week helps Australians understand cyber security risks as well as educating home and small business users on the simple steps they can take to protect their personal and financial information online. Today, we address the importance of cyber security for preventing bad credit history.

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

    Cyber Security Awareness Week 2012 is an Australian Government initiative, held annually in partnership with industry, community and consumer groups and state and territory governments. According to the Stay Smart Online website, cybersecurity awareness is more important than ever.

    “Australians are increasingly relying on the internet in their everyday lives for banking, shopping, education and communication. It is, therefore, important that they are able to use the internet in a secure and confident manner. The government has established a range of initiatives to raise the awareness of Australian internet users about the importance of cybersecurity and the simple steps they can take to protect their personal and financial information online.”

    One of the big risks for Australians is that their internet use will lead to fraudsters stealing their personal information for purposes of identity theft (now the fastest growing crime in Australia) and potentially fraud. The good credit rating of the victim could then be damaged.

    If cyber-crooks are able to get their hands on enough personal information they may be able to construct a fake identity, which can lead to some serious credit fraud. Fraudsters have been known to go so far as to take out personal loans, credit cards and even mortgage homes in their victim’s name.

    When the identity theft goes so far as to affect the credit file of the victim, the issues can be huge. Unfortunately fraudsters are never so kind as to pay this credit back, so the victim is often unaware of a stream of defaults run up against their name, until the apply for credit in their own right and are flat out refused.

    For between 5 and 7 years identity theft victims can be locked out of credit while their credit rating shows up someone else’s defaults.

    Unfortunately in the past it has not been easy for identity theft victims to prove they did not initiate the credit, particularly if they have no idea how they were duped in the first place.  Often this sophisticated type of fraud is instigated by overseas crime syndicates who don’t leave much of a trail, or even if they do, can’t be prosecuted easily.

    But the ability to obtain credit is so crucial to functioning well in today’s society, that if the identity theft victim has also been a victim of credit fraud, they should make their clear credit rating a point worth fighting for.

    Firstly, the victim should contact Police as soon as they are made aware of possible identity theft, they may even be able to prevent the credit fraud occurring. If it has already happened, a Police investigation and report will be a good starting point for proving the person did not initiate the credit in the first place.

    Credit file repair can be difficult for the individual, but if there is an error on a person’s credit file it is worth pursuing. It can be made easier with the help of a credit repairer. A credit repairer has extensive knowledge of credit reporting legislation and how to apply the letter of the law to the credit file holder’s circumstances to ensure the best chance of having the listing or listings completely removed from the credit file if it has been placed unlawfully, for instance if the listing contains an error, is unjust or just shouldn’t be there.

    The best thing people can do for themselves is to prevent that crime from happening in the first place. People can provide a safety buffer for themselves and their family around one of the main channels for fraudsters to enter our lives – the internet.

    To start, people can follow these top tips provided by Cyber Security Awareness Week 2012 on how to stay safe online:

    • Install and update your security software; set it to scan regularly.
    • Turn on automatic updates on all your software, particularly your operating system and applications.
    • Use strong passwords and different passwords for different uses.
    • Stop and think before you click on links and attachments.
    • Take care when transacting online – research the supplier and use a safe payment method.
    • Only download “apps” from reputable publishers and read all permission requests.
    • Regularly check your privacy settings on social networking sites.
    • Stop and think before you post any photos or financial information online.
    • Talk with your child about staying safe online, including on their smartphone or mobile device.
    • Report or talk to someone if you feel uncomfortable or threatened online – download the Government’s Cybersafety  Help Button.

    In addition, people can and should subscribe to the email notifications from Stay Smart Online Alert Service. The Stay Smart Online Alert Service is a free subscription based service that provides home users and small to medium enterprises with information on the latest computer network threats and vulnerabilities in simple, non-technical, easy to understand language. It also provides solutions to help manage these risks.

    Also, people can look at securing different sections of their internet use in more depth with the help of Stay Smart Online’s key factsheets for online security.

    They can also help raise awareness of the issue amongst their own group of family and friends and insist that anyone who has their personal information has a responsibility to keep it safe.

    People should also check their credit file regularly, and act quickly on any discrepancies there – which can often be the first sign of identity theft. Copies of consumer and business credit files can be ordered from one or more of Australia’s credit reporting agencies, and are free for the credit file holder once per year.

    Stay tuned for more information updates as Cyber Security Awareness Week unfolds.

    Image above: Victor Habbick: www.FreeDigitalPhotos.net.

     

     

     

  • More Aussies struggling with less people candidates for mainstream credit

    A recent survey shows the number of Aussies struggling to meet their credit commitments is increasing. Will late payment notations to be included on credit files as part of the new credit laws prevent this figure from continuing to increase in the future?

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

    Results from Veda Advantage’s bi-annual Australian debt study late last month showed more and more Australians are at risk of falling into a debt spiral during an economic downturn.

    Findings show that 21% of Australians are struggling to pay their current credit commitments. Despite this, a quarter also admitted they will apply for yet more credit to help them cope with an economic downturn.

    Veda’s analysis of consumer behaviours if there is a period of economic stress shows:

    • Most (66%) Australians would draw on household savings;
    • One in four (25%) would increase their credit card limit, mortgage or loan;
    • One in three, or almost 5.5 million, would borrow from family;
    • Over 3.6 million (21%) would draw on their superannuation.

    Veda claims the introduction of late payment notations to credit files as part of comprehensive credit reporting should prevent more people from falling into a debt spiral.

    Veda’s Matthew Strassburg says “…the changes to credit reporting will make credit reports fairer and more accurate for consumers looking to borrow. The new information will include a person’s current credit limit, number of credit cards and if someone has failed to make the minimum payment on a credit card or loan on time.”

    I agree, accuracy in credit reporting in Australia is paramount. Late payment notations would certainly see less people given access to mainstream credit. But the question is – how fair will this system be?

    25% of people surveyed by Veda said they would increase their credit card limit, mortgage or loan if they fell into ‘economic stress.’ But Veda fails to mention the definition of ‘economic stress.’ Possibly if the stress was certain to be temporary – some people would nominate increasing their credit limit or redrawing on their mortgage as a possible short term solution to ride out the bad period. It is not certain from the results published how many people surveyed would actually choose more credit – especially new loans as a solution to a long term financial problem.

    If some of those 25% who nominated ‘more credit’ as a solution intended to use credit for an extended period of economic stress, then certainly the introduction of late payments as part of comprehensive credit reporting would stop some in their tracks from gaining more credit – and rightly so, there are better solutions to debt stress than more debt.

    But what if the issue is a temporary one? How can mainstream lenders truly tell if someone is a bad credit risk if they have been late making one payment? At least with a default recorded – it shows the credit file holder had been at least 60 days in arrears with their repayments.

    There are so many grey areas with the introduction of these new laws, and I am nervous that more consumers than necessary could suffer a reduction in access to mainstream credit. Could more be forced to access the non-conforming market at high interest rates as an alternative? Doesn’t this further perpetuate the debt cycle and lead even more people to experience financial stress?

