In 2014-2015, consumer advocates from 131 community organisations helped consumers lodge nearly 472 disputes with FOS. Just over half of these people were experiencing financial difficulty and in urgent need of assistance. We value the enormous contribution of consumer advocates across the country – here are just a few of their stories.
Answering the calls
A short-term telemarketing role in 2006 convinced then law student Alexandra Kelly that she had a knack of picking up verbal cues over the phone.
Now Alexandra uses this skill to help consumers who cannot afford legal or financial representation when they ring the Sydney-based Financial Rights Legal Centre, where she is co-principal solicitor.
She is one of about 20 lawyers and financial counsellors who answer calls to the centre’s Credit and Debt Hotline and national Insurance Law Service, providing information, advice and referrals. She also represents clients in court and tribunals and in disputes through Ombudsman services such as FOS.
Alexandra speaks to many distressed consumers who are angry with the situation in which they find themselves.
A problem which she says is reaching crisis point is the proliferation of financial difficulty businesses such as budgeting, credit repair and debt administration and consolidation services.
She says the service provided by these for-profit and largely unregulated businesses is generally poor.
"The more consumers use them, the more harm these businesses do," she says. "They prey on the most vulnerable of people who typically pay a lot of money to get in more financial trouble."
"People in financial distress need unconflicted advice. Genuine, free services like ours are run by people with professional standards and accreditation. And we aren’t here to make money; we’re here to work in the best interests of clients."
Alexandra joined the FOS Consumer Liaison Group in November 2013. She finds it a useful way of understanding how the FOS process works, so that she can inform clients.
"For example, it’s important for my clients to know that they can expect to speak to a case manager within seven days now," she says.
Being on the Consumer Liaison Group also gives Alexandra an opportunity to share client experience of FOS with senior management, and through FOS, advocate for consumers with the financial services industry.
"My goal in every phone call is to help people articulate and assert their legal rights, and to speak up for consumers who cannot speak for themselves," she says.
Vulnerable people in financial hardship are one of Legal Aid NSW’s priority client groups. Legal Aid NSW has many initiatives including the Civil Law Service for Aboriginal Communities, the Work & Development Order Service and the Mortgage Hardship Service. They also provide assistance for people in the event of natural disasters like bushfires and floods.
A recent initiative is the formation of the Financial Hardship Working Group (the FHWG).
The FHWG is collaboration between the Law and Justice Foundation of NSW and the Cooperative Legal Service Delivery (CLSD) Program at Legal Aid NSW.
The FHWG grew out of the recognition that some vulnerable groups face structural and practical barriers in accessing support services, including external dispute resolution. These groups include people in regional and remote NSW and clients from culturally and linguistically diverse (CALD) backgrounds.
Membership of the FHWG is drawn from Legal Aid NSW, community legal centres, financial counsellors, LawAccess NSW and Ombudsman schemes. FOS Australia is an active participant in the FHWG.
The FHWG is working towards finding practical solutions to some of the issues facing vulnerable and disadvantaged people in NSW, with a focus on CALD, remote and Aboriginal communities, including:
- easier access and sign-up to the Do Not Call Register; and
- expanding the reach of external dispute resolution schemes through inter-agency collaboration.
The CLSD Program is a regionally based program run by Legal Aid NSW comprising 11 partnerships of legal and related non-legal services in regional and remote NSW. CLSD Program partnerships meet quarterly and collaborate on initiatives to address unmet and emerging legal needs of their constituent vulnerable client groups. CLSD Program participants generally include representatives from Legal Aid NSW, Community Legal Centres, the Aboriginal Legal Service, local courts, financial counsellors and tenancy, youth, domestic violence, disability and migrant services.
For more information about the FHWG, contact Jane Kenny, Grants and Legal Information Manager, Law and Justice Foundation of NSW on (02) 8227 3210 or Jenny Lovric at the CLSD Program, Legal Aid NSW, on (02) 9219 5102.
You can find more information on the CLSD Program at www.legalaid.nsw.gov.au/clsd
CentaCare is the official welfare service of the Catholic Church in Australia, and the Diocese of Wilcannia-Forbes covers the western 52 per cent of New South Wales.
