REFERRAL AUDIT

1. REFERRAL AUDIT Click Here: Who is Referring to Financial Counselling Services? March 2014 Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial Counselling Australia is the peak body for financial counsellors in Australia.

2. About this Document • This document has information about a number of organisations that refer to financial counselling and/or encourage Australians in financial difficulty to contact a financial counsellor. • The audit included government agencies, government regulators, financial institutions, industry peak bodies, external dispute resolution schemes and information about financial counselling that is required to be included by the credit laws. • The document focuses on the most common referral sources. • There are other government or industry organisations that refer to financial counselling that have not been included. • The audit did not include individual utilities or telcos. Acknowledgement: FCA thanks Alex Purcell, a law student volunteering for FCA, who undertook the original desktop research that formed the basis for this paper. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

3. Findings Numbers of organisations encouraging referrals to financial counsellors • Six large government agencies • egMoneySmart, the financial literacy website of the Australian Securities and Investments Commission. ASIC is Australia’s lead agency for financial literacy. • Three government regulators • eg Australian Financial Security Authority (AFSA). AFSA regulates personal insolvencies. • All four major banks • The dedicated consumer focused websites of the key industry bodies in financial services • Australian Bankers Association, Insurance Council of Australia and Australian Retail Credit Association • Major Ombudsman Schemes - for financial service providers, telcos and utilities Financial counsellors: providing information, support and advocacy to people in financial difficulty .

4. Findings continued Referral Content • The most common referral content was to FCA’s website and the national phone financial counselling number – 1800 007 007. • Only one organisation included the “Find a Financial Counsellor Map” (www.understandinsurance.com.au) • Very few organisations included information about www.debtselfhelp.org.au, the website FCA set up specifically with information for people in financial difficulty Prominence • The prominence of the referral information varied, reflecting the target group for each website. • eg information on the AFSA website, which regulates bankruptcy, is very prominent A two way street • The referral process is a two way street. Financial counsellors interact with a number of organisations included in the audit. • Example: financial counsellors may lodge complaints with ASIC or the ACCC about practices which have breached the law • Example: financial counsellors sometimes refer clients to the MoneySmart website or the ABA “Doing it Tough” website Financial counsellors: providing information, support and advocacy to people in financial difficulty .

5. Conclusion • Numerous organisations, both in the private and public sector, encourage Australians in financial difficulty to contact a financial counsellor. • These organisations are generally the largest or most significant in the area of financial services (the audit did not include individual telcos or utilities) • The audit demonstrates that financial counselling is an integral component of the service delivery framework for Australians in financial difficulty. • FCA will suggest changes to the referral information on the sites of some organisations, to include reference to the www.debtselfhelp.org.au website • This site was set up by FCA to assist people in financial difficulty. It includes over 50 fact sheets, a self help tool and letter templates. This will be more useful than the FCA corporate website. Appendix 1 has more information about financial counselling. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

6. Overall Snapshot Industry Peak Bodies Australian Bankers Association – www.doingittough.info Insurance Council of Australia – www.understandinsurance.com.au Australian Retail Credit Association – www.creditsmart.org.au Ombudsman Schemes Financial Ombudsman Service Credit Ombudsman Service Telecommunications Industry Ombudsman Energy and Water Ombudsman Victoria Energy and Water Ombudsman NSW Regulatory Requirements Warning statements and prescribed forms under the Credit Law refer to financial counselling Government Agencies • MoneySmart (ASIC) • www.disasterassist.gov.au • Dept of Social Services • Dept of Human Services • Consumer Affairs Victoria • Australian Human Rights Commission Government Regulators • Australian Financial Security Authority • Australian Energy Regulator • Australian Communications Media Authority Industry • ANZ, Comm Bank, NAB and Westpac Financial counsellors: providing information, support and advocacy to people in financial difficulty . The audit did not include individual utilities or telcos.