    One important point the Veda survey highlighted was the lack of impetus to seek help if people did fall under economic stress. It is important that people know that they can seek help if they are falling into difficulty making repayments – or they feel they may in the future.

    Veda’s analysis indicates that despite 21% of the population saying they are having difficulty coping or are unsure how they will make the next payment, only one in five had sought professional financial counselling.

    Mr Strassberg added: “People having trouble repaying should seek help from a financial professional before it’s too late, particularly lower income earners with competing debt repayments.”

    Certainly financial counselling, possibly seeking a financial hardship variation, and generally contacting a creditor prior to letting a repayment fall into arrears or into default is always the better option to avoid debt stress and bad credit history.

    If you or someone you know has bad credit history which shouldn’t be there – contacting a professional credit rating repairer can help you get your life back on track and potentially remove credit rating errors permanently.

    Image: Stuart Miles FreeDigitalPhotos.net

  • Mortgage stress eased by RBA cuts to interest rates…if passed on

    The Reserve Bank of Australia has cut the cash rate by 25bps today – which should ease mortgage stress and the rate of credit rating defaults, provided banks pass on the reduction.

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

    Today Australian Broker reported the cut in its story RBA maintains cutting course and says weak retail figures and low inflation has contributed to the cut.

    “It is a relief to see that the RBA finally seems to have grasped the severity of the situation facing our main employment industries like construction and retail,” 1300 Home Loans’ John Kolenda said.

    While Kolenda conceded that the rate cut would not be a panacaea for consumer sentiment, he said it would provide a much-needed boost.

    “This rate cut is not the end of the road by any means but it does mean that homebuyers and consumers will be a little less cash-strapped and might step back a bit from their siege mentality,” he said.

    It seems from experts we can determine that all but those related to mining and other resource sectors are struggling or slowing, so a drop in interest rates will be welcome, particularly for those teetering on the realm of defaults. A cut like this can represent a significant saving for consumers, provided that banks mirror the RBA cut, which in the recent past has not readily been the case.

    Unfortunately, for those living with bad credit history, these cuts will be negligible and they will still be paying a significant amount more in interest through the non-conforming sector.

    So any actions to prevent the number of likely defaults is extremely heartening if mirrored in interest rate cuts by banks.

    Image: jscreationzs/ www.FreeDigitalPhotos.net

  • Default rates soar amongst over 65’s

    A study on generational trends in credit activity over the past ten years put out by credit reporting agency Veda Advantage reveals that the rate of default amongst the older generation (65 years and above) has increased a staggering 200% over the past ten years. We look at why this could be occurring and the possible ramifications of bad credit history for this age group.

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

    Veda’s study results, released on June 1 in a report titled: New data from Veda shows surprising differences in credit activity between generations reveals this age group have become more reliant on credit which has led to the increased level of defaults as some struggle to meet financial obligations.

    This topic was explored further by the Herald Sun in its article Bad debt increases among over-65s. It reports Veda general manager of consumer risk Angus Luffman saying 6 per cent of over-65s had more debt this year than last year. He said most debts related to living costs such as utility and telecommunications accounts.

    Here is an excerpt from that story:

    Financial counsellors said yesterday people could find it difficult to reduce their spending when they reached retirement and the supply of easy credit was a major problem.

    “After retirement, some people find that their incomes have decreased but their credit card limits can be quite high,” Financial Counselling Australia chief executive Fiona Guthrie said.

    “The adjustment can be hard (and) many older Australian are simply poor.

    “They may be using credit to simply make ends meet.

    “It is also frustrating to hear that industry still tries to sheet the blame home to consumers for what in fact has been the irresponsible marketing.”

    It is a worrying trend that older Australians are having to rely on credit to simply make ends meet. The reasons for the increase in the rate of defaults could be simply these age groups not having the necessary funds to meet their repayments, or as speculated by Angus Luffman, it could also be due to a lack of education around credit.

    In Veda’s report, Mr Luffman said that education is needed within all age groups on the risks of being enticed into credit as a result of factors like low introductory interest rates.

    “The fact is that consumers of all ages still fail to realise that missed monthly mobile phone, utilities, and credit card or loan repayments can all affect their credit rating.   It is vitally important that consumers consider and understand the difficulties they could face when they take on credit commitments that they can’t meet,” said Luffman.

    We assume that the over 65’s have it all worked out financially. This report debunks that and shows that bad credit history can occur at any age group, and can be as much a result of a lack of education about credit obligations as it can be about not having the necessary funds to meet those obligations.

    I always maintain that there is a lack of education about consumer rights and responsibilities around accessing and repaying credit and likewise in addressing credit listing complaints. Credit reporting law is hugely legislated and Privacy Principles cross a number of different codes of conduct for different industries. The difficulty for ordinary consumers in understanding these laws is reflected in a) the number of consumer defaults and b) the volume of consumers seeking credit rating repair services to fix their bad credit.

    More education would go a long way in preventing the rate of default in the first place. It would also allow consumers to understand their rights within credit reporting law. Many are unsure what to do if they find themselves with a credit listing which they believe should not be there, and when they try to address the issue with the Creditor, they can be left no better off.

    Perhaps older Australians are the most uneducated generation on their rights and responsibilities around credit. This generation is traditionally the ‘saving’ generation – most would have used very little credit in their younger years and the trend towards credit in society today has possibly pushed them into a realm they may be ill-equipped for. A meagre pension propped up by small levels of Superannuation for this generation can also be a contributing factor.

    Direct debit problems, bill disputes, divorce or separation issues, even identity theft can all lead to an unncecessary bad credit rating and can be a problem for any generation. And what about those grey nomads tripping around Australia – what if people have failed to tie up all loose ends and have left a bill unpaid or unsettled? In reality, an overdue account will lead to bad credit. They could be listed with a Default and have 5 years of bad credit. If the Creditor can’t get hold of them – they will have a Clearout listing against their name – that’s 7 years of bad credit.

    So what can people do if they find this happens to them?

    Consumers should address credit listing complaints straight away. What they shouldn’t do is wait 5 or 7 years if the listing should not be there. The best chance of getting that bad credit history removed is for people to contact a credit rating repairer and put their circumstances to them, so it can be established whether they are a suitable candidate. There are some cases of bad credit which cannot be removed. But if there are inconsistencies, there is a good chance that a credit repairer can help them with their case for removal of the credit listing.

    And for older generations who want or need to use credit, there is no time to waste on bad credit history that shouldn’t be there.

    Image: www.FreeDigitalPhotos.net

     

  • A wait and see approach to logistics of new credit laws

    Most people are very positive about changes to Australia’s Privacy Laws which are coming through Parliament, effectively bringing Australia out of the 1980’s and closer to other countries in our treatment of Privacy and personal information. But others are a little unsure they go far enough in many areas. We look at one opinion of how the new credit laws apply to credit reporting .