Established in 1996, CentaCare Wilcannia-Forbes delivers vital programs and services in rural and remote locations in western NSW, including financial literacy education to Aboriginal and Torres Strait Islander communities.
Lynda Edwards, Manager of the Manage Your Income, Manage Your Life program at CentaCare Wilcannia-Forbes, visited FOS Australia during NAIDOC week. Lynda spoke to FOS staff about the work she and the other Manage Your Income teams are doing with CentaCare Wilcannia-Forbes, especially in assisting people in financial hardship. She also spoke about the importance of cultural awareness and cultural competency.
The Manage Your Income Program aims to increase the financial literacy of Aboriginal and Torres Strait Islander people, empowering them to make informed choices about their finances. This has a positive effect on individuals, families, and ultimately, the community as a whole.
“CentaCare Wilcannia-Forbes has always been proactive about investing in the communities it services,” Lynda said.
Part of the effort organisations like FOS can make to bridge the gap should be to collaborate with service providers on the ground in rural and remote locations. This can help ensure dispute resolution is accessible to Aboriginal and Torres Strait Islander consumers.
“In terms of truly building community capacity, CentaCare Wilcannia-Forbes always tries to engage team members locally. Activities are delivered by local people that already have a strong connection to their community, meaning they can hit the ground running, as they already have a great rapport with the community. It also means that the professional capacity of the community is strengthened.”
Lynda also heads up the Steering Group that coordinates a national forum for Aboriginal and Torres Strait Islander financial counsellors and financial capability workers. From its beginnings in 2006, Lynda has seen the number of Aboriginal and Torres Strait Islander workers grow and strengthen in the financial literacy space.
The ATSI Forum met in Canberra earlier this year, inviting representatives from external dispute resolution schemes to share in a conversation about the issues experienced by Indigenous consumers and the cultural barriers to making complaints.
Christine Raymond has been a financial counsellor with Uniting Communities for over seven years. Based at Christies Beach, approximately 30 minutes south of Adelaide, she works three days a week as a general financial counsellor, and one day a week at the Consumer Credit Law Centre South Australia (CCLCSA).
The CCLCSA was formed in August 2014, the result of significant advocacy over several years to secure funding for the service. Given the benefits of similar centres in other states are readily apparent, Christine and others knew that it could greatly benefit the people of South Australia. The CCLCSA staff consists of two lawyers and three financial counsellors, and provides services in Adelaide, Medindie Gardens, Smithfield and Christies Beach. Although newly established, there is already significant demand for the service.
Christine’s clients present with a wide range of issues, and there are some emerging trends. “We are seeing relationship debt issues more often, including those related to domestic violence,” she says. “People at risk of losing their homes is always a common factor in financial hardship. We’re also seeing more people coming to us who have never known financial hardship issues before.”
As well as seeing clients, Christine helps deliver the Diploma of Community Services (Financial Counselling) in partnership with TAFE SA. She also hosts students participating in the placement requirement for the diploma.
Christine has been a FOS Consumer Liaison Group member since 2012.
Sandra Blake was born and raised on a sheep, wool and beef farm in north east Victoria and trained as a financial counsellor in Melbourne. She combines her skills and training, and knowledge of local farming issues working part-time as a financial counsellor at UnitingCare Wodonga, and part-time as a rural financial counsellor at Goulburn Murray Hume Agcare.
The people she sees in both roles need help understanding their financial position, although Sandra says this is an area of particular concern with farming clients, where debts can be much higher, combined with significant asset protection. In any given week Sandra may be helping people prepare budgets and cash flows, negotiating with lenders, including Farm Debt Mediation, untangling issues around succession planning and helping families identify the Centrelink benefits they are eligible for.
Particularly in her role as a rural financial counsellor Sandra helps people cut through financial jargon to better understand the viability of their agricultural businesses, whilst maintaining their passion for farming. A farm that is turning over millions of dollars may still not be viable, and being able to talk to farmers in their own terminology is key.
Each farming business is unique and needs a different solution depending on the type of farm; the Goulburn Valley, Ovens and Murray region in northern Victoria and Riverina in South West New South Wales is home to fruit and vegetables, dairy, beef, sheep, wool, grains and wine production. This is where Sandra’s background helps to bridge the gap between her clients and FOS.