7. Government Agencies or Portals ASIC’s MoneySmart disasterassist.gov.au Department of Social Services Department of Human Service Consumer Affairs Victoria Australian Human Rights Commission Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

8. www.moneysmart.gov.au MoneySmart is the financial literacy website of the Australian Securities and Investments Commission. There is a page of information about financial counselling. https://www.moneysmart.gov.au/managing-your-money/managing-debts/financial-counselling

9. www.moneysmart.gov.aucontinued The MoneySmart website also includes a video about financial counselling: “Tran sees a financial counsellor” https://www.moneysmart.gov.au/managing-your-money/managing-debts/problems-paying-your-mortgage/keeping-your-mortgage-on-track#ask

10. www.disasterassist.gov.au Refers to financial counselling and the 1800 007 007 number http://www.disasterassist.gov.au/FactSheets/Pages/Recoveringfromadisaster/Doyouneedadditionalfinancialsupport.aspx

11. Department of Social Services DSS is the Federal Government Department administering the Commonwealth Financial Counselling Program. http://www.dss.gov.au/our-responsibilities/communities-and-vulnerable-people/programs-services/commonwealth-financial-counselling-cfc

12. Department of Human Services Refers to financial counselling and the 1800 007 007 number http://www.humanservices.gov.au/customer/enablers/child-support/support-services-for-separated-families

13. Consumer Affairs Victoria Suggests calling 1800 007 007 http://www.consumer.vic.gov.au/resources-and-education/scams/if-you-are-scammed

14. Australian Human Rights Commission Free financial information services includes information about financial counselling and 1800 007 007 http://www.humanrights.gov.au/publications/your-rights-retirement/4-your-right-support-making-financial-decisions

15. Government Regulators Australian Financial Security Authority Australian Energy Regulator Australian Communications Media Authority Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

16. Australian Financial Security Authority • AFSA is Australia’s personal insolvency regulator. One of the four messages rotating on the home page of the AFSA website promotes financial counselling. https://www.afsa.gov.au/

17. AFSA Continued There is more detail about financial counselling, including how to contact a financial counsellor, on a special page in the AFSA site. https://www.afsa.gov.au/debtors/financial-counsellors

18. Australian Energy Regulator: Energy Made Easy website The question is posed is: "I am having trouble paying my energy bills. What should I do?". The response refers users to financial counsellors. “A financial counsellor may be able to help …” http://www.energymadeeasy.gov.au/frequently-asked-questions

19. Australian Communications Media Authority - "In addition to seeking assistance to manage your spending on telecommunications, you may also want to meet with a financial counsellor...." http://www.acma.gov.au/Citizen/Consumer-info/Rights-and-safeguards/Phone-contracts-and-charges/telecommunications-service-options-if-youre-experiencing-financial-hardship-fact-sheet

20. Banking Industry As well as the banking industry referring clients to financial counsellors, financial counsellors of course interact directly with the banks. All of the major banks for example have set up dedicated phone lines for financial counsellors to talk to hardship teams about their clients. This assists in early resolution of issues. Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

21. ANZ Contact a Financial Counsellor …(they) will give you independent advice http://www.anz.com.au/about-us/corporate-responsibility/microsite/financial-hardship/contact-us/

22. National Australia Bank “We also recommend talking to a financial counselllor” http://www.nab.com.au/personal/help-and-guidance/financial-hardship/what-happens-afteryousubmityourapplication

23. Commonwealth Bank Refers to financial counselling and the 1800 number https://www.commbank.com.au/about-us/who-we-are/customer-commitment/financial-hardship.html

24. Westpac “You can obtain free independent advice from a financial counsellor.” https://www.westpac.com.au/about-westpac/sustainability-and-community/sustainability-action/responsible-banking-investment/westpac-assist/

25. Industry Peak Bodies Australian Bankers Association Insurance Council of Australia Australian Retail Credit Association Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

26. Australian Bankers Association: “Doing it Tough” website • The Code of Banking Practice also includes clauses that reference financial counselling. • Clause 28.9 for example says that banks will recommend that customers considering early release of superannuation to repay a credit facility should seek independent advice from a financial counsellor. “After speaking to your bank … you may wish to seek advice … from (a) .. financial counsellor” http://www.doingittough.info/Financial-Hardship/Experiencing-financial-hardship---What-Can-My-Bank-Do-

27. Insurance Council of Australia: Understand Insurance website The Insurance Code of Practice also refers to the national phone financial counselling helpline 1800 007 007 Includes the Find a Financial Counsellor Map “A financial counsellor can help you work out your options …” http://understandinsurance.com.au/financial-hardship

28. Australian Retail Credit Association: creditsmart www.creditsmart.org.au is the new website educating Australians about comprehensive credit reporting “You can also speak to a financial counsellor …” http://creditsmart.org.au/how-manage-your-credit-effectively