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

    An interesting post came through from ‘The Conversation’ yesterday written by Bruce Arnold, Lecturer of Law at University of Canberra. The post Two cheers for privacy law reform? Let’s wait and see looks at the potential benefits of these new Privacy Laws, and where perhaps the laws may be lacking:

    “For many people the bleeding edge of privacy law has been their credit records. The Bill rationalises the current credit reporting regime, which has featured strong disagreement between competing industry bodies and examples of bad practice by particular enterprises. That rationalisation is to be strongly welcomed by consumers and business as providing greater transparency and certainty. Its success however will be dependent on action by the national Privacy Commissioner, an entity within the national Office of the Information Commissioner. Under the proposed law, credit providers will have access to additional personal information with the expectation that more data will facilitate “a more robust assessment” of credit risk and “responsible lending” that may also “result in reductions to the cost of credit for individuals”. As with much finance, we will trust that lenders will pass on their savings to consumers.

    The Bill aims to give the Commissioner greater powers, for example scope for “own motion” investigations rather than in response to complaints by individuals who claim that there privacy has been disrespected. It is unclear whether the Commissioner will make effective use of those powers, given difficulties with resourcing and perceptions – fair or otherwise – that the office lacks both the will and expertise to take on particular interests. Historically it has endorsed industry practice that although commonplace, is below overseas benchmarks and is less than desired by many Australians.

    The Commissioner will be able to recognise external dispute resolution mechanisms, something that is consistent with the trend to outsourcing and administration and presumably welcomed by business.

    The Bill does not provide for a tort of serious invasion of privacy – that is, scope for an individual to seek compensation over an invasion of their privacy by an individual or an organisation. That tort has been recommended by the ALRC and by the law reform commissions of New South Wales and Victoria. It is thus hardly a radical or alarming notion, although it has been strongly opposed by the major media groups and some legal practitioners. The Government’s willingness to proceed with suggestions for establishment of the tort as we head towards an election is unclear.

    Enactment of the Australian Privacy Principles is a step forward, deserving of two cheers even if we ask why has it taken so long and wonder how the APP will be interpreted by the Privacy Commissioner. Rationalisation of credit reporting law, in conjunction with the National Consumer Credit Protection Act 2009 (NCCPA) is also meritorious, although in one of the most messy areas of privacy practice we will need to see how business implements the revised arrangements and whether there is meaningful enforcement by the Privacy Commissioner,” Mr Arnold says.

    It will be interesting to see how the actual application of dispute resolution pans out in the credit reporting landscape including how the changes will alter the Credit Reporting Code of Conduct. We will certainly adopt the ‘wait and see’ approach as to whether the changes will indeed make it ‘easier’ to dispute credit listings and fix unnecessary bad credit as claimed by Attorney-General Nicola Roxon.

    Image: Stuart Miles/ Free Digital Photos.net

     

  • Report shows more Australians are forced into accessing fringe credit

    If anyone thought having bad credit meant people were merely unable to purchase big ticket items such as a home or a business – they are sorely mistaken. As our credit repair clients would surely testify, bad credit history permeates through every area of a person’s life, to the point where they can’t even get a mobile phone on a plan. These people, through denial of mainstream credit are forced to seek alternative credit often at higher interest rates – perpetuating the debt cycle even further. This has parallels with a recent study which reports that the high cost of access to basic financial services particularly in remote areas are forcing more and more towards fringe credit as well.

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

    An article published in the Sydney Morning Herald today, titled More of us lacking access to banks revealed the study results – more than 2.9 million adults do not have adequate access to day-to-day financial products such as a basic banking account, car insurance or even a credit card.

    Here is an excerpt from the same story featured in WA Today, Titled More Australians can’t access money: report :

    The research by the Centre for Social Impact – backed by the University of Western Australia – shows the ability to secure as much as $3000 in funds for an emergency through the mainstream financial system is becoming increasingly out-of-reach for Australians.

    Instead, more people are relying on family or friends or turning to fringe credit products, such as payday lenders, who regularly charge substantially higher interest rates than banks.

    Such products have seen a surge in uptake in recent years….

    NAB chief executive Cameron Clyne accepted the banking industry was partly to blame, conceding it needed to lift its game by providing affordable products to more people.

    ”The absence of access to mainstream financial services does preclude people from advancing socially and economically,” he said.

    ”Often it’s the unexpected expenses [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”][such as] if the car breaks down or someone needs to get to a job interview.
    “There’s an obligation for the banking system to improve financial inclusion.”

    Financial inclusion is a big issue. Many people need a fair go – and the chance to borrow small amounts of money at reasonable rates which they might have a chance at paying back, allowing them to actually move forward in life.

    Parallels for bad credit clients

    In our race to ensure we are not throwing money at people when they already can’t handle the credit they have – we have adopted a policy of excluding people who present with bad credit from mainstream lenders. This is responsible lending, but where do those people turn to in emergency situations? The very same places the people surveyed in the WA report do – family, friends or fringe credit.

    It seems a shame to throw people who are already struggling with debt into a ‘debt trap’ of borrowing from pay-day lenders and the like.

    One terrific favour we can do for people we meet who are ‘on the fringe’, struggling with bad credit, is point them in the direction of financial counselling – so that when they are turned away from mainstream credit, they can be given something positive to pull them out of the ‘debt trap’ and deliver them back on the road to financial security.

    And of course, if there is any doubt about whether they should have the bad credit in the first place – then referring them for assessment for credit repair would be the ultimate gift. If they are able to remove the negative history from their credit file which shouldn’t be there, then they have the best chance at a fresh start with credit, and a normal life.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • Credit reporting changes introduced into Parliament

    Further to news on changes to Australia’s Privacy Laws, the Attorney-General Nicola Roxon announced that much awaited changes to the Privacy Act 1988 were introduced into Parliament yesterday. These changes will affect your credit file and how your good and bad credit history is shown.

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

    The Attorney-General said The Privacy Amendment (Enhancing Privacy Protection) Bill 2012 represents the most significant developments in privacy reform since Labor introduced the Privacy Act in 1988.

    All of these changes have significant bearing on credit reporting accuracy in Australia, as an individual’s credit file contains so much personal information which is checked to assess risk when an individual applies for credit. It can also be subject to misuse and error.

    The laws are promised to strengthen the power of the consumer over this important Privacy right.

    “These new privacy laws focus on giving power back to consumers over how organisations use their personal information,” the Attorney-General said in a statement to the media yesterday.

    This statement also addressed credit reporting specifically.

    The Government has promised to ‘modernise’ credit reporting arrangements. The Attorney-General was more specific with some of the changes coming in with the introduction of comprehensive credit reporting as part of these Privacy Act 1988 reforms:

    • making a clear obligation on organisations to substantiate, or show their evidence to justify, disputed credit listings
    • making it easier for individuals to access and correct their credit reporting information
    • prohibiting the collection of credit reporting information about children
    • simplifying the complaints process by removing requirement to complain to the organisation first, complaints can be made directly to the Privacy Commissioner, and by introducing alternative dispute resolution to more efficiently deal with complaints.