“There’s definitely a learning curve involved for everyone, including myself”, Sandra says. “In a recent conversation with FOS I needed to talk about an issue a farmer was having with a loan for his Header – I began the conversation by explaining what a Header was!”
“Most rural financial counsellors have contact with FOS and appreciate the work they do”, Sandra says. “Awareness of external dispute resolution and how to get the most out of it is important.”
The civil law division of the North Australian Aboriginal Justice Agency (NAAJA) is no stranger to FOS, says solicitor Francesca Ciantar.
The more we get out to remote communities, the more we are able to help people with their consumer disputes through FOS. We come across issues which you might not see in other parts of Australia. We’ve had a few scenarios where an Aboriginal person has signed up to a credit contract that they don’t actually understand. It might be due to language or literacy issues – many of our clients have English as a third or fourth language and may not be able to read complex documents. Others don’t understand the concept of interest – they know they have to pay back the money they borrow but don’t understand having to pay extra for interest or fees” says Francesca.
NAAJA has seen that when it comes to insurance matters, many clients don’t understand the policy documents and often misunderstand the cover they bought.
“One client with comprehensive car insurance recently thought that the $30,000,000 worth of liability on her policy schedule was how much she would get paid if something happened to the car. Another was signed up to pet insurance but they don’t have a pet.”
Five NAAJA solicitors recently attended the FOS Forum in Darwin run by Philip Field and Meredith Walker.
“It was really interesting to meet Philip and Meredith and be given the opportunity to see FOS from the inside out, so to speak” Francesca says. “It’s good to know what their team is looking for in a complaint because it means we can streamline our approach and resolve disputes more efficiently.”
“FOS is the great equaliser – it helps many people avoid costly, stressful litigation, and it’s a very effective dispute resolution mechanism in and of itself.”
The Indigenous Consumer Assistance Network (ICAN) provides consumer education, advocacy and financial counselling services to Indigenous consumers across the nation.
With the many recent natural disasters in Queensland, the need for financial counsellors in that area has risen dramatically and their role has expanded – especially regarding general insurance complaints. Jon O’Mally, an ICAN Senior Financial Counsellor, recently assisted a Cyclone Yasi victim to negotiate with their insurer. The case had been stalled in negotiations for over 13 months. With the help and assistance of ICAN the consumer was able to receive advice and the help they needed to navigate their way through the claim process to ultimately a successful end for both the consumer and insurer.
Over the past twelve months, ICAN has enjoyed a strengthened relationship with FOS. ICAN participates in the FOS Consumer Liaison Group (CLG)*, which provides an opportunity for FOS to share ideas and information with consumer representatives from across Australia who have a significant number of disputes with us.
Jon O’Mally says that his enhanced relationship with FOS has helped him to respond to the increased disputes occurring as a result of the recent natural disasters in Queensland. Jon says: “I have been a financial counsellor going on 18 years and I still believe it is important to utilise contacts, resources and available networks to insure that as a financial counsellor I am providing the highest standard of service to my client”.
*ICAN is one of eleven members of FOS’s recently launched Consumer Liaison Group (CLG). The CLG is made up of consumer representatives and advocates from around Australia. The CLG was established to improve the flow of information and ideas between FOS and those who represent the most vulnerable Australians. In the next edition of The Circular we will report on the outcomes and improvements we have made to our process and education programs as a result of ideas raised within this forum.
The Consumer Protection Unit of Legal Aid Queensland is making legal rights a reality for disadvantaged people in Queensland, says Paul Holmes (Solicitor).
The Consumer Protection Unit (CPU) is a specialist team that provides free community legal education, information, expert advice and casework services to vulnerable people across the state.
To date, the CPU has lodged over 400 disputes with the Financial Ombudsman Service (FOS) on behalf of clients who are facing:
- financial hardship
- repossession of their house or car
- problems with their mortgage, personal loan, credit cards or other loans
- problems with unsolicited consumer contracts sold on the phone or door-to-door
- insurance related issues
It is important for vulnerable consumers to feel empowered in legal processes and, regardless of the result, to feel that their story has been heard. Paul Holmes, Solicitor at Legal Aid Queensland, says: “For many of our clients the main focus may be the loss of something intangible. Losing an asset like a house represents more than just the bricks and mortar. It’s important not to lose sight of this amongst legal complexities. I’ve learnt over the years that listening and understanding what a consumer has experienced is just as important to them as representing their legal interests.”
