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Aussies facing credit blacklist could rise 'exponentially'

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Australian Broker | 12 Mar 2014, 08:15 AM Agree 0
The number of Aussie borrowers blacklisted by credit reporting bodies will increase exponentially after Friday, says a national finance company.
  • Aarong | 12 Mar 2014, 09:37 AM Agree 0
    Aren't we all glad we've copied the systems from failing economies when we had one of he best ones in the world? Than you very much Labour for once again instituting a policy that is going to damage the Australian public. Just like the NCCP, what problem is this solving? This is a cure when there was no disease. Now we get to see this dragged throughout he courts as previous privacy policies didn't mention the back dating of information. This obviously reeks of a retroactive law and although I'm not a lawyer, I'm pretty sure just about any of them could make the argument that this is a punitive law (that allowed for this) without the benefit of warning. Telling the public last month that your credit records for the past 2 years will now retroactively be uploaded doesn't count as fair disclosure. I'm sure the insurance companies love this. So what? Since when do we tread on Australians civil liberties just to make insurance companies happy? Despite most of their ideas being bad for business to begin with, Labour showed a real ineptitude and juvenile approach to implementing their own regulation happy/anti-business bad policies. Thanks for nothing.
  • Mander | 12 Mar 2014, 10:12 AM Agree 0
    Australia has until now been one of the few advanced economies without a positive reporting regime. Personally I believe that borrowers with a good credit history will benefit and those with an adverse credit history will not - what could be fairer than that?
    There is no such thing as a "blacklist". The Veda report simply contains information. Each lender makes its own decisions on adverse credit according to their own risk appetite. Plenty of lenders will approve a borrower with missed payments or adverse credit.
    As far as Aarong's objections are concerned, how can they say that this law is punitive and that the public has not had fair warning? It has been publicised for months/years in the press and on TV.
    In fact, borrowers with a good credit history will benefit with faster approvals and possibly lower pricing over time. Not only that, lenders are better able to determine whether a borrower is overcommitting themselves because details of current credit contracts will be available.
  • Bottom Line | 12 Mar 2014, 10:39 AM Agree 0
    As the Privacy advocates group voiced yesterday - there is nothing good in this for the consumer.
    within 12 months banks will start with individual pricing for those who may have now get recorded for being 5 days late.
    It will be called 'pricing for risk'; and the mechanics of how they will adopt it, have already been discussed.
  • Aarong | 12 Mar 2014, 11:02 AM Agree 0
    Yes, we are one of the last western countries to adopt this and we are doing better than the rest. Again, where is the logic in conforming to policies adopted by failing economies. They should be copying us, not the other way around. This is simple economics and not a popularity contest with the other members of the failed G20. Bottom Line is correct. There is nothing in it for the consumer. Negative reports (calling them positive doesn't change what they are) will, in fact, lead to higher interest rates and slower/fewer approvals. Not better prices and faster/more approvals. The public awareness of this coming is appalling and I have not seen reports on this for years. A couple of 'Today Tonight' and 'Current Affairs' type stories in the last month or so is the complete introduction to the public. There was no public debate or discussion on this and it has never been mentioned in any public policy debates by any politicians to any real degree other than the former government telling consumers they are going to help them by regulating them into the ground. Brokers who think this is great are cheering handcuffs being put on them.
  • Broker | 12 Mar 2014, 12:00 PM Agree 0
    The only winner here will be the banks, good payers will get the same if they’re lucky, and late payers will be penalised . Got to get that 10% year on year growth from somewhere , and anywhere will do...
  • Mander | 12 Mar 2014, 01:43 PM Agree 0
    Aarong - stop playing politics with this. On balance this is good for consumers and has had the support of all parties at State and Federal level.
    People will find it harder to overcommit as their liabilities and the payments associated with them will be available to the lender. Consumers who have a good track record have nothing to fear and may even benefit. Consumers with a bad record will, as Bottom Line has said above - probably pay more. But hey that happens now with non-conforming lending and that has not stopped people from getting loans. I personally have no problem with a good payer getting a lower rate than a bad payer.
    Consumers, responsible brokers and lenders have had literally years to provide their input on this legislation -
    I wonder why you are so concerned about it now?