    The Government says it expects the credit industry will benefit because the reforms provide a more accurate picture of an individual’s credit situation to help them make a robust assessment of credit risk, which is expected to lead to lower credit default rates.

    Namely, this refers to the controversial introduction of late payment notations on consumer credit files. Late payments will be added by licenced creditors even if a bill is one day late. The notation remains on the individual’s credit file for 2 years. It is unclear at this stage the exact process of law governing how late payments may be added to credit files, nor the precise way these late payments will be used when assessing risk and the potential impact on an individual’s ability to obtain credit.

    I can’t help expecting some real confusion over this type of data to occur particularly in the early days whilst data has been collected without individuals knowing the potential impact on their credit file information, and generally arguments and confusion from consumers over what may constitute a bad credit risk after these laws are introduced.

    Australian Broker published an article Credit Agencies rejoice as positive regime gets a kickstart, today in which Dun & Bradstreet’s Director of Consumer Services, Steve Brown said comprehensive credit reporting should open up credit for some groups of people.

    “The use of comprehensive rather than just negative credit information provides greater visibility of under-served consumers who would otherwise find it difficult to access credit,” Mr Brown said.

    This assumption would be due to people being able to now ‘counteract’ a late payment notation or potentially a default listing through their repayment performance history. This could mean that if people have a 5 or even 7 year listing on their credit file, they may be able to show that over a period of 2 years (the length of repayment performance history recorded) they have managed to pay their bills on time. It would then be up to the lender to assess whether they believe a consumer or business with a default who has paid their bills on time for the past 2 years is or isn’t a credit risk.

    Whilst in theory this works, I am concerned this is very subjective and lenders could err on the side of caution especially initially.

    At the moment I believe ‘repayment performance history’ only adds to the volume of negative data which will be visible on consumer credit files. I will be interested to see if in the coming years and months the advantage to this system does in fact materialise in the form of consumers with defaults being given a fairer go due to better repayment history before I am truly convinced.

    Some significant submissions put forward to the Senate Finance and Public Administration Legislation Committee which were accepted by the Government and which should benefit consumers include:

    • Streamlining the correction and complaints process for credit reporting
    • During a correction complaint, the Creditor must give justification for credit listings and actually substantiate the information is reports on credit files.
    • Consumers may complain directly to the appropriate Ombudsman rather than having to go through the organisation’s complaints process first.
    • The provision for remedies such as compensation for consumers who are negatively impacted by a Creditor who has failed to comply with credit reporting law.

    MyCRA will be very intent on seeing how the laws pan out for the actual application of these significant changes for consumers and their credit file information.

    If people have bad credit history which they believe shouldn’t be there, or the data on their credit file is inconsistent – they can contact a professional credit rating repairer to get advice about formulating a credit listing complaint. Call MyCRA Credit Rating Repairs on 1300 667 218 or visit our website www.mycra.com.au.

  • Financial worries could loom over economy: Consumer Advocate for credit reporting accuracy

    On the whole it seems Australians are feeling insecure about their finances. Is this the catalyst for or as a result of the slow housing and finance market? Is the doom and gloom all in our minds or are Australians in real trouble which could lead to a debt crisis and the accumulation of bad credit history by some sectors of the population?

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

    Yesterday Business Day reported on a worldwide survey showing Australian consumer confidence was significantly reduced despite the strength in the Australian economy in comparison to other countries.

    The article, titled We’re Saving For a Gloomy Day addresses Australia’s growing pessimism as featured in a survey brought out by Boston Consulting Group. The survey suggests the savings habits of Australians born in the midst of the global financial crisis are here to stay.

    “In its 11th annual consumer sentiment survey conducted last month with 15,000 consumers in 16 countries, BCG asked respondents a series of questions around financial and job security, spending plans and savings habits. The results showed Australian shoppers were among the most worried and financially insecure in the developed world, and planned further cuts in discretionary spending,” the article says.

    This sentiment is not surprising, considering the key finding from the survey shows that not only are Australians cautions, but that the rates of consumers who feel they are in financial trouble has soared:

    “47 per cent of Australian consumers felt they were in financial trouble or not financially secure, up from 36 per cent in 2011. This heightened sense of panic compares with 48 per cent in the US (where the unemployment rate is double Australia’s), 43 per cent across the European Union, 41 per cent in Spain (unemployment close to 25 per cent) and 45 per cent in recessionary UK,” the article says.

    Here are the results from the survey country by country courtesy of Business Day:

    So what is causing this fear? Perhaps the drop in house prices (on average 4.5% over the past 12 months according to the Australian Bureau of Statistics) could be having a significant impact. Perhaps a reduction in the level of household equity has meant many are reluctant to increase spending as there is no longer a buffer in their biggest asset – the family home.

    This was the viewpoint of the leader of BCG’s consumer practice in Australian and New Zealand, James Goth.

    Mr Goth said a downturn in the housing market was affecting spending plans in Australia and feeding the pessimistic outlook.

    ”Another reason why I think we are so bearish in our discretionary spending outlook, regardless of how well the economy is doing and how good unemployment rates are, is the breaking of the house-price cycle – people can no longer fund these very high expenditure rates based on ever-increasing house prices, he told Business Day.”

    So what could be the long term prospects for the housing market and lending finance numbers?

    This week’s March housing finance statistics reported by the Australian Bureau of Statistics show a 0.3% rise in home loans to owner occupiers, but the proportion of first home buyers fell to 16.4 per cent. In all, the total value of dwelling finance commitments fell 0.5 per cent in March compared with February in seasonally adjusted terms.

    ABS HOUSING FINANCE March Key Points:
    VALUE OF DWELLING COMMITMENTS

    March 2012 compared with February 2012:

     The trend estimate for the total value of dwelling finance commitments excluding alterations and additions fell 0.2%. Owner occupied housing commitments fell 0.5%, while investment housing commitments rose 0.4%.
     In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 0.5%.
    NUMBER OF DWELLING COMMITMENTS

    March 2012 compared with February 2012:

     In trend terms, the number of commitments for owner occupied housing finance fell 0.4%.
     In trend terms, the number of commitments for the purchase of new dwellings fell 1.3% and the number of commitments for the purchase of established dwellings fell 0.6%, while the number of commitments for the construction of dwellings rose 1.1%.
     In seasonally adjusted terms, the number of commitments for owner occupied housing finance rose 0.3%.
     In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 16.4% in March 2012 from 17.2% in February 2012.

    The minutes of the Reserve Bank of Australia May board meeting were released on Tuesday and noted that weakness in non-mining sectors was persistent and was predicted to continue.

    The Sydney Morning Herald reported in its article Slowing Growth, rate rises tipped RBA’s hand that among other economic factors, slowing credit growth and demand for housing finance were involved in its decision to cut interest rates this month.

