referral audit financial counseling australia is the peak body for financial counsellors in...
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REFERRAL AUDIT
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Click Here: Who is Referring to Financial Counselling Services?
March 2014
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial Counselling
Australia is the peak body for
financial counsellors in
Australia.
About this Document
• This document has information about a number of organisations that refer to financial counselling and/or encourage Australians in financial difficulty to contact a financial counsellor.
• The audit included government agencies, government regulators, financial institutions, industry peak bodies, external dispute resolution schemes and information about financial counselling that is required to be included by the credit laws.
• The document focuses on the most common referral sources.– There are other government or industry organisations that refer to
financial counselling that have not been included.– The audit did not include individual utilities or telcos.
Acknowledgement: FCA thanks Alex Purcell, a law student volunteering for FCA, who undertook the original desktop research that formed the basis for this paper.
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Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
FindingsNumbers of organisations encouraging referrals to financial counsellors• Six large government agencies
• eg MoneySmart, the financial literacy website of the Australian Securities and Investments Commission. ASIC is Australia’s lead agency for financial literacy.
• Three government regulators• eg Australian Financial Security Authority (AFSA). AFSA regulates
personal insolvencies.• All four major banks • The dedicated consumer focused websites of the key industry
bodies in financial services • Australian Bankers Association, Insurance Council of Australia
and Australian Retail Credit Association• Major Ombudsman Schemes - for financial service providers,
telcos and utilities
3
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
Findings continued
Referral Content• The most common referral content was to FCA’s website and the
national phone financial counselling number – 1800 007 007. – Only one organisation included the “Find a Financial Counsellor Map” (
www.understandinsurance.com.au)– Very few organisations included information about
www.debtselfhelp.org.au, the website FCA set up specifically with information for people in financial difficulty
Prominence • The prominence of the referral information varied, reflecting the
target group for each website. • eg information on the AFSA website, which regulates bankruptcy, is very
prominent
A two way street• The referral process is a two way street. Financial counsellors
interact with a number of organisations included in the audit. • Example: financial counsellors may lodge complaints with ASIC or the
ACCC about practices which have breached the law• Example: financial counsellors sometimes refer clients to the
MoneySmart website or the ABA “Doing it Tough” website
4
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
Conclusion• Numerous organisations, both in the private and public
sector, encourage Australians in financial difficulty to contact a financial counsellor.• These organisations are generally the largest or most significant
in the area of financial services (the audit did not include individual telcos or utilities)
• The audit demonstrates that financial counselling is an integral component of the service delivery framework for Australians in financial difficulty.
• FCA will suggest changes to the referral information on the sites of some organisations, to include reference to the www.debtselfhelp.org.au website• This site was set up by FCA to assist people in financial difficulty.
It includes over 50 fact sheets, a self help tool and letter templates. This will be more useful than the FCA corporate website.
Appendix 1 has more information about financial counselling.5
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
Overall Snapshot Government Agencies• MoneySmart (ASIC)• www.disasterassist.gov.au• Dept of Social Services• Dept of Human Services• Consumer Affairs Victoria• Australian Human Rights
CommissionGovernment Regulators• Australian Financial Security
Authority• Australian Energy Regulator• Australian Communications
Media AuthorityIndustry• ANZ, Comm Bank, NAB and
Westpac
Industry Peak Bodies• Australian Bankers Association –
www.doingittough.info• Insurance Council of Australia –
www.understandinsurance.com.au• Australian Retail Credit Association –
www.creditsmart.org.auOmbudsman Schemes• Financial Ombudsman Service• Credit Ombudsman Service• Telecommunications Industry
Ombudsman• Energy and Water Ombudsman
Victoria• Energy and Water Ombudsman NSWRegulatory Requirements• Warning statements and prescribed
forms under the Credit Law refer to financial counselling 6
The audit did not include individual utilities or telcos.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
Government Agencies or Portals
• ASIC’s MoneySmart• disasterassist.gov.au• Department of Social Services• Department of Human Service• Consumer Affairs Victoria• Australian Human Rights Commission
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
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www.moneysmart.gov.au
MoneySmart is the financial literacy website of the Australian Securities and Investments Commission. There is a page of information about financial counselling.