  • Papery | 12 Mar 2014, 03:11 PM Agree 0
    Agree..... One more policy to support reasons to decline & charge ahigher IR
  • Lance | 12 Mar 2014, 04:50 PM Agree 0
    What a way for the big banks to gouge on interest rates they wont have to publicly declare interest rate rises they will just give smaller discounts if you have one bad mark like paying a bill a few days late. Once again the battler is a victim of the big banks greed
  • Aarong | 13 Mar 2014, 09:00 AM Agree 0
    Hi Mander, I realise that a certain segment of the population always pays their bills on time and this won't affect them. I also realise the another large section of the population doesn't always pay their bills on time, but have managed well enough so they haven't had any registered defaults. They are the ones who will be hurt by this, plain and simple. This is inarguable. Whether we now discuss whether they somehow 'deserve' this is also moot from my business standpoint. There will be fewer deals approved and there will be consumers paying higher rates as a result of this full stop. My original point is what is the problem we are fixing? If our economy was the only one in the G20 that didn't go into recession, why did Labour overhaul huge parts of it to resemble the other 19 failed economies? Is questioning this absurdity really paying politics? I would have asked this question of any government that allowed/encouraged this. By the way, I missed that consultation part. There was zero consultation and our industry was not asked for its nod on this. This was dictated to us and we were all simply informed that this was coming. There might not be much point in lamenting this now, but I suppose I always want the blame laid where it belongs.
  • Notquitetheoptimist | 13 Mar 2014, 03:02 PM Agree 0
    I'd love to have Mander's optimism with regard to good credit holders getting a "better" deal. I doubt it. There's only worse deals for the consumer coming.
  • Dave Robinson | 14 Mar 2014, 10:07 AM Agree 0
    Do any of you work in the finance industry? If so I am surprised. You are all so pessimistic if I felt that way I would be long gone. Only time will tell if this is good or bad but in the short term it will be chaos. Do you understand that it is up to each individual lender/supplier to pick how much or how little information they will pass on? If they all decide to stay with what we have at the moment nothing will change. The legislation does not make any changes, the lenders have the control, the legislation merely allows them to supply more information if the wish. Lets wait and see what the lenders decide before having a debate over something that has not even happened.
  • Coast Broker | 14 Mar 2014, 11:42 AM Agree 0
    I may be showing my age however before the Privacy act there was such a thing as a Bankers Opinion where one Bank would contact another to obtain an abbreviated history of the customer conduct. May this is just the Privacy Act catching up.
  • Aarong | 14 Mar 2014, 11:51 AM Agree 0
    Yes Dave I've been a broker for quite a number of years and I don't share your optimism. I guess you would chalk this negative attitude of mine up to experience, but that's OK, I'm not here in lending to feel good, I'm here for the money. Are you saying that lenders will see bad conduct and then they might ignore it, lets wait and see? The court will decide if the bank did its due diligence on whether a client should have gotten the finance to begin with or not. Its not what the lenders think, its what the lenders think the courts will think. We won't know what the courts think until people start suing for getting loans when they shouldn't have based on information from the positive reporting. Very few lenders will want to stick their necks out. Its a slow motion train wreck that was totally unnecessary. If this hasn't badly affected the lending industry, in 6 months you can remind me of my comments and I'll admit I was wrong. Again and again I ask though..... What disease is this a cure for? Where is the problem that introducing this solves? Why would governments relentlessly tinker with the best running economy in the G20?
  • Adelaide broker | 15 Mar 2014, 08:45 AM Agree 0
    One thing astounds me is why would any bank or lending institution share their clients information with the market and expose their clients good history to competitors. You can guarantee those clients will be getting offers regarding refinancing home loans, personal loans and cards from all majors. This is another waste of time like that ridiculous NCCP changes that were made a few years back.
  • John C | 17 Mar 2014, 09:49 AM Agree 0
    The new credit reporting regime is in my opinion a retrograde step back-wards. In fact the whole business of the Privacy Act in particular section 18f of the Act needs to be thrown out and completely revamped and brought into the modern age. The current legislation including the revised APP's brought in earlier this month does nothing for the Credit Reporting Industry. The current revised legislation is still draconian (even more so now) and will not provide long term benefits. This revised legislation was additional nannystatism brought in by the former Gillard Government and the quicker the current Government winds this back the better the industry will be. In fact Alan Jones interviewed the Attorney General last week and called him to account over this legislation to which the Attorney General claimed he was not aware of the possible impact. Alan Jones has invited the Attorney General back later this week to provide an update as to what the current Government is going to do to amend this most god awful piece of legislation. This legislation and the previous is a throwback to the sixty's and the world and Australian economies and the way we do business has moved on considerably since then leaving this legislation antiquated, non-productive and damaging to small business. No wonder businesses are leaving Australia in droves. Wake up Australia before its too late!!
  • Henry | 19 Mar 2014, 10:44 AM Agree 0
    My power supplier placed my bill inside the meter box on a vacant block of land 200 miles away, even though they have my home address, telephone number and email.