    “Demand for housing finance had eased in the past few months and recent data suggested that dwelling prices had continued to decline, although there were tentative signs that the pace of decline had been more gradual in recent months,” the RBA minutes said as reported in SMH.

    “Credit growth for households had been marginally lower over the past year than over the previous year, and business credit was rising only at a very modest rate,” the minutes said.

    Do the facts show Australians are really experiencing financial difficulty?

    The sentiment was echoed by Dun and Bradstreet’s Credit Expectations Survey released on April 30, 2012. It pinpointed in its survey of June quarter savings, credit usage, spending and debt performance expectations that many who can meet credit commitments are choosing not to, but that there is a significant portion of people struggling with their current debt levels.

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

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

    “Unfortunately, we are seeing the least-solvent consumers accumulating unmanageable levels of debt, while those best able to meet credit commitments are avoiding spending altogether,” Mr Jones said.

    “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.

    Should this cycle continue, and a portion of people continue to accumulate unmanageable debt levels, the result will be a possible increase in the number of credit file defaults – with the only saving being – well – savings.

    The level of savings reported in the country is heartening – we have learnt from other countries post GFC, and the smart savings of many, whilst it may hurt the retail sector – would buffer many families from a credit debt crisis like we have seen in countries like the United States. But as often happens, for those with a high proportion of debt who don’t have the luxury of saving – they may be thrown into the debt cycle– robbing Peter to pay Paul just to stay afloat.

    For those who accumulate a bad credit history, the prospect of recovery would be slow. For between 5 and 7 years they will be refused mainstream credit and be on the outer – any credit they are approved for would generally be at a higher interest rate, meaning they are going to struggle even further to pay back their debts. The consequence of possible defaults on new loans could mean they are trapped in this cycle for a very long time.

    In this sense, for those who are living with credit file defaults which they believe shouldn’t be there, it would save them thousands by addressing the problem and having those credit rating errors addressed and potentially removed. As a safeguard for the future should lending criteria tighten even further, any inconsistencies on a person’s credit report should be addressed now – before it is urgent. People can contact a credit rating repairer to help with building a case to have those credit listings placed in error on their credit file removed – as their right and responsibility.

    Image: renjith krishnan/ FreeDigitalPhotos.net

  • How To Save On Your Home Loan and Prevent Mortgage Stress

    A drop in house prices across many parts of the country could see some families owing more than their homes are worth.  Luckily interest rate cuts may offset this change and give people the chance to make some headway on their home loan despite the reduced equity. So what are some real and significant things families can do to actively reduce their home loan and prevent mortgage stress or at worst – bad credit from late payments?

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

    The Australian Bureau of Statistics reported earlier this month that house prices around Australia have fallen by an average of 4.5 per cent over the past 12 months.

    For people who have recently purchased their first home, this could amount to some negative equity – which is quite a frightening prospect for many. For those about to purchase their first home – it could put them off buying all together. But this may not need to be the case. Certainly many buyers in this market should be fairly cautious with where they buy – but it just may be a case of ensuring they look at their purchase as a long term investment – structuring their loan accordingly if possible and allowing for places where they can make extra payments to their loan.

    The Sydney Morning Herald recently ran an article titled Extra payments a winner showing how the recent interest rate cut can actually make a significant difference for home owners if they continue to make mortgage repayments at the previous level.

    “The 50-basis-point cut represents a $96 a month reduction in mortgage payments for home buyers with an average-size loan of $300,000 (assuming the full cut is passed on).

    But for people who can afford to maintain their payments at their current higher level it presents a great opportunity to make inroads into their outstanding principal and build a buffer for tougher times.

    Given the uncertainty in markets, and the economy, it is a good strategy to build greater equity in the home,” the article says.

    They recommend visiting ASIC’s Money Smart website to calculate the potential interest saved on extra payments to their home loan: www.moneysmart.gov.au/tools-and-resources/check-asic-lists .

    The article included this significant advice for borrowers:

    A home borrower’s handbook to keep you out of trouble

    ❏ Know what you can afford. Don’t rely on the lender to tell you what you can borrow. Make your own assessment by writing a household budget with all outgoings and see if there is enough to cover the mortgage repayment. According to Veda Advantage and Fujitsu Consulting mortgage stress reports, the groups that most often get into trouble with repayments are low-income families and young families.

    ❏ Don’t just look at the rate. According to QBE LMI’s 2012 Australian mortgage market study, when people are looking for a loan they place most emphasis on the interest rate and the fees. Options such as redraw, offset and the ability to split the loan between fixed and variable rates are given a low priority.

    ❏ Stress-test your loan. Lenders will check to see if you can continue to make payments if rates go up 2 percentage points. What if rates go up 3 percentage points or more?

    ❏ Watch your credit-card spending. Surveys of people experiencing hardship with home-loan repayments show that large credit-card debts can be the trigger for arrears or defaults.

    ❏ Make extra repayments. According to ING Direct’s Financial Wellbeing Index, 40 per cent of mortgage holders are making extra repayments on their home loans. These payments serve two purposes: they create a buffer that can be called upon if circumstances require; and they speed up the repayment of the loan.

    ❏ Invest in your mortgage. A lump-sum payment that reduces the loan principal is, in effect, an investment with a return equivalent to the mortgage interest rate, free of tax.

    ❏ Deal with problems early. The Legal Aid Mortgage Stress Handbook recommends that borrowers seek advice early from their financial institution or a financial counsellor. Many people leave it too late.

    Unfortunately, for those home owners who have entered into a higher interest rate with a non-conforming loan, the interest rate cuts will be negligible for them. They can be up for tens of thousands of dollars more during the first three years of the loan. Our calculations show on a home loan of $400,000 they could be charged an extra $22,867.15 more in home loan repayments over the first three years of the loan. This is based on average loan of $400,000 over 30 years on non-conforming loan interest rate of 9.5% versus the standard variable rate of 7%.

    To calculate potential savings people can visit the MyCRA Calculator.

    For people considering a non-conforming loan due to bad credit that should not be there, it would be extremely beneficial for them to instead look at disputing the credit listing and having their credit rating repaired. If they were successful in having listings removed from their credit report which either should not be there or were put there in error, they could restore their good credit rating in this instance and apply for a standard home loan – potentially saving themselves thousands.

    But instead it is often the case that people get a negative credit listing after a dispute with a creditor or worse – surprise bad credit – and are under the impression they have to put up with the hand they are dealt with. Some contact their creditor, and are told that they can have the listing marked as paid if the account was paid, but the listing is never removed from their credit file. The ‘paid’ listing is unfortunately still going to be a detriment to their ability to qualify for a home loan and they are stuck with the tag of ‘bad credit’ for between 5 and 7 years depending on what’s on their credit file.