8 https://www.moneysmart.gov.au/managing-your-money/managing-debts/financial-counselling
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www.moneysmart.gov.au continued
The MoneySmart website also includes a video about financial counselling: “Tran sees a financial counsellor”
9 https://www.moneysmart.gov.au/managing-your-money/managing-debts/problems-paying-your-mortgage/keeping-your-mortgage-on-track#ask
10
www.disasterassist.gov.au
10 http://www.disasterassist.gov.au/FactSheets/Pages/Recoveringfromadisaster/Doyouneedadditionalfinancialsupport.aspx
Refers to financial counselling and
the 1800 007 007 number
Department of Social Services
11
DSS is the Federal Government Department administering the Commonwealth Financial Counselling Program.
http://www.dss.gov.au/our-responsibilities/communities-and-vulnerable-people/programs-services/commonwealth-financial-counselling-cfc
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Department of Human Services
12http://www.humanservices.gov.au/customer/enablers/child-support/support-services-for-separated-families
Refers to financial
counselling and the 1800
007 007 number
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Consumer Affairs Victoria
13
Suggests calling 1800 007 007
http://www.consumer.vic.gov.au/resources-and-education/scams/if-you-are-scammed
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Australian Human Rights Commission
14 http://www.humanrights.gov.au/publications/your-rights-retirement/4-your-right-support-making-financial-decisions
Free financial information services
includes information about
financial counselling and 1800 007 007
Government Regulators
• Australian Financial Security Authority• Australian Energy Regulator• Australian Communications Media Authority
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
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Australian Financial Security Authority
16
• AFSA is Australia’s personal insolvency regulator. One of the four messages rotating on the home page of the AFSA website promotes financial counselling.
https://www.afsa.gov.au/
AFSA ContinuedThere is more detail about financial counselling, including how to contact a financial counsellor, on a special page in the AFSA site.
https://www.afsa.gov.au/debtors/financial-counsellors
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Australian Energy Regulator: Energy Made Easy website
18 http://www.energymadeeasy.gov.au/frequently-asked-questions
The question is posed is: "I am having trouble paying my energy bills. What should I do?". The response refers users to financial counsellors.
“A financial counsellor may be
able to help …”
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Australian Communications Media Authority- "In addition to seeking assistance to manage your spending on telecommunications, you may also want to meet with a financial counsellor...."
19http://www.acma.gov.au/Citizen/Consumer-info/Rights-and-safeguards/Phone-contracts-and-charges/telecommunications-service-options-if-youre-experiencing-financial-hardship-fact-sheet
Banking Industry
As well as the banking industry referring clients to financial counsellors, financial counsellors of course interact directly with the banks. All of the major banks for example have set up dedicated phone lines for financial counsellors to talk to hardship teams about their clients. This assists in early resolution of issues.
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
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ANZ
21 http://www.anz.com.au/about-us/corporate-responsibility/microsite/financial-hardship/contact-us/
Contact a Financial Counsellor …(they)
will give you independent advice
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National Australia Bank
22 http://www.nab.com.au/personal/help-and-guidance/financial-hardship/what-happens-afteryousubmityourapplication
“We also recommend talking to a
financial counselllor”
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Commonwealth Bank
23https://www.commbank.com.au/about-us/who-we-are/customer-commitment/financial-hardship.html
Refers to financial counselling and the
1800 number
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Westpac
24 https://www.westpac.com.au/about-westpac/sustainability-and-community/sustainability-action/responsible-banking-investment/westpac-assist/
“You can obtain free independent
advice from a financial
counsellor.”
Industry Peak Bodies
• Australian Bankers Association• Insurance Council of Australia• Australian Retail Credit Association
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
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Australian Bankers Association: “Doing it Tough” website
26 http://www.doingittough.info/Financial-Hardship/Experiencing-financial-hardship---What-Can-My-Bank-Do-
“After speaking to your bank … you
may wish to seek advice … from (a) .. financial counsellor”
• The Code of Banking Practice also includes clauses that reference financial counselling.
• Clause 28.9 for example says that banks will recommend that customers considering early release of superannuation to repay a credit facility should seek independent advice from a financial counsellor.
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Insurance Council of Australia: Understand Insurance website
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Includes the Find a
Financial Counsellor
Map“A financial counsellor can help you work
out your options …”
http://understandinsurance.com.au/financial-hardship
The Insurance Code of Practice also refers to the national phone financial counselling helpline 1800 007 007
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Australian Retail Credit Association: creditsmartwww.creditsmart.org.au is the new website educating Australians about comprehensive credit reporting
28 http://creditsmart.org.au/how-manage-your-credit-effectively
“You can also speak to a
financial counsellor …”
Ombudsman Schemes
• Financial Ombudsman Service• Credit Ombudsman Service• Telecommunications Industry Ombudsman• Energy and Water Ombudsman Victoria• Energy and Water Ombudsman NSW
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
30
Financial Ombudsman Service
Under "consumers" > "helpful links“ Refers users to FCA's website and the 1800 007 007 number
http://www.fos.org.au/consumers/helpful-links/
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Credit Ombudsman ServiceUnder "publications" > "guides and brochures" > "Guide: financial hardship”. This document suggests consumers contact a financial counsellor in a number of places.
