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Brokers beware credit repair referrals

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Australian Broker | 01 May 2012, 05:00 AM Agree 0
A credit repairer has cautioned brokers against using the service for their clients, saying they could find themselves violating NCCP rules
  • Michael R | 01 May 2012, 10:30 AM Agree 0
    It all depends on the individual's circumstances. To withdraw this service is a knee jerk reaction. I had a client who failed to get credit because he was defaulted for not paying $1,200 at university 4 years earlier, which his last employer should have paid when they were a trainee working for them. But because my client left their employ, they refused to pay, the last payment. It took 3 weeks to pay the repair company, & the default. But in the end all was done, and the failure to pay was in no way a blemish on my client's ability to pay or character. To simply withdraw this type of service is ridiculous.
  • John C | 01 May 2012, 10:45 AM Agree 0
    I disagree with Graeme, in that there are so many instances of incorrectly recorded credit infringements listed on Veda and the other Credit Reference agencies, that this is not providing a true picture of the the clients credit position either. If a credit infringement is removed because a mistake has been made, then it should be removed, if there is no mistake than the infringement remains. This is nannystatism at its worst!
  • Alan | 01 May 2012, 11:02 AM Agree 0
    I agree, in the case of a default listed on the clients file where the issue is in dispute and this is resolved in the clients favour then this is not an indicator of poor credit worthiness of the client. i know of a particular client who had a dispute with Origin energy over an unpaid account after the client had moved on from a rental property, in the end origin just stopped corresponding with the client and defaulted them. the file of evience that this was a disputed amount was ober an inch thick but Origin just decided to default the client. this is not an indicator or a poor credit worthy client but an example of a utility provider who didnt want to accept that they were wrong.
  • Beatup | 01 May 2012, 11:06 AM Agree 0
    I agree with John C. The one thing missing from the article was the reference to credit issues that were listed IN ERROR. I totally agree that these are fair and reasonable and don't require disclosure. HOWEVER, these instances are the minority of cases.

    Michael R misses the point. A credit repair firm can repair the records for brokers however the broker has an obligation to make a true disclosure to the funder. All matters other than error listings should be disclosed.

    My suggestion for anyone who has doubt, have a chat to your funder or to the MFAA about the consequences of credit repair without disclosure to the funder.
  • HY Credit Repair | 01 May 2012, 11:33 AM Agree 0
    Spot on John C. We think Mr Reibelt has missed the point of credit repair - to repair errors, not mislead lenders.
  • Graham R | 01 May 2012, 11:53 AM Agree 0
    HY and others the solution is simple. Don't take my word for it have a chat to your lenders and the MFAA about your disclosure obligations.
  • Michael Mikhael, Principal, Visage Credit Solution | 01 May 2012, 12:41 PM Agree 0
    An annulment of a payment default, or a court judgment, means just that... Annulment!

    The removal of a payment default and/or court judgment also means just that, REMOVAL, which means (in simple english) it should not have been there in the first place!

    I think that Graeme should seek legal advice and stop talking nonsense.
  • john | 01 May 2012, 04:39 PM Agree 0
    This is a very delicate and difficult area for any broker to become involved and every circumstance and client is different -the terminolgy the product was not unsuitable needs to meet clients needs-is a very open statement.
  • Regional Broker | 01 May 2012, 04:41 PM Agree 0
    Me thinks Graham Reibelt has missed the point.....the credit repairer role is to get adverse credit reports that have been fixed and not adjusted on the individual files, because the lender is slow to report paid files.
  • Steve Toth | 02 May 2012, 05:43 AM Agree 0
    I feel the times of trusting that everything creditors report is accurate have been long over. Obviously not. When are we all going to admit that the credit system is broken all over the world and it needs a major overhaul. To do that of course we all would need to take personal responsibilty and accountability for first.
  • Ray C | 02 May 2012, 08:03 AM Agree 0
    Credit reports are only adjusted when an erroneous entry or Lodger has not followed procedure.Refer SMH page 3"Consumers win more power over credit data. Once again scare tactics by management that should know better.
  • Barry W | 02 May 2012, 01:23 PM Agree 0
    I have read the article and the comments and I agree with Graham. As he suggested all any of us have to do is take it up with our lenders and the MFAA. In reality credit reports are adjusted for a lot of reasons not just where there is an error and it's those non error instances that a broker has to be careful.