The CPU’s close working relationship with FOS provides the team with a sound understanding of the FOS EDR process, and how best to assist vulnerable consumers through the strongest presentation of a client’s case.
Networks such as the Consumer Liaison Group also provide Legal Aid Queensland with an excellent opportunity to communicate with FOS on a regular basis about how well its process works for the most vulnerable consumers as they try to access justice and have their disputes resolved fairly and efficiently.
For more information about Legal Aid Queensland please visit www.legalaid.qld.gov.au.
The Money Workers Association of the Northern Territory (MWANT) is the professional body for financial counsellors and financial literacy educators in the Northern Territory. The Association provides training, professional development, networking opportunities and professional standards for their members.
Ameena Serao, Chair of MWANT, says that their members work within some of the most remote locations of Australia. By car, MWANT’s 95 members can travel between 800-900km away from their home/office base (such as Alice Springs, Katherine or Darwin), or they may take charter planes between 3-4 hours away. These distances mean they have limited referral resources and are reliant on Ombudsman services such as FOS to assist with client complaints and to help provide a voice for the financially vulnerable members of the community.
MWANT members deal with many different client complaints, including targeted scams, unfair contracts and credit disputes which often result in financial hardship.
Targeting scams and unfair contract disputes or complaints are particularly prevalent in the Northern Territory. English is a second or third language for the vulnerable Aboriginal population, who regularly accept what they are being told by creditors and sales people without question. For this reason, FOS plays a vital role for the Northern Territory consumer.
MWANT works with services like FOS to ensure they provide their members with the latest information to better assist clients. This is done through networking and training forums such as FOS’s three-hour forum in the Northern Territory at the Annual MWANT Conference in Alice Springs.
“We are looking forward to participating in the FOS Forum, as it will provide our members with the tools and knowledge to better assist clients” said Ameena.
“Knowledge is power, so we also look forward to continuing to develop the strong working relationship we have with FOS.”
The City of Wanneroo, on Perth’s northern boundary, is one of the fastest growing local governments in Western Australia. Between 2001 and 2011, its population almost doubled from approximately 80,400 to 160,300, and is estimated to grow by more than 7,800 residents each year for the next two decades. The City is expected to become the most populated local government in the state within the next 10 years.
The City is one of only six local governments in Western Australia that provides financial counselling services. The City has been operating its valuable service for over 25 years, providing residents with access to seven staff who, between them, have over 50 years of financial counselling experience. One of the City's senior financial counsellors is the only trained counsellor who specifically assists small business owners in Western Australia facing financial difficulties.
Residents can access the City’s financial counselling services at its head office or through two community outreach centres. Counsellors also provide outreach services by working with social workers and visiting hospitals, refuges and home visits on request. In addition to face to face counselling, the City offers community education workshops at various outreach centres throughout the City of Wanneroo as a preventative strategy.
Despite being one of only a few local governments to deliver financial counselling services, the City of Wanneroo has found the setting provides a number of advantages:
- a range of accommodation (such as community centres) is available to use for community education
- access to a good support network of services such as IT, HR, Financial management etc
- the service can be offered to employees and connected to other services such as the Home and Community Care Program
- the City’s existing networks (such as links to councillors, MPs and other government and non government agencies) can be directly accessed by the financial counselling service.
City of Wanneroo financial counsellors are aware of the important role that FOS plays in the sector, and they appreciate the active role FOS plays in the Financial Counselling Association WA’s annual conference, providing professional development and networking opportunities with Ombudsmen and case managers. This year FOS will deliver an afternoon of interactive workshops that illustrate our process and approach using real world case studies.
Lillian Leigh must have impeccable timing.
The senior solicitor in consumer law accepted a special projects role with Legal Aid NSW just before the Blue Mountains fires broke out last October. The role was designed to help vulnerable people recover from disasters.
Lillian and the rest of the Legal Aid NSW team arrived in the Blue Mountains five days after the fires started, and worked seven days a week for eight weeks. Collaborating with the insurance industry, they offered victims early legal advice to prevent them suffering undue anxiety.