29. Ombudsman Schemes Financial Ombudsman Service Credit Ombudsman Service Telecommunications Industry Ombudsman Energy and Water Ombudsman Victoria Energy and Water Ombudsman NSW Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

30. Financial Ombudsman Service Under "consumers" > "helpful links“ Refers users to FCA's website and the 1800 007 007 number http://www.fos.org.au/consumers/helpful-links/

31. Credit Ombudsman Service Under "publications" > "guides and brochures" > "Guide: financial hardship”. This document suggests consumers contact a financial counsellor in a number of places. http://www.cosl.com.au/cosl/assets/File/COSL%20-%20Financial%20Hardship%20Guide%202013%20(web).pdf

32. Telecommunications Industry Ombudsman Information, support and advocacy to people in financial difficulty http://www.tio.com.au/consumers/useful-organisations

33. Energy and Water Ombudsman Victoria “You can search for a financial counsellor …” http://www.ewov.com.au/publications-and-media/news-hot-topics/hot-topic-archive/what-to-do-if-you-cant-pay-your-bill

34. Energy and Water Ombudsman NSW “Find a financial counsellor near you …” http://www.ewon.com.au/index.cfm/chill-your-power-bill/plan-for-the-bill/

35. Regulatory Requirements Mandatory Warning Statements under the Credit Code - small amount credit contracts Default notices under the Credit Code Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

36. Mandatory Warning Statement re Payday Loans • Sections 28XXA and 28XXB of the National Consumer Credit Protection Regulations 2010 requires a warning statement “Do you really need a loan today?” to be given to all borrowers of small amount credit contracts (unsecured loans of less than $2,000 more commonly called payday loans. The notice must include information about financial counselling. “For information about other options … ring 1800 007 007”

37. Credit Law Default Notices • A number of the standard forms under the credit laws include information that a financial counsellor may also help eg Form 11 direct debit default, form 12 etc. Many standard forms under the credit laws must include information about financial counselling.

38. Appendix 1 About Financial Counselling Financial Counseling Australia is the peak body for financial counsellors in Australia. Financial counsellors: providing information, support and advocacy to people in financial difficulty .

39. Service Delivery National telephone line Face-to-face Self help website and tools

40. What does a financial counsellor do? Financial counsellors help their clients obtain a clear picture of their overall financial situation and the options available to them. For example, assistance could include: • assessing which debts are priorities, including whether the debts are legally owed and the amount owing is correct; • understanding the other factors affecting the client’s situation • e.g. health, stability of employment, abuse, relationship status, housing situation; • developing or refining a money plan • including looking for ways to increase the client’s income; • explaining what options clients may have in relation to their debts, weighing up the pros and cons of each option; • advocating or negotiating on behalf of the client, • e.g.to reduce, defer, or waive payments or help the client lodge a dispute with a dispute resolution scheme; • providing information • e.g., about rights under the National Credit Code to apply for a hardship variation, how the credit reporting system works or what is acceptable behaviour from debt collectors, the pros and cons of bankruptcy; • identifying if the client needs ongoing support and referral to other services • e.g. legal services, housing services.

41. About the Profession • Financial counsellors require extensive knowledge in a range of areas, including credit laws, debt enforcement laws, the bankruptcy regime, industry hardship policies and concession frameworks. Financial counsellors also require communication and counselling skills. • The qualification to be a financial counsellor is the Diploma of Community Services (Financial Counselling). This takes two years of full-time study or four years of part-time study. • There are about 950 financial counsellors in Australia.

42. Impact of Financial Counselling • Cost Benefit Analysis – Adelaide University • A cost-benefit analysis of financial counselling services funded by the Wyatt Trust in South Australia, has found that every $1 invested provides a $5 return for clients. • Australian Workplace Innovation and Social Service Research Centre, Adelaide University, “Paying it Forward”, March 2014. • Impact Analysis – Swinburne University • Approximately two-thirds of respondents said that their financial difficulties were resolved as a result of seeing a financial counsellor. • More than half thought that the advice helped them to avoid bankruptcy and almost three-quarters agreed that the advice helped them to avoid or curtail legal action. • Three-quarters said they were better able to prioritise debt. • Brackertz, N. “I Wish I’d Known Sooner: The Impact of Financial Counselling on Debt Resolution and Personal Wellbeing”, The Salvation Army and Swinburne University of Technology (Melbourne), October 2012.