    I installed the meter box for suture use in building at a cost of $1,800

    Who looks inside their meter box for a bill on the vacant block of land 200 miles away?

    Apparently they charge $1 a day trickle fee (news to me) for electricity I do not use.

    When I went down to the vacant block I opened the meter box and to my surprise found the bill inside, and my electricity supply disconnected

    I have never been late with any of my thousands of bills over a 50 years yet here i am placed on a 'blacklist' by power providers who stuffed up the mailing address.

    When I complained they charged me a disconnection fee and re-charged me a connection fee.

    I think the CEO for the providers should be jailed for alleged fraudulent activity and fined $1,000,000.

    I think this credit 'blacklist' may be used wrongfully and innocent people appear to have no right to challenge.
  • mac | 19 Mar 2014, 11:26 AM Agree 0
    @ Henry. If they didn't follow the correct procedures you can employ a lawyer / credit repair firm to try and have the default removed. Sounds like a classic case to me. Or if you don't need to borrow money for 5 years pay it and then it will be gone in 5 years.
  • John C | 19 Mar 2014, 12:04 PM Agree 0
    Adelaide Broker, another Gillard Nannystatism piece of legislation. In one respect, the only positive benefit that I agree with the NCCP was that it levelled the playing field to make the Act uniform nationally. The rest of it needs to be binned and discretion given back to the lenders without interference from Government.
  • John C | 19 Mar 2014, 03:24 PM Agree 0
    Mac/Henry,

    Henry given the circumstances I would put your grievance in writing to the CEO of the Energy Company explaining the circumstances. Make sure you emphasis the damage this "error" is causing you and let them know you will pay the full outstanding amount on the basis that the credit infringement is expunged. If they will not, then the process under the new APP legislation is onerous where you then have to find out who their credit dispute resolution organisation is to submit a complaint to them, and failing them then a complaint the Privacy Commissioner who can elect NOT to review your case if he is satisfied with the Dispute Resolution's Scheme's decision (another piece of Gillard B/S Nannystatism crap). If this is the outcome, bugger paying them. Why would you because you will still be questioned/denied credit even with a paid default? There is NO incentive in paying the debt because there will be NO future benefit due to the damage the listing will be causing. This is where Section 18f of the Privacy Act is being completely misinterpreted due to badly worded framing of this Section of legislation. My interpretation is that, soon as an alleged debt is paid, that any credit infringements should be immediately removed, NOT held on the file for a maximum period of five years which is what Veda and D&B elect to do AT THEIR DISCRETION, which in my view contravenes the Act.

    Anyway let us know how you go with writing to the CEO, he/she may see sense and instruct their Credit Department to remove the Infringement. It has happened in the past if the right approach is taken.
    Cheers, John C
  • Ty | 17 Jun 2014, 10:14 PM Agree 0
    Could anyone tell me how to go about blacklisting someone with an account overdue for more than 6 months, and how much would it cost?
    Cheers for the help
  • John C | 18 Jun 2014, 01:57 PM Agree 0
    Ty,

    That is not the point of a Credit File to black-list someone when they have not been given the right of reply. If you have a dispute with someone or a company and genuinely believe that monies are owed, then your right of recourse is through the courts. This will depend upon how much the alleged debt is for. No one has the right to "punish" either an individual or a company over an alleged debt, only a Court of Law does. Even a Credit Infringement listed on a Person's or Company File with a CRA is an allegation until proven in a Court of Law. This is where the Privacy Act in my view becomes contradictory because no one has the right to publish an allegation which causes damages. Only a Court of Law can issue a judgement, which at that point the allegation becomes truth! The last time I looked nowhere can I find that alleged creditors have the right to impose a Court Penalty and damage reputations on hearsay.

    If the party has failed to respond to your Letter of Demand, then your next step is to attend your Local Court and raise a Statement of Claim and serve it on the other party so the Court can adjudicate. As I do not know where you are, each State have their different requirements. In NSW it may even fall under the NCAP (the old CTTT). If you are not sure, contact your solicitor for assistance in this area and get some proper legal advice before undertaking a course of action which could get you into more strife than Speed Gordon!
  • Ty | 18 Jun 2014, 09:41 PM Agree 0
    Cheers for that.
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