31http://www.cosl.com.au/cosl/assets/File/COSL%20-%20Financial%20Hardship%20Guide%202013%20(web).pdf
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Telecommunications Industry Ombudsman
32http://www.tio.com.au/consumers/useful-organisations
Information, support and advocacy to
people in financial difficulty
Energy and Water Ombudsman Victoria
33 http://www.ewov.com.au/publications-and-media/news-hot-topics/hot-topic-archive/what-to-do-if-you-cant-pay-your-bill
“You can search for a
financial counsellor …”
Energy and Water Ombudsman NSW
http://www.ewon.com.au/index.cfm/chill-your-power-bill/plan-for-the-bill/
“Find a financial
counsellor near you …”
Regulatory Requirements
• Mandatory Warning Statements under the Credit Code - small amount credit contracts
• Default notices under the Credit Code
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
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Mandatory Warning Statement re Payday Loans• Sections 28XXA and 28XXB of the National Consumer Credit Protection Regulations 2010
requires a warning statement “Do you really need a loan today?” to be given to all borrowers of small amount credit contracts (unsecured loans of less than $2,000 more commonly called payday loans. The notice must include information about financial counselling.
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“For information about other options …
ring 1800 007 007”
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Credit Law Default Notices• A number of the standard forms under the credit laws include information that a
financial counsellor may also help eg Form 11 direct debit default, form 12 etc.
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Many standard forms under the credit laws must
include information
about financial counselling.
Appendix 1
About Financial Counselling
Financial Counseling
Australia is the peak body for
financial counsellors in
Australia.
Financial counsellors:
providing information, support and advocacy to
people in financial difficulty .
Service Delivery
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National telephone line
Face-to-face
Self help website and tools
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What does a financial counsellor do?Financial counsellors help their clients obtain a clear picture of their overall financial situation and the options available to them. For example, assistance could include:
– assessing which debts are priorities, including whether the debts are legally owed and the amount owing is correct;
– understanding the other factors affecting the client’s situation• e.g. health, stability of employment, abuse, relationship status, housing situation;
– developing or refining a money plan• including looking for ways to increase the client’s income;
– explaining what options clients may have in relation to their debts, weighing up the pros and cons of each option;
– advocating or negotiating on behalf of the client, • e.g.to reduce, defer, or waive payments or help the client lodge a dispute with a
dispute resolution scheme;– providing information
• e.g., about rights under the National Credit Code to apply for a hardship variation, how the credit reporting system works or what is acceptable behaviour from debt collectors, the pros and cons of bankruptcy;
– identifying if the client needs ongoing support and referral to other services• e.g. legal services, housing services.
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About the Profession
• Financial counsellors require extensive knowledge in a range of areas, including credit laws, debt enforcement laws, the bankruptcy regime, industry hardship policies and concession frameworks. Financial counsellors also require communication and counselling skills.
• The qualification to be a financial counsellor is the Diploma of Community Services (Financial Counselling). This takes two years of full-time study or four years of part-time study.
• There are about 950 financial counsellors in Australia.
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Impact of Financial Counselling
• Cost Benefit Analysis – Adelaide University– A cost-benefit analysis of financial counselling services funded by the
Wyatt Trust in South Australia, has found that every $1 invested provides a $5 return for clients.
• Australian Workplace Innovation and Social Service Research Centre, Adelaide University, “Paying it Forward”, March 2014.
• Impact Analysis – Swinburne University – Approximately two-thirds of respondents said that their financial
difficulties were resolved as a result of seeing a financial counsellor. – More than half thought that the advice helped them to avoid
bankruptcy and almost three-quarters agreed that the advice helped them to avoid or curtail legal action.
– Three-quarters said they were better able to prioritise debt.• Brackertz, N. “I Wish I’d Known Sooner: The Impact of Financial
Counselling on Debt Resolution and Personal Wellbeing”, The Salvation Army and Swinburne University of Technology (Melbourne), October 2012.
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