“We were seeing people who were traumatised and had lost everything,” she said. “A lot of our work was to encourage people to come back to us later if any problems arose.”
Lillian said it was a good example of how her organisation must reach out to clients, rather than the other way around.
“We find that people generally tend to confide in professionals such as their doctors and community workers about consumer issues; they never say they want legal aid, so we are going out to people for example in remote Aboriginal communities and talking to our partners such as financial counsellors who can refer people to us,” she said.
“We did a survey when we were at the Blue Mountains, and of those people who saw us, almost all (91%) were very appreciative of our help.”
She is impressed with how the financial services industry has changed since she took up her role with Legal Aid NSW 10 years ago.
“Back then, you couldn’t have the conversations you have now about, for example, financial hardship,” she said. “Now there’s a whole process in place. Law reform has played a part and consumers and financial services providers can have a conversation through FOS that builds understanding on both sides.”
She said FOS was doing well in consulting and communicating its process changes to stakeholders.
“Inevitably change affects people but I feel like we’ve got the space to talk about how these changes may affect vulnerable consumers,” she said.
Lillian said that socially and economically disadvantaged people were highly likely to face credit and debt problems and financial hardship. Loss of income through illness, an accident, unemployment or marriage breakdown were the main catalysts for financial hardship, and legal problems inevitably led to health problems.
“It’s important for us to always remember that the smallest outcome can make a big difference to people’s lives,” she said. “The most rewarding part of the job is to be able to achieve outcomes for people in need.”
Lillian has been the Legal Aid NSW representative on the FOS Consumer Liaison Group since March 2014.
In August, we spent 60 seconds with Carmel Franklin, Director, Care Financial Counselling Service; Chair, Financial Counselling Australia; Member of the FOS Consumer Liaison Group
How has financial counselling changed in recent years?
When I started in the sector 20 years ago, there was much more of a sense of ‘us and them’ with industry. In the past few years, we have developed a collaborative approach with financial institutions which is delivering better outcomes for clients.
The introduction of the National Credit Code has enabled us to work more consistently and efficiently across Australia, and the industry recognises the value in working with us and that we have matured as a sector. We now have opportunities that we never had before for formal engagement with industry, for example through the Australian Bankers’ Association’s industry strategy working group.
How did funding uncertainty affect the sector in the past year?
The past year has been enormously challenging for the sector and because organisations have been unsure whether they will retain funding, some counsellors have already left the industry and in most cases, they weren’t replaced.
However, it’s clear that the Government values the work we do in the sector and, as the peak body, we have been invited to apply for additional funding – in particular to support financial capability and money management workers.
How do financial counsellors help consumers?
The Wyatt Foundation has undertaken a cost/benefit analysis that shows the many benefits of financial counselling for people in financial hardship. We provide people in such situations with information on all of their options, and support them to work through these options. We also advocate on behalf of clients with creditors. The aim is to get sustainable payments in place to help them get back on their feet.
Is demand for financial counsellors increasing?
Yes, we have about 950 financial counsellors across Australia, but as consumers’ financial situations become more complex, it is difficult for us to keep up with demand. Financial institutions increasingly recognise the value of financial counsellors, and are referring a lot more people to us – and we encourage that - so it is frustrating (for us and them) when they are told that our services have a waiting list.
Why are demands from consumers increasing?
Historically, people were in debt but usually had only one credit card. Now, there are so many products available, and more choice can mean more confusion. Also, life circumstances are increasingly complicated for many people, with complex family situations, marital breakdown and mental health issues much more common.
We have to keep pace with all this complexity through training, professional development and supervision to ensure financial counsellors have the very specific skills and knowledge to deal with clients, especially those in vulnerable situations.
FOS plays a fantastic role here – when people cannot come to an arrangement with their financial institution, they can take their matter to FOS. Being on the Consumer Liaison Group has given me an insight into how FOS works, and this understanding has helped me advise consumers on how to achieve the best outcome for them.
How long have you been in your role?
I’ve been at the Consumer Action Law Centre for eight years and have been in the director role for just over two years. I share this role with Tom Willcox.
Why did you choose to work for the Consumer Action Law Centre?
