Financial hardship continues to yield a flood of complaints to COSL, and the Ombudsman has said the trend shows no signs of slowing.
The Credit Ombudsman Service has released its annual report for 2011, noting a whopping 72% increase in complaints from 2010. A major factor in this, Ombudsman Raj Venga said, is financial hardship and lenders’ unwillingness to vary payment terms.
“Regrettably, 34% of all complaints we receive relate in some way to financial hardship, specifically the failure of a lender to agree to a payment variation on grounds of financial hardship. This level of financial hardship complaints is similar to previous years and we do not anticipate a reduction in the foreseeable future,” Venga said.
Venga pointed out that 72% of hardship cases occurred where a borrower had already been served a default notice. He again took aim at some lenders for issuing defaults too quickly.
“We achieved a satisfactory outcome for the consumer in 46% of the financial hardship cases we closed. This suggests that not all lenders are, before issuing default notices or commencing enforcement action, properly considering the possibility that the borrower may be in financial hardship and whether a change in the borrower’s payment obligations may be appropriate in the circumstances,” Venga said.
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