When it comes to finances and managing money – things don't necessarily always pan out quite the way you'd intended. In this fact sheet we outline some simple troubleshooting tips for when things go wrong.
Trouble paying a bill?
If you're ever in a situation where you don't think you can pay a bill, an appropriate course of action is to contact the biller as soon as you realise it's going to be an issue. The biller will ultimately decide what course of action to take, but if you notify them sooner rather than later, they're more likely to be able to work with you on a solution, and you're more likely to reduce or avoid a penalty for a late or missed payment.
Trouble with repayments?
If it looks like you're going to miss a repayment on a loan or other type of credit, contact the credit provider sooner rather than later. They may then be able to discuss alternative payment arrangements with you, especially if the problem is only temporary.
The Consumer Credit Code and the 'hardship provisions'
If you're having trouble repaying due to a change in your circumstances, you may qualify to have your repayment structure altered under the Consumer Credit Code hardship provisions. The Code allows for changes to credit contracts in special circumstances, for example if your circumstances have changed due to job loss, illness, or other reasonable causes.
In this article:
Tips for when you have:
Trouble paying a bill
Trouble with repayments
Trouble with a direct debit and you need to cancel.
Trouble with a credit card transaction.
And we look at:
The banking and credit codes that outline your rights and responsibilities.
What to do if you need to complain
Preventive actions to help you keep your finances in good order and stop trouble in its tracks
Contact details for financial counsellors in your State or Territory.
While they won't stop you from ultimately having to pay off the loan, the hardship provisions under the Code may allow you to alter your loan agreement and make it easier for you to meet your repayments by:
extending the length of the contract or reducing the amount of the repayments;
postponing the dates of repayments; or
extending the length of the loan and postponing payment for a specified period.
The Consumer Credit Code
The Consumer Credit Code is a law that governs the consumer lending in Australia, and it's designed to protect your interests as a consumer. It covers all major financial institutions and major credit providers including banks, building societies, credit unions, finance companies, retail stores and other businesses, payday lenders, and more. The types of products covered by the Code include personal loans, credit and store cards, agreed overdraft facilities, housing loans, hire of goods, and payday loans. Visit www.creditcode.gov.au to find out more about the Code and what it does and doesn't cover.
Trouble with a direct debit?
If you need to cancel a direct debit
If you ever need to cancel a direct debit, how you go about it depends on whether the direct debit comes from your bank account or from your credit card.
Cancelling a direct debit from your bank account:
Inform either the biller or your bank.
It may take a few working days for a cancellation to become effective. If you try to cancel the day before a payment is due for example, it may not be processed in time. Some billers require a minimum of three working days to cancel a direct debit (some require much longer), so check with the biller to see what notice you are required to give.
Remember, once you sign – you're responsible
Note that it's your responsibility to ensure that you've read and understood the information provided to you before you sign a credit agreement. Once you've signed the agreement, regardless of whether you've read the full terms and conditions and other information provided, the contract is legally binding and you are responsible for fulfilling your obligations under the contract.
Cancelling a direct debit from your credit card:
Contact the biller directly (not your credit card issuer).
For more information on cancelling direct debits, including some important things to consider before you do, refer to the "Direct debits demystified" feature on www.moneyminded.com.au.
Trouble with a credit card transaction?
If you need to report an unauthorised credit transaction
If you notice a transaction on your credit card statement that you can't account for or which seems irregular, contact your card provider straight away. You can dispute any transaction when:
mail order goods fail to arrive, or they arrive broken or faulty;
you get charged twice for one transaction, or you're charged more than you authorised;
you cancel a direct debit but the merchant keeps debiting your account;
your credit card is stolen and is being used illegally.
In these cases, the credit provider will most likely reverse the transaction in question immediately, if the credit provider is satisfied that you are entitled to reverse a transaction.
Double-check before you cancel
Of course, before you request a reversal, double-check that the transaction is definitely incorrect or unauthorised. Remember that a merchant might appear on your credit card statement under a different name (eg Shep's Building Supplies may appear as Shephard Trading Co Pty Ltd), so even if you don't recognise the name, see if the amount paid and the date do correspond to a transaction that you made.
If you need to complain
If you've got a problem with a product or service provided by your bank, an appropriate course of action is to let them know straight away. Most Australian banks adopt the Code of Banking Practice, which sets out a three-step process for resolving complaints.
Step 1: Contact your bank and tell them about your problem
Report your problem to your bank so that they can take steps to fix it. If your bank can't resolve your problem immediately, the bank will take the following steps:
let you know who is handling your complaint;
keep you informed of what is happening;
aim to resolve your complaint within a specified time frame.
Most complaints can be quickly sorted out at this stage. Sometimes, however, it might be necessary to take your complaint further.