    However, if the listing was put there unlawfully or unjustly, then the credit file holder does have the right to have those inconsistencies addressed and potentially removed from their credit file. It takes lots of knowledge of the relevant legislation and some good negotiation ability to be able to formulate a successful case to remove a listing. Which is where credit rating repairers come in – to act on the credit file holder’s behalf and enforce that legislation creditors are bound to comply with, helping to demand accuracy in credit reporting and negotiate for the removal of those listings which shouldn’t be there.

    In this market – it can make all the difference for a potential borrower – and be a fight entirely necessary to make to ensure people get the home loan they deserve.

    For help and advice on credit rating repair, contact MyCRA Credit Rating Repairs on 1300 667 218 or visit our main website www.mycra.com.au.

    Image: chainat/FreeDigitalPhotos.net

  • Liar liar…why honesty is the best policy when obtaining and repairing credit

    We look at the dangers of being less than honest when it comes to finance and how you can lose your good credit rating because of lying on your finance application. We also see how lying can cross over into credit repair – and how a lie will invariably be caught out and ruin your chances of restoring your good name.

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

    Lying to your lender

    One of the most drastic causes for a bank rejecting a loan application is through fraud or through not disclosing all information. So why do so many people still lie on their finance application?

    Perhaps we want to appear to earn more than we actually do, or perhaps we don’t want the lender to know all of our debts?

    But according to RateCity.com.au in its article Why risk it? Don’t fib on your mortgage application, people who lie on their finance application are putting themselves at risk.

    “Typically the amount you are approved for on a home loan is based on the information in your application, so lying about this means you have a higher chance of over-committing yourself and not being able to afford the repayments with the possibility of losing your home. Lying can also impact your credit history which will affect any future applications and loan approvals.

    Being dishonest can make you look bad because if you are lying about one thing they may wonder what else you are lying about. If you are caught out your lender could deny your application and you could lose your chance of buying the home of your dreams, so why risk it?” the article says.

    The article quotes a Veda Advantage study showing 1.6 million Australians have lied about their financial information when applying for a loan, including mortgages.

    “one in 10 Australians admitted to not being truthful in order to obtain a loan. A massive 823,000 borrowers said their total expenses were less than what they actually were and 342,000 said they earned more than they really did,” the article says.

    The introduction of new obligations on brokers and lenders through the National Consumer Credit Protection Act (NCCP) means financial institutions will have access to more of personal financial records so that they are better able to accurately assess the credit risk of each application.

    It is likely that people caught giving false information on their applications will have more chance of being caught, and their future tarnished.

    If you are caught lying, your application is normally completely dismissed. Also, your omission could be viewed as purposeful deception or fraud.

    So honesty really is the best policy.

    If you’re not sure whether you will be approved for finance, rather than lying on your application, it might be a good idea to talk honestly to a broker about your situation prior to making a finance application and prior to creating a ‘credit enquiry’ listing on your credit file. The more good honest information they have, the likelier they may be able to assess your chances of getting over the line prior to the application – they could even run something past a lender for you if there’s something in particular you are unsure about.

    Lying to your credit rating repairer

    Likewise, some people are so desperate for credit they even lie to their credit repairer if they need bad credit history removed. It can be a case of people telling their credit repairer what they think they want to hear rather than the truth. But this is no help to you or to us.

    When addressing credit listing complaints, the truth generally catches up with consumers as well as creditors.

    Credit rating repair is about enforcing legislation to negotiate the removal of credit listings that have been placed unlawfully on your credit file.

    In order for the credit rating repairer to exhaust all avenues for removing an unfair listing, we need the truth, the whole truth and nothing but the truth.

    Creditors generally have extensive records on correspondence with you, as well as the circumstances around the placement of the negative listing on your credit file. If we work on your behalf to apply the letter of the law in the wrong circumstances your request for correction or dispute is most often rejected and you lose your right to have your credit file listing removed – regardless of whether it should have been there or not.

    The best course of action is to be upfront about your circumstances and the credit rating repairer can decide whether based on the truth, you would qualify for credit rating repair. If you do qualify, the credit rating repairer knows everything about your case and they can prepare a better quality complaint in less time.

    Image: africa/ FreeDigitalPhotos.net

  • Identity theft prevention in Budget 2012

    The Government is continuing with its plans to implement a national system for identity theft prevention through document verification by opening up its system to the private sector – despite or because of the slow uptake amongst government entities. The Government is holding on to the failing service in the hope of recovering money through the private sector. We look at this service and the benefit for identity theft prevention and protection of your credit rating.

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

    Identity theft which escalates to fraudulent identity documents invariably can lead to the perpetrator being able to take out credit in the victim’s name. Access to credit cards, loans and even property can all be possible. The victim can lose their ability to obtain credit if their credit rating is tarnished through identity theft. They may even be refused a mobile phone plan for the term of the credit listing – which is between 5 and 7 years depending on the listing type.

    So a few years ago the Government attempted to prevent the growth of fraudulent identity documents by implementing the National Documentation Verification System (DVS).

    The DVS forms part of the National Identity Security Strategy and is intended to provide an electronic validation platform that allows authorised government agencies to cross-check identity documents to identify their clients and prevent identity theft or fraud and misuse of the victim’s good credit rating.

    “It helps protect people’s identity and their privacy by allowing documents commonly used as evidence of identity to be checked electronically, quickly and directly by the document’s issuing authority,” Former Attorney-General Robert McClelland said in a statement to the media.

    “Through the DVS it is possible to verify the validity of Australian-issued passports, visas, as well as birth, marriage and change-of-name certificates and driver licenses from States and Territories.”

    According to ZDNet this week, the Government plans to spend $7.5 million more on this service to open it up to local businesses. ZD Net says in its story Budget 2012: ID verification opened to business, this is in order to recoup losses from the system’s troubled deployment since its $28.3 million inception in the 2006-7 Budget.

    In our post last year Can Official Documents Be Forged to Commit Identity Fraud? we blogged about the flailing DVS system. The road to implementation of this system had been neither cheap nor easy, with many reports of agencies failing to implement the system.

    At the time, technology and security publication, CSO criticised the slow take-up of the service in its article ‘Australia crawls towards its answer to identity fraud’.

    The story features the Australian National Audit Office’s report on the program’s implementation. The Report slammed the program’s sluggish roll out, noting that the “rarely used” system was unlikely to strengthen Australia’s personal identification process in the near future.

    It says the main problem was that many of the identity issuer and user agencies, such as Centrelink, the Department of Immigration, and state road authorities and birth and death registries, were not connected to DVS. Verification using the system also took longer than 20 seconds in a quarter of transactions, eroding its promised efficiency gains and convenience

    Possible merits for business

    According to Attorney-General Nicola Roxon this week, opening the system up to the private sector will allow the government to recover the cost of the program by bringing in an estimated revenue of $6.9 million per year through transaction fees for the service.

    The government claims that the service will help businesses save money by reducing unnecessary manual processes, data collection and recordkeeping. It has already seen interest from businesses in the telecommunications and financial-services industries.

