Are you in financial hardship?

Are you in financial hardship?

Am I in financial hardship? You are in financial hardship if it s difficult to make your loan or lease payments or your other financial obligations. Your financial hardship may be caused by: losing your job or being on a reduced income a serious illness (yours or a family member s) higher mortgage interest rates or costs of living a business failure a relationship or family break-up the death of a spouse your workplace injury Financial hardship is common. Most people experience it at some point in their life. Don t wait! Ask for help right away. This guide explains how your financial services provider (e.g. your lender) and we can help you. Who is the Credit and Investments Ombudsman? The Credit and Investments Ombudsman (CIO) is a free, fair and impartial complaint service for consumers and small businesses. We investigate and resolve complaints against financial services providers. We are an independent dispute resolution service in the financial services industry, approved by the Australian Securities and Investments Commission (ASIC). How we can help If your financial services provider has knocked back your request for financial hardship assistance, we may be able to help you. More than 20,000 financial services providers are members of our service, including finance brokers, non-bank lenders, credit unions, mutual banks, financial planners, debt purchasers, small amount lenders, and motor vehicle financiers. If we receive a complaint about a member, the member must work with us to resolve the complaint.

What should I do first? Contact your financial services provider as soon as possible. Your financial services provider may be able to give you some options if you tell them about your situation quickly. For example, you can ask your financial services provider to agree to a payment arrangement while you are in financial hardship. You can also ask your financial services provider to stop any legal proceedings against you to give you time to make other arrangements. What is financial hardship assistance? Your financial services provider may help you with your situation. For example, your financial services provider may: offer you a payment arrangement, capitalise the loan arrears (this is where your overdue repayments are added to the total amount you owe your repayments are no longer overdue but you still need to repay them eventually), stop your repayments for a set time, extend the term of your loan to make your repayments less, give you time to sell your property, or make another reasonable proposal to help you to repay the loan eventually.

What do I need to do? While your financial services provider is deciding whether to give you financial hardship assistance, you should make the repayments you can afford. This will show your financial services provider that you are still trying to repay your debt. You may need to show your financial services provider: your financial position why you are in financial hardship how and when you think your situation will improve what kind of help you think you need You should make a budget to work out what repayments you can make and when you can make them. There is a helpful budget tool on ASIC s MoneySmart website: www.moneysmart.gov.au. Your financial services provider should consider your budget when deciding whether to give you financial hardship assistance. For extra free help, you can also contact a financial counsellor on 1800 007 007. What if my financial services provider says No? Come to us. Call us on 1800 138 422. If you are not happy with your financial services provider s response to your request for financial hardship assistance, you can make a complaint to us. Our service is free to consumers, and is fair and impartial. We can investigate your complaint if the financial services provider: has broken a law or relevant code of practice, has not met standards of good industry practice, or has acted unfairly towards you. Depending on your situation, we may be able to: ask the financial services provider to reconsider your request for help, or order the financial services provider to give you specific financial hardship assistance (e.g. a payment arrangement).

We can help you ask for a payment arrangement. What if the financial services provider takes legal action against me? In most cases, we can make your financial services provider stop legal action while we look at your complaint. If we do so, your financial services provider must not: start or continue legal action against you (unless you have already taken a step in the legal proceedings, other than lodging a defence or a defence and counterclaim), sell your debt to another company, or list a default (unpaid amount) on your credit file. There are a few situations when your financial services provider can continue legal action against you. I received a notice to vacate. Can CIO help me? If you receive notice to vacate your property from the Sheriff s Office before you make a complaint to us, we can only make your financial services provider stop the eviction in exceptional circumstances. If you get a notice to vacate your property, you should call a financial counsellor on 1800 007 007 or visit a community legal centre straight away. Both these services are free.

My financial services provider has obtained judgment against me. Can CIO help me? If your financial services provider has obtained judgment, we can only assist you in very limited circumstances. For example, we can ask the financial services provider to give you time to sell the property yourself or apply to the court to cancel the judgment if you think it is wrong. What about interest, fees and other charges? Interest, fees and charges will still be added to your debt while we look into your complaint. This means you should try to make any repayments you can while we investigate your complaint. We re here to help! Call us on 1800 138 422.

