The Credit Ombudsman Service Ltd (COSL) has issued a reminder to its mortgage manager and non-bank lender members to be wary of the devastation caused by the recent floods when considering cases of financial hardship.
Credit Ombudsman, Raj Venga, says lenders and mortgage managers have previously responded sympathetically to borrowers who have experienced financial stress as a result of natural disasters and hopes they will continue to do so.
“We expect they will again show the same compassion to affected borrowers in Queensland and northern New South Wales, and take into account COSL's Position Statement on financial hardship. We also urge borrowers who may be experiencing financial difficulties as a result of the flooding to contact their lenders or mortgage managers as soon as possible to discuss payment variation options available to them.”
But the Australian Bankers’ Association (ABA) says banks are already offering a range of emergency relief packages to assist people affected by the severe weather in Queensland and New South Wales.
Steven Münchenberg, chief executive of the ABA, says banks understand this is a difficult and stressful time for households and businesses affected by the severe weather – and says it’s not a time when people want to be worrying about their finances.
“The banks’ emergency packages provide practical help by giving immediate financial relief to those in most need of assistance. If someone’s home, income or business has been affected by the floods or storms, they should contact their bank as soon as they are able to. Banks are providing support to help their customers get back on their feet.”
Banks offer a range of support options and the assistance provided will depend on their individual circumstances and needs, but may include:
deferring home loan repayments;
restructuring business loans without incurring fees;
giving credit card holders an emergency credit limit increase;
providing payment holidays on personal loans or credit cards;
refinancing loans at a discounted fixed rate;
waiving interest rate penalties if term deposits are drawn early; and
deferring repayments on equipment finance facilities.
“If you are worried about the financial effect of the flooding and storms, talk to your bank about the support that is available. It is often not well understood that banks do offer their customers assistance during these difficult times and go beyond what might be legally required to offer immediate financial relief and support to affected customers and their communities. If you know someone affected, let them know that banks are offering emergency packages.”
The ABA says banks also continue to offer support to people affected by bushfires in Tasmania, Victoria, New South Wales and elsewhere.
“The best way to contact your bank is to speak to your relationship manager or call the bank’s dedicated emergency relief or financial hardship support number. These numbers can be found on the ABA website www.bankers.asn.au or at www.doingittough.info along with additional information to assist people that might be experiencing financial difficulty. You can also speak to a free, independent financial counsellor by calling 1800 007 007.”