    “Extending the document-verification service to business will improve identity security and support law-enforcement efforts against identity crime,” Roxon says in ZD Net.

    Businesses will be able to apply to use the service from the end of this year.

    The verification service does not allow access by agencies or private companies to the databases themselves, but rather sends encrypted verification requests to the relevant document issuing authority, which returns either a ‘yes’ or ‘no’ response to verify that person’s identity.

    With an ever-growing risk of identity theft for consumers and with it the pressure of compliancy to stronger privacy laws for business we may see this system take off as a potential safeguard for identity verification in the private sector in the future.

    If you would like more infromation about identity theft or need help in recovering your good credit rating, contact a reputable credit rating repairer, MyCRA Credit Rating Repairs tollfree on 1300 667 218 or info@mycra.com.au.

    Image: photostock/ FreeDigitalPhotos.net

  • The credit card mistakes that increase your risk of bad credit history

    What are the mistakes you could make with your credit card that potentially increase your risk of bad credit history?  We look at the advice for credit cards that could save your credit rating.

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

    Savings Guide Australia featured a great article on the 7 Classic Credit Card Mistakes. It reports on info from MSN Money on the Seven Deadly Sins of Credit Card Use. They provide some useful information on the right way to think to avoid credit card mistakes that could hinder your credit report.

    Some really important points from this SavingsGuide.com.au article are:

    Don’t max out the credit card…

    “Consistently nudging your limit at the end of the month is a sign you should be reconsidering your usage and budgeting to allow more financial space for saving.”

    Be wary of unnecessarily high credit limits…

    “It doesn’t even matter whether or not your card is maxed out, when applying for a loan, your credit limit becomes important. If it’s high, it can undermine your approval opportunities.”

    Avoid Cash Advances…

    “The price is high; huge interest calculated from the day you borrow, making it very difficult to get on top of your credit card repayments. Avoid at all costs.”

    Here are some more ideas to prevent your credit card use from leading to a bad credit rating from my post on How to avoid 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.

    If you want to see what is said about you on your credit report, you can do this for free every 12 months from Australia’s credit reporting agencies. For help with getting a copy of your yearly free credit report, you can contact MyCRA.

    We may also be able to help repair your bad credit history, or give you more information on your credit rating. Visit our website www.mycra.com.au or call MyCRA Credit Rating Repairs tollfree on 1300 667 218 for more details.

  • Credit reporting law changes – a look at complaints handling

    Credit reporting is set to be overhauled. In our arena of helping consumers make complaints and dispute their credit reports – ease of credit listing dispute for consumers would be a positive move. We look at just what to expect from these new credit laws in terms of disputed credit listings. Will consumers be given a bigger voice to make credit listing complaints?

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

    In a statement to the media on Wednesday, Attorney-General Nicola Roxon announced the next step in major legislative change to credit reporting. Amendments to the Privacy Act (1988) will be introduced during the Winter Sitting of Parliament.

    This finalises a long process of consultation following original recommendations made in a report by the Australian Law Reform Commission (ALRC) For your information: Australian Privacy Law and Practice back in August 2008.

    The ALRC report recommends 295 changes to improve Australia’s privacy framework, including major changes to credit reporting law.  The government then opted to respond to the Report in two stages, the first of which was released in October 2009. The first stage response outlines the government’s position on 197 recommendations relating to:

    • developing a single set of Privacy Principles
    • redrafting and updating the structure of the Privacy Act
    • addressing the impact of new technologies on privacy
    • strengthening and clarifying the Privacy Commissioner’s powers and functions
    • introducting comprehensive credit reporting and enhanced protections for credit reporting information
    • enhancing and clarifying the protections around the sharing of health information and the ability to use personal information to facilitate research in the public interest.

    Further information is available from www.ag.gov.au/Privacy/Pages/Privacy-Reforms.aspx.

    Draft legislation on this First Stage Response for the Credit Reporting provisions was put to the Senate for tabling, and for referral to the Finance and Public Administration Committee to consider.  The Committee’s final report on the credit reporting provisions was released in October 2011.

    On Wednesday the Attorney-General promoted changes to credit reporting arrangements as a ‘modernisation’.

    “There have been big changes to the way we access finance since 1990 when the existing credit reporting provisions came into effect,” Ms Roxon says.

    She says benefits for consumers include:

    • making a clear obligation on organisations to substantiate, or show their evidence to justify, disputed credit listings
    • making it easier for individuals to access and correct their credit reporting information
    • prohibiting the collection of credit reporting information about children
    • simplifying the complaints process by removing requirement to complain to the organisation first, complaints can be made directly to the Privacy Commissioner, and by introducing alternative dispute resolution to more efficiently deal with complaints.

    “Many consumers have expressed their frustration at not being able to understand their credit rating.

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

    The Government expects the credit industry will benefit because the reforms provides a more accurate picture of an individual’s credit situation to help them make a robust assessment of credit risk, which is expected to lead to lower credit default rates.

    The role of the Privacy Commissioner will also be boosted so complaints and investigations can be more easily resolved.

    The Privacy Commissioner said in a speech on Exploring the Changing Privacy Landscape and Impending Regulations on Friday that he can see benefits for consumer credit ratings.

    “Turning now to the credit reporting arrangements, changes include a clearer obligation on organisations to substantiate, or show their evidence to justify, disputed credit listings.

    On the consumer side, there will easier access for individuals to correct credit reporting information,” Privacy Commissioner Timothy Pilgrim said.

    The clearer obligation for on organisations to substantiate or show evidence to justify disputed credit listings would be a positive change cementing requirements of creditors and hopefully easing some of the difficulty in having credit reporting information corrected.

    Currently the official procedure for making complaints to creditors about credit listings has been inadequate. The section on Complaints in the Government’s Exposure Draft introduced a clear process of complaint for the consumer and the obligations of creditors and or credit reporting agencies to follow when a consumer makes an official complaint including escalation of that complaint.

    But the actual process came under criticism from reports to the Senate Committee for its complexity and two-step process of correction request and official complaint – which could confuse consumers.

    The Office of the Australian Information Commissioner (OAIC), Consumer Action Law Centre and Consumer Credit Legal Centre NSW voiced concern that the two stop approach resulted in a complex complaints handling process.

    It was also criticised by some creditor bodies for sometimes crossing over existing law in their individual Acts.

    It is unclear what the outcome will be from the Senate and what will be certain to be included as new law in the Complaints arena.

    It is still likely that as consumers will need to address complaints as they relate to law, it could remain difficult for consumers who are not skilled in credit reporting law and don’t have the time to get educated on it to make a successful case to creditors in some instances. So whilst they may be provided with more justification from the creditor on why the listing should be there, the process could still put consumers in the position of needing to be savvy with credit reporting law to have muscle to dispute that justification.

    And whilst consumers may find the official process of complaint easier, there still may be issues around negotiating with creditors on their own behalf which could hinder their chances of successful dispute.