How to request assistance 1. Contact your financial services provider. Contact your financial services provider as soon as you realise you are having financial difficulties. You should clearly explain your situation and how you would like them to help you. For a quicker response, ask to speak with your financial services provider s complaints team. You can also find the contact details for your financial services provider s complaints team at www.cio.org.au/searchfsp. After you contact your financial services provider, they need to stop enforcement action while they consider your request for hardship assistance. Ask your financial services provider how long they will take to respond to your request. They should generally respond within 21 days* from your application for hardship assistance. 2. Unhappy with their response? Make a complaint to CIO. If you are not happy with your financial services provider s response or if they do not respond in a timely manner, * you can make a complaint to us. Making a complaint to us is easy. You can lodge a complaint at www.cio.org.au or send us a completed complaint form by email, fax or post. You can download the complaint form from our website or we can mail one to you. If you need assistance completing our complaint form, you can call us on 1800 138 422. * Exact number of days will depend on your circumstances. Contact us for more details.

How the Ombudsman works: Our process 1. Validation We will register your complaint within 2 days of getting it. We will confirm with you that we ve registered it and tell the financial services provider to stop or not start enforcement action. We will also give you the details of our case manager who will deal with your complaint. 2. Negotiation We usually negotiate an outcome that both you and your financial services provider agree to. We may negotiate with you and the financial services provider over the phone or by holding a conciliation conference. We may make a formal Recommendation to the financial services provider that they: enter a certain payment arrangement with you, or give you other hardship assistance. We will let you know if we need information from you. 3. Resolution If you and your financial services provider agree on an outcome, we will review it to make sure it is fair and clear. If you and your financial services provider cannot agree on an outcome, and we think the parties should make a payment arrangement or there should be other hardship assistance, the Ombudsman may make an Order or Determination. However, if a payment arrangement or other hardship assistance is not appropriate, we cannot assist you further. We will give you our reasons and the chance to respond. This guide is only an outline of our financial hardship complaints handling process. The steps involved in each complaint depend on the particular circumstances. Your case manager will explain the steps we take to resolve your complaint. You can also contact your case manager at any time if you have a question about your complaint.

Checklist Contact your financial services provider as soon as possible. Tell them you are in financial hardship. Don t stop making payments! Try to make any payments you can. Talk to a financial counsellor. Work out what payments you can make. Ask your financial services provider for a payment arrangement or other help. Also ask them to stay any legal action. Write down any conversations you have with your financial services provider, including phone calls. Keep copies of information such as contracts, emails and letters. If your financial hardship provider does not give you financial hardship assistance or respond to your request for help, make a complaint to us. Your financial services provider needs to stop enforcement action (e.g. collections activity, legal action, repossession or default listing) when you make a complaint to them or ask for financial hardship assistance. If you have received court documents, contact us immediately. Remember, giving us as much information as possible will help us investigate your complaint more quickly.

How we helped: Tim could not work due to injuries Tim could not work for three months because he was injured in a car accident. As Tim was self-employed, he could not earn an income while he was injured. He fell behind on his home loan repayments. He applied to his lender for hardship assistance, but the lender knocked back his request. Tim then returned to work and began making his usual repayments. Tim could not afford to make a lump sum payment to repay the overdue payments he owed on his loan. Tim was waiting on the outcome of the insurance claim he had made for his car accident. He expected to receive money that he could use to pay down the loan. Tim asked his lender for four months to repay the amounts that were overdue on his loan. His lender would not give Tim the extra time without evidence that his insurance claim would be paid. Tim did not have evidence to show the claim would be paid. The lender insisted that the overdue amounts be paid and started legal action against Tim. Tim approached us for assistance. We looked into Tim s complaint and asked the lender to capitalise the arrears on the loan (that is, add the overdue amounts to the total debt). The lender agreed to do this, if Tim made repayments for an extra four months (by making repayments for the extra four months, Tim would be able to pay back all the money he owed). The lender also agreed not to charge certain fees and charges that were added to Tim s debt during his financial hardship. How to contact us For all enquiries, please call us on 1800 138 422 (Free call) Monday to Friday from 9am - 5pm AEST (mobile charges apply) 1800 555 677 TTY users 1300 555 727 Speak and Listen 131 450 Interpreter service PO Box A252 Sydney South NSW 1235 info@cio.org.au www.cio.org.au