Letter from Fiona 24 March

Written on the 24 March 2021 by Fiona Guthrie

Dear financial counsellors, 

For a long, long time now, we've been really worried that we don't give the sector enough information about what we've been doing and also ask for your views or input. And that is the purpose of this letter.

So for the next few weeks, I'm going to trial writing a weekly update that summarises "the week that was", so our sector gets an idea of who we've met within FCA and what has been happening. Welcome to the first edition for the week Monday 8th March Friday 12th March. If it seems useful, then I'll keep doing it.
Here's what's happened over the last few weeks (I'm catching up here, so there's a long list sorry about that. Usually I'll get this to you very soon after the week's end, but for this first one, I had to sort out some logistics.)

International Women's Day I was part of a couple of panel discussions around International Women's Day. One was for finder.com. The Finder report "From Pay Gap to Parity" was really interesting. Some things are not surprising but are concerning, for example, women have lower savings and super and are more likely to be in debt. Their survey found though that women are more responsible with money and more credit savvy.

I was also part of a panel discussion with the staff at Choice, where I've had the privilege of being on the board for the past few years. Choice has been a wonderful ally for us in the responsible lending campaign and we work with them closely on lots of policy areas.

Some key meetings

  • We met with the Water Services Association of Australia to discuss the Sylvan Review. They are very supportive.
  • We talked to ASIC about the insolvency industry as part of trying to understand the small business landscape and how small business financial counsellors could make good referrals. This is a tricky area.
  • Together with Financial Rights Legal Centre, we held a zoom meeting with the Shadow Attorney-General Mark Dreyfus. We talked about our recent joint submission on proposed changes to the bankruptcy laws (reducing the time period to 12 months), problems with Buy Now, Pay Later companies and the wind back of responsible lending laws. (A number of financial counsellors participated in a zoom meeting to provide input to the submission.)
  • I'm part of a small advisory group called the Funeral Benefit Trust Advisory Council. This group is providing advice to the Trust about a funeral savings product that could be a much better option, particularly for First Nations people. Some of you will have been involved in the product development which was led by Social Ventures Australia. It's early days, but the idea is a really good one.
  • FCA and SAFCA met with an advisor to Senator Griff about responsible lending. We had a good hearing, but they play their cards close to their chest.
  • We met with Toyota Finance to discuss their approach to hardship and family violence. This meeting was organised by the Economic Abuse Reference Group and includes a financial counsellor. Good progress made and we'll follow up again.
  • FCA is part of the Westpac Customer Council. The most recent meeting included the CEO and covered a number of matters, including how they were responding to the end of loan deferrals (many people are getting back on track). Westpac recently organised for a small group of small business financial counsellors to provide some feedback about potential hardship scenarios. Westpac is the second bank to do something practical about blocking abusive messages in payment transactions.
  • FCA (me), Consumer Action (Gerard Brody) and Financial Rights (Karen Cox) have also been meeting regularly with ANZ during the pandemic. We discussed loan deferrals, gambling, responsible lending, the licensing of debt management firms and the forthcoming review of the Banking Code of Practice (yes, it does seem to come around quickly).
  • Insurance company IAG has a CEO roundtable that we are part of. We've been working on some common ground advocacy projects, for example, standardisation of policy terms. Underinsurance is a perennial issue having better "sum insured" calculators would help and this was discussed. We also talked about price differences between people taking out new policies and those renewing.
  • One of the key meetings I had was in Sydney on 5th March with various industry groups that may be involved in industry funding for financial counselling. Much to my surprise the payday lenders and consumer lease providers were positive and can see the benefits.
  • FCA has recently joined the Financial Services Council consumer consultative group. The FSC represents life insurers and retail super funds and we had feedback from the sector that they wanted us to be involved. It was a great opportunity to raise an issue we have been working on for about a year that affects a lot of First Nations people. This is that when someone dies without a will, it can be really hard to find out if there was any super. The ATO holds this information but won't tell you unless there's a will or letters of administration. Of course, lots of First Nations people don't have this. It means that super is being lost. Anyway, the FSC understand and should try and help in lobbying of government (it needs a change to the law to fix it).
  • Zack Wildy in FCA had a constructive meeting with Equifax about trying to make it easier for prisoners to access credit reports. This included some financial counsellors. Zack is doing a lot of work with industry and government to improve the way they work with financial counsellors. He's making some progress with Centrelink, but it's early days. We're also trying to do more with the Buy Now, Pay Later industry.

Gambling
There also seems as if there may be some movement in the way banks respond to credit cards being used for gambling which is positive and something that Lauren here in FCA has been working on now for a while (see this ABC article). ANZ is about to introduce the ability for customers to self-exclude from spending money on gambling, which is good news. We'll provide more information once we know the details.

A final word

If you've read this far thanks. I'll be shorter next week.

Feedback or questions ring, text or email: 0402 426 835 or fiona.guthrie@financialcounsellingaustralia.org.au

Fiona


Author:Fiona Guthrie

SAFCA

Suite 7 Wellington Centre, 2 Portrush Rd.
Payneham SA 5070