Consumer Credit Legal Service (WA) Inc. Looking Beyond the Legislation: rules and guidelines representing good industry practice

Who we are Mitchell Coles Shannon Hadley Roberta Grealish Solicitor Volunteer Paralegal

This presentation is for information purposes only. Disclaimer This presentation is for information purposes only. It is not legal advice. If you require legal advice please contact our telephone advice line on (08) 9221 7066.

The road ahead National Credit Code ePayments Code of Conduct Debt Collection Guidelines Code of Banking Practice Family/Domestic Violence

National Credit Code The National Credit Code applies to the provision of credit to consumers, but this is not the end of the story.

ePayments Code The ePayments Code of Conduct regulates consumer’s electronic payment transactions: ATM; EFTPOS and credit card transactions; Online payments; Internet and mobile banking; and BPAY. It is a voluntary code of practice.

ePayments Code The Code: Requires subscribers to provide terms and conditions, receipts and statements; Sets out the rules for determining who pays for unauthorised transactions; and, Establishes a regime for recovering mistaken internet payments. A copy of the Code can be found on the ASIC website.

Case Study James maintains several accounts with a large bank. He often uses their internet banking service to make payments and maintain his accounts. James has noticed that several suspicious transactions have been made to his account. These have been used to make purchases overseas. Unsure of whether he is liable for these amounts, James calls CCLSWA for advice

Case Study Under the Code, James is not responsible for any loss arising from an unauthorised transaction if he did not contribute to the loss. James that must report the unauthorised transaction as soon as he becomes aware of it. Discussion points When a consumer should be aware of loss Transaction and daily account limits Contribution to loss? Sharing PIN or passwords Sharing of account number / expiry date Lost / stolen cards

Debt Collection Guidelines

Debt Collection Guidelines The Guidelines are aimed at helping collectors and creditors understand the Commonwealth consumer protection laws. They provide guidance on: Appropriate conduct for debt collectors; and, Remedies against debt collectors who engage in misleading or deceptive conduct, unconscionable conduct, and undue harassment. Options for non-NCC debts

Case Study Suzie has been experiencing financial hardship and has a large debt. This debt was assigned to a debt collector. Suzie has received several phone calls seeking repayment. They have refused to negotiate a payment plan, and have threatened to commence legal proceedings if she does not pay in full. Suzie calls CCLSWA for advice.

Case Study CCLSWA advised Suzie that a debt collector must not: Threaten legal action if the start of proceedings is not possible, or not under consideration. Pressure a debtor to pay in full, or in unreasonably large instalments. Suzie was advised to make a complaint about the debt collector’s conduct. Discussion Points If Suzie dispute liability for the debt Statute-barred debts Privacy

Code of Banking Practice

Code of Banking Practice The Code of Banking Practice outlines how a bank should conduct itself in its dealings with customers. It is a voluntary code of conduct. If adopted, it becomes a binding agreement between the customer and the bank. A list of subscribers is available on the Code Compliance Monitoring Committee website.

Code of Banking Practice “… if an FSP has adopted the Code, all contracts between the FSP and its consumers include the FSP’s commitment to comply with the Code. We consider that if an FSP adopts the Code but does not comply with it, then the FSP has breached its contract with the consumer.” “Codes of practice set standards of good industry practice for financial services providers…”

Case Study Mary is a 70-year old woman. Mary’s son, Daniel, wants to purchase a home. However, the bank is unwilling to lend to him. Mary wishes to help Daniel secure a loan, and is willing to be a guarantor. The bank has suggested that Mary become a co-borrower. Mary is unsure of whether she should become a co-borrower, and has called CCLSWA for advice.

Case Study Mary was advised that the bank breached the Code of Banking Practice by suggesting that she become a co-borrower. Under section 29 of the Code, a bank must not accept Mary as a co- debtor under a credit facility where it is clear that she will not receive a benefit under the facility. Discussion Points Non-signatories to the code Customer owed banks and building societies Interaction with Debt Collection Guidelines

Family/Domestic Violence For customers experiencing family or domestic violence, FOS expects FSPs to: Understand that they are likely to be experiencing considerable stress; Be willing to work with their customers individually; Be flexible in their approach; Be mindful of any access or safety concerns.

Family/Domestic Violence CIO recognises that consumers who are victims of family/domestic violence: Require safety of information and confidentiality May not have a permanent address, email or internet. May have issues with housing, employment and other legal issues

Family/Domestic Violence Jennifer is a co-borrower on a home loan with her ex-husband, David. Jennifer separated from David due to continuing domestic violence. She has had to leave the home, is unemployed and cannot afford the repayments. Jennifer wants to sell the home but David will not cooperate. She has tried to negotiate with the bank but has been unsuccessful. Jennifer wants to sever her liability for this debt and calls CCLSWA for advice.

Family/Domestic Violence Jennifer was advised that as a co-borrower, she is jointly and severally liable for the debt. FSP’s are expected to be flexible in their approach to consumers who have experienced family violence. CCLSWA advised that she contact her bank and set out her issues, including that she is a victim of family violence, and negotiate an suitable agreement. If Jennifer’s bank do not act reasonably in relation to Jennifer’s situation we would refer her to the bank’s EDR scheme.

Please do not provide this number to clients directly. Questions If you require advice in relation to your client’s situation you can call CCLSWA and speak directly to a solicitor. (08) 6336 7020 Please do not provide this number to clients directly.