Step 2: Make a formal complaint to the bank
The Code of Banking Practice
The Code of Banking Practice outlines your obligations when it comes to the banking products and services that you use, and your bank's obligations towards you as a customer. All the major banks and many other banks in Australia adopt this Code. You can get a copy of the Code from the Australian Bankers' Association website at www.bankers.asn.au.
All banks have a process for handling disputes and will notify you of the name and contact number of the person investigating your dispute. Your bank might also have a customer advocate – these people can make an assessment of your complaint (at no charge), and then help to achieve a resolution.
If you're still not satisfied that your complaint has been resolved, and you feel you would like an independent review of the complaint (and any responses you have received), you may need to proceed to Step 3.
Step 3: Make a complaint to the Ombudsman
The Banking and Financial Services Ombudsman is an independent complaints scheme that is free for consumers. Refer your complaint to:
The Banking and Financial Services Ombudsman
GPO Box 3
Melbourne, Vic 3001
You can also telephone the Ombudsman's office on 1300 780 808, or visit www.bfso.org.au for more information.
Preventive actions
There are a number of basic things you can do when it comes to managing your day-to-day finances, that can keep your finances in good shape and help you to stop problems from arising. Of course, some problems are beyond your control, but even in those cases, a few simple habits can help to make sure you're alerted to any issues sooner rather than later. Consider these quick tips for preventive action:
Manage your paperwork
Always check your bank account and credit card statements as soon as you receive them, and make sure you can account for every transaction you see. If something doesn't seem right, contact your bank or credit issuer straight away.
Keep a file for receipts of major purchases and any guarantees or warranties so that you've got them on hand if you ever need to call on them.
Keep your financial details safe and secure at all times, and never give your PINs or passwords to anyone else.
Know what you're signing
Before you open a new bank account, new credit card, or sign up for any type of loan or other financial agreement, read the fine print carefully, and make sure you understand it. If you don't, ask questions before you sign. And if you're still unsure, get a second opinion from someone independent like a financial counsellor. Even if you do feel sure, a second opinion never hurts!
Stay on top of debts and repayments
Never borrow more money than you can afford to repay. That goes for credit cards too – never spend more than you can afford to pay back.
Keep a regular budget and make sure all your loan repayments and credit repayments are accounted for.
Make sure your direct debit payments are timed to come out a day or two after your pay goes into your account. That way you'll have the money in your account to cover those payments (as well as a buffer just in case your pay doesn't get processed straight away).
Never ignore a repayment that you can't make – notify the biller or debt issuer immediately to let them know there's a problem.
Create a safety net
Try to save up a small financial buffer for emergencies. If the car needs urgent repairs, or if the hot water service suddenly gives up on you and the family, replacing these necessary items without warning can derail even the most well organised budget. So keep a buffer that will either cover emergency costs, or at least lessen the stress of finding the money at short notice.
Financial counselling
Financial counsellors provide free services to people facing financial hardship and experiencing difficulty with their finances – they are confidential and independent.
A financial counsellor can:
help you organise your financial information;
design a personal budget;
suggest ways to change and improve your financial situation;
see whether you're eligible for government assistance;
negotiate with your creditors to see if you can come up with a more manageable repayment plan;
explain debt recovery procedures, bankruptcy and other alternatives;
advocate for you if you believe you have been treated unfairly;
refer you to other services if you need them, such as family support services, gambling counselling services, personal counselling or community legal aid.
Financial counselling vs debt counselling – what's the difference?
A financial counsellor is different from a fee-for-service debt counsellor. Many debt counselling services are costly – if at any stage a debt counsellor asks you to sign an agreement which includes paying any costs or fees, check this out carefully and get advice from a financial counsellor.
Below, we've included contact details to help you find free financial counselling services in your State or Territory.
For more information
Visit the following websites to find out more about troubleshooting for your finances, as well as your rights and responsibilities:
www.moneyminded.com.au – for lots more tips and strategies for keeping your finances in good order
www.fido.asic.gov.au - the Australian Securities and Investments Commission consumer website, FIDO
Care Financial Counselling Service: 02 6257 1788
(telephone advice and referral to a financial counsellor) http://www.carefcs.org
South Australia
Uniting Care Wesley Adelaide
08 8202 5180
(referral to a financial counsellor)
Northern Community Legal Service: 08 8281 6911
(telephone advice and referral to a financial counsellor)
South Australian Financial Counsellors Association: http://users.bigpond.com/safca/
Western Australia
Financial Counsellors Resource Project: 08 9221 9411
(referral to a financial counsellor) http://www.fcrp.org.au
Consumer Credit Legal Service: 08 9221 7066
(telephone advice and referral to a financial counsellor)