I always wanted to work in a community legal centre for vulnerable and marginalised people. CALC is a really strong legal centre that integrates its legal case work and financial counselling work with the broader policy and law reform work it does. This means we are able to effect broad change for a greater number of people in the community. It’s also just a great place to work.
What sort of help are you able to give your clients?
We provide immediate telephone legal advice and depending on the query, we will draft documents for people who seek our advice and assist them with their case as far as possible. We also do legal case work in which we act on behalf of individuals in their dispute with a trader or financial services provider, including litigating on their behalf if necessary. We also offer telephone financial counselling through our MoneyHelp service. Our policy and campaign work then picks up on the issues that our legal and financial counselling teams are seeing on the ground.
What are some of the significant consumer problems that your client base faces?
One of the main ones is financial hardship – whether it is the result of job loss or over commitment. We are therefore very concerned when we identify instances of poor hardship practices, prohibitive debt collection practices and irresponsible lending. This is also why Financial Counselling Australia’s Rank the Banks Report is such an important publication. It holds financial institutions to account for those poor practices and acknowledges those institutions which are responding appropriately to people’s hardship.
We are also seeing small amount credit contracts (payday lending products) causing extreme financial hardship to the most vulnerable and marginalised members of the community which is why we are really excited NAB is taking steps to discontinue funding to institutions which offer those sorts of products.
Has the type of person who walks through your door for help changed over time?
We have always, and we continue to, primarily assist people in the community who are experiencing economic or social disadvantage. I don’t think the type of person who walks through the door has changed much but it’s possible that since the financial crisis there’s a large amount of people who once lived reasonably comfortably who have been or are being affected by job loss or reduced hours and the significant ongoing financial, emotional and psychological stress brought on by this.
How many people work at CALC?
We have around 35 people – both full time and part time and a strong volunteer base.
Hard working duo Katie O’Connor-Burger and Marie Rogers job share one financial counsellor position for the Murwillumbah and Tweed Financial Counselling Service which helps the Tweed Shire population of more than 90,000 people.
In 2012-2013 they lodged 28 disputes on behalf of consumers.
Any Tweed Shire resident concerned about their personal debts can make a face-to-face appointment to see Marie or Katie. Most of the Service’s clients receive a Centrelink benefit or are otherwise economically-disadvantaged, vulnerable people.
The Service also provides education to the community regarding consumer credit laws and financial hardship.
Marie and Katie work closely with other community service providers, both governmental and non-governmental, to network, share ideas, talk through issues and provide client referrals.
The financial counsellors said casework has become more complex in the last three years – mostly due to the ongoing effects of the GFC and clients’ ongoing reliance on credit to manage their day-to-day living.
Role: Financial counsellor/practice supervisor with Anglicare Tasmania and member of FOS’s Consumer Liaison Group.
Life outside work: Phil lives in Devonport and is married with four adult children. He is a passionate supporter of the Richmond Football Club and enjoys walking and gardening. He has been working as a financial counsellor for 15 years.
How many clients do you see in a typical month?
When I was a full time financial counsellor I would see 60 clients per month but these days I’m primarily supervising so it’s a lot less.
What are some of the key reasons your clients find themselves in financial difficulty?
A lack of financial literacy within families - many people don’t budget and children copy their parents’ practices. I think there’s still a “get it now, pay later” mentality. I think people still see credit as extra cash. That’s a problem.
What advice would you give to anyone interested in joining the industry?
You want to make sure you have a passion to make a difference. You must have empathy and be non judgemental. You have to be prepared to get out of your comfort zone to influence the big picture issues. It can be a very stressful job but also very satisfying because you regularly see what a difference you make.
Is technology a help or a hindrance in terms of your role?
It’s been a major help. Obviously communications are a lot faster which means you get quicker replies back from creditors. It’s helpful with preparation of documents like budgets, accessing information from websites and video conferencing. There are many advantages.
What’s changed for the better in your industry? And what has changed for the worse?
The biggest change for the better was probably when the Rudd Government got in first time around and they actually funded a peak body for the sector. This enabled Financial Counselling Australia to be established, staff to be employed and the establishment of a national Financial Counselling diploma.
I also think members of the banking industry are actively looking to be better corporate citizens. Instead of us and them, it’s more about how we can help each other these days.
In terms of change for the worse, there’s been an increase in high-charging short term lenders.