    For more information on how credit listing errors could affect your ability to obtain credit contact MyCRA Credit Rating Repairs 1300 667 218 or visit the main website www.mycra.com.au.

    Image: stockimages/FreeDigitalPhotos.net

  • 12 Quick Privacy Tips for Parents

    As we close off Privacy Awareness Week 2012, it’s important to take away some information that people can use in their daily lives to protect their personal information, to prevent identity theft and to protect the integrity of their credit file from credit fraud. If you are a parent who wants to get involved in what your child is doing online, or even if you feel overwhelmed by the online options open to young people today – this information could save you from the dangers that occur through internet use and allow both and your child to get on the same page about online safety.

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

    The Office of the Privacy Commissioner, Canada has put together some information for parents on 12 Quick Privacy Tips which show how to navigate a digital environment and how parents can lead their children in better Privacy practices.

    We have included this information sheet for you in its entirety:

    12 Quick Privacy Tips for Parents

    It can be tough raising kids in a digital environment. Many of them use the Internet effortlessly, and easily adapt to new devices that connect to it. For many of us, these tools have become a routine part of our children’s lives, as they use them to chat, surf, post, play and learn. The Internet has become one of the most powerful tools they have to connect with friends and make new ones.

    Many kids, however, don’t fully understand the impact that some online activities may have on their privacy. Below are 12 tips to help you limit the risks to your children’s personal information, while allowing them to make the most of their time online.

    •1. Talk to your kids.
    It’s important to know the Internet spaces your kids frequent and the devices they use to go online, to help you understand the nature of personal information they may be sharing. Technology changes rapidly and many children are ahead of adults in adapting to new options. Talk with them often about their online activities to keep up with what they are doing and interested in.

    •2. Try it out.
    It’s not enough to know what online spaces and devices your kids are using. To understand the nature of the personal information they are sharing, you should know how they are using and experiencing them. So, dive in. Try out the family web cam if you have one, play the online games they love, create a profile on the social networking sites they frequent, and download some music.

    •3. Keep up with the technology.
    Many mobile devices, like smart phones, tablets and gaming consoles, can connect to the web and have video cameras. The lines between devices are blurring, and it is important to know what kind of device your child has, so that you know whether they are merely playing a game, or if they are using the Internet and sharing personal information.

    •4. Make restricting privacy settings a habit.
    Most social networking sites have extensive privacy options that children should learn to use. For each site where your kids are posting information about themselves, their family and their friends, sit down with them and review that site’s privacy policy. Then modify the privacy settings of their account, and have them consider how the information they are posting could be used – or misused – by others.

    •5. Make password protection a priority.
    Children need to understand that their online information will be better protected if they use passwords. They should use different passwords for different sites and they should change them regularly. Encourage them to ensure their passwords are strong (eight characters or more and a variety of letters and/or numbers), to change them regularly, and to never share them with anyone.

    •6. Emphasize the importance of protecting mobile devices.
    The first thing anyone should do with a new mobile device is activate the password protection. Talk to your kids about this, and the importance of protecting the device itself – not just because it may be expensive, but because it may contain their personal information. A device that gets into the wrong hands could result in embarrassing or even malicious videos or pictures being posted online by someone else in your child’s name.

    •7. Remind your kids that what they post on the Internet is not always private.
    Your kids should understand that once they post content online, they no longer have control over it. It can be forwarded, copied and pasted, manipulated, printed out or saved – it can remain online, in some form, potentially forever. They should know that even password-protected pages are not totally secure, and that deleting information doesn’t mean that it’s gone forever.

    •8. Teach your kids to think before they click.
    It can take only seconds to snap a photo and post it to the Internet, or to post a comment. But it can be nearly impossible to permanently delete that comment or photo once it’s posted, as it can then be downloaded or archived by others. This is why it’s so important for kids to think twice about every piece of personal information before they post it to the Internet. They should only post things that they would be comfortable with the whole world seeing.

    •9. Stress the importance of knowing your real friends.
    Kids need to know that, online, they can’t be 100% sure of who they’re talking to, so they should never accept friend requests from people they don’t know in real life. Online friends can end up accessing online photo albums, reading personal comments, copying and pasting information, knowing what you’re doing and where you are. Remind your kids that a “friend” of a “friend” of a real-life friend is really just a stranger.

    •10. Teach your kids that their personal information is valuable.
    Kids need to know that many people and companies want their personal information to sell or market things to them in the future. New and exciting technologies are emerging daily, but often personal information is the cost of admission. Review the personal information they often need to surrender in order to play online games, fill out an online survey or quiz, join virtual worlds or even just shop online. Discuss potential ways to limit that information, for example, by completing only required fields, using pseudonyms, and using incomplete information.

    •11. Let your kids know that you are there if they make a privacy mistake.
    Stay calm if your child makes a mistake, like posting something they shouldn’t have. Help them remove the post, where possible, and talk with them about how they can avoid a similar mistake in the future. If you “freak out” or deny access to them, they may not come to you for help when they really need it in future.

    •12. Set a good example.
    Remember, those cute potty training or bathing photos of your own child that you are tempted to post can also be copied and shared, and remain online forever! Just as you would respect your friends when posting photos or other items that contain their personal information, respect your kids’ personal information too. Set a good example when you’re online so your kids have a good role model to look to if they’re wondering what kind of information is OK to post.

    Credit fraud: What can happen to your child if their personal information is extracted by fraudsters

    Superintendant Brian Hay from the Queensland Fraud Squad told Channel 7’s Sunrise Program in October last year, that criminals were targeting the personal information of our young Facebook users.

    Supt Hay said criminals had been known to be storing the personal information of children around the world in databases to be used when they turn 18 and are able to take out credit.

    “We know that the crooks have been data warehousing identity information, we know that they’ve been building search engines to profile and build identities,” he told Sunrise.

    “We need to tell our children if you surrender your soul, if you surrender your identity to the internet it could come back to bite you in a very savage way years down the track,” he says.

    Most identity theft victims have no idea they have given away personal information to fraudsters until it is too late. If identity fraud sees accounts in the victim’s name going undetected and unpaid past 60 days, the credit file holder can have their good name destroyed for 5-7 years due to defaults.

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

    For more education for parents about the risks of cyber-crime and tips for staying safe, the Government has put together the CyberSmart website, which has special sections for parents and children. You may also like to visit the government’s Stay Smart Online website, which provides information for Australian internet users on the simple steps they can take to protect their personal and financial information online. It also has an Alert system which you can subscribe to, which notifies you of the latest risks to your personal information or computer.

    Don’t get caught with credit rating defaults that should not be there. Don’t let fraudsters take over your good name. Educate yourself on what a valuable commodity your personal information is, and how you can protect what is your ticket to financial freedom in this modern world – your credit file – from fraud.

    Image above: Keerati/ FreeDigitalPhotos.net

    MyCRA Credit Rating Repairs is proud to be a Partner for Privacy Awareness Week 2012.