Enhance support for people in financial hardship
To help people in financial hardship receive better assistance, the banking industry has released new guidance on of arrangements available for customers experiencing financial difficulty.
Australian Bankers’ Association Chief Executive Steven Münchenberg said: “There are many reasons why people can get into financial difficulty through no fault of their own. Today’s unemployment figures highlight one of the main circumstances that can lead to financial hardship. As we’ve seen with Australia’s recent bushfires and cyclones, natural disasters too can have a significant financial impact on individuals and their communities.
“Banks recognise that there are varying degrees of financial difficulty and that providing customers with the right type of assistance is important,” he said.
The ABA’s revised financial hardship guideline provides information about the type of support that is available to assist customers, including when a debt reduction and debt waiver may be appropriate.
The guideline provides examples for customers of the supporting documentation needed when seeking assistance from their bank when they are in financial hardship. It also aims to improve the interactions between banks and financial counsellors acting on behalf of customers, through the use of standardised forms and other improved communications.
“Banks want to help their customers, but it is also in the interests of banks to help customers get back on their feet in times of difficulty. To increase the chances that we can help, banks encourage customers to contact them as early as possible to prevent their situation from worsening.
“All too often this doesn’t happen, so people find themselves struggling to make payments due to unforseen changes in their lives. In these situations, financial counsellors provide essential services to the community by helping people through times of financial and emotional stress,” Mr Münchenberg said.
Financial Counselling Australia Executive Director Fiona Guthrie said: “Financial counsellors welcome the revised guideline and the banking industry’s continued commitment to improving its financial hardship processes. The banking industry has taken on board the feedback from the financial counselling sector and the revised guideline will make a positive difference to customers struggling with mortgages, loans or credit card debt."
Financial counselling is a public service which assists clients to deal with addressing multiple debts, including from mainstream banks and financial institutions, other lenders (including payday lenders), other creditors (including retailers, utilities and telecommunications companies), as well as managing often complex financial and social problems.
To view the ABA’s industry guideline on financial hardship and other tools and resources to assist people in financial difficulty, see the ABA website.
People in financial difficulty can contact a free, independent and confidential financial counsellor by ringing 1800 007 007 from anywhere in Australia.
12 March 2015.