    Great discussion.
  • Miss Credit Repair | 03 May 2012, 10:35 AM Agree 0
    I have read the article and the NCCPA and I disagree with Graham. in the article Graham indicates that a broker must accurately assess a clients suitability for a loan product. However the NCCPA indicates that brokers must instead assess whether the loan is ‘not unsuitable’. When is it unsuitable? The loan arranged by a credit assistant may be unsuitable if (s. 118(2))
    ■■ The consumer could not repay the loan at all or only with substantial hardship
    ■■ The loan will not meet the consumer’s requirements and objectives
    What is substantial hardship? If the only way a consumer can afford to repay a loan is by selling their principal residence, then the consumer cannot afford the loan without substantial hardship unless the contrary is proved (ss.131(3) & 133(3) NCCP).
    In the article Graham indicates that to make a decision on one or a range of loan products, all known information about the clients true position and needs must be clearly identified.
    When talking about a clients ‘true position’, if a credit file is not accurate, up to date and complete as is required by the Privacy Act 18J (1), how can disclosing credit history prior to credit repair indicate a clients ‘true position’. Surely it is better to err on the side of caution and get the accuracy and completeness checked via credit repair so that a proper assessment of someone’s ‘true position’ can be gauged.
    It could be said that a broker recommending a loan without checking the accuracy of a person’s credit history i.e. entering them into a non-conforming loan on the basis of them having a default listing on their credit file, could not be adequately assessing whether a loan is ‘not unsuitable’ as these types of loans regularly have high upfront costs and higher interest charges which may put someone into a worse of position financially over time, especially if they experience circumstantial financial hardship 2 years into a loan contract.
  • Navjot Singh Credit Rating Doctors Pty Ltd | 05 May 2012, 03:32 PM Agree 0
    First of all Credit provider will only remove a default if and only if there was an error in listing. Errors can be made in number of ways such as amount was not overdue for more than 60 days, notices were not complied with legislation, notices had some misleading information such as "your name has been listed with Veda" when in fact it has not been listed.
    I think Graham has missed the main point of credit repair. Credit repair in available to remove only listings those should not have been made at first point. Graham we offer training for credit repair companies, should your staff need training please contact us

  • Michael Heckendorf | 26 Mar 2013, 05:37 PM Agree 0
    If a broker has known a potential customer for many years. The applicant once had a blemish on his credit file but with the passing of time the listing has disappeared. Should the broker let a bank know of something that doesn't appear on file yet is known to the broker?
  • Sam | 30 Jan 2014, 06:11 PM Agree 0
    This is funny because a lot of the credit repair companies do rip you off whilst reputable ones have a harder competition because of them. I know of a company called 'Credit Intelligence' who helped me exponentially with my adverse credit listings.

    Not all credit repair companies you need to watch out for, I went with a few beforehand and they said the default couldn't be removed, went with Credit Intelligence and within two months it was gone!

    So if anyone is going to refer, my advice is to refer to Credit Intelligence.

    That is all.
  • John C | 31 Jan 2014, 08:55 AM Agree 0
    The whole issue of Credit Reporting has become draconian legislation with new reporting requirements becoming into play from March 2014 onwards. Very soon no one will be able to get credit because of missing a payment by one or two days or a genuine dispute has emerged and the disputee blips the disputor's credit file even before the dispute has been able to be tabled between the parties. Just the previous Federal Governments Nannystatism at its worst. The quicker the current Federal Government repeals this legislation the better. In fact the issue of the Privacy Act and in particular Section 18f needs to be completely re-assessed and re-written. No wonder no one can get things done in this country, we are strangling ourselves. So does the Bankruptcy Act needs to be changed and brought back to its previous version so it is in line with other countries such as the UK and US. Whilst I love Australia it is getting to the point why would you want to live here if you can't do business here. I am aware of a new political party being formed to promote the interests of Small Business in Australia. The issues of Credit Legislation and the Privacy Act reforms is very high on their agenda and is in fact to be one of their platforms.
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