Credit Management
2.0 Payment arrangements for consumers in financial hardship
Purpose
The purpose of these Procedures is to ensure that while a matter is under consideration by the TIO:
- Members continue to receive payments for undisputed amounts
- Members suspend credit management and do not commence legal action on any disputed amount, and
- consumer detriment is minimised.
Introduction
When a matter concerns, in the TIO’s view, a disputed amount, the TIO expects that:
- a consumer will continue to pay all undisputed amounts, and
- the Member will:
- suspend credit management and not commence legal action on the disputed amount while the matter remains under consideration by the TIO
- actively discuss and organise a reasonable payment arrangement for a debt at the consumer’s request if the consumer is in financial hardship, and
- have regard to the vulnerability of the consumer, including any payment arrangement already in place, before recommencing credit management when the matter is closed.
When, as part of a Complaint, the consumer is seeking a payment arrangement for an undisputed amount due to financial hardship, the TIO expects the consumer to make regular payments in good faith, according to the payment arrangement he or she is seeking.
Under the TIO Constitution, from the moment a Member is notified of a complaint having been made to the TIO and until such time as the complaint is settled, withdrawn, resolved or otherwise ceases to be handled by the TIO, the Member must not commence legal proceedings in any court, tribunal or alternative dispute resolution forum in relation to the subject matter of the complaint. The limited exceptions to this are set out in the TIO Constitution.
1.1
When, in the TIO’s view, the Enquiry or Complaint concerns a disputed amount, the TIO expects the consumer to continue to pay all undisputed amounts.
1.2
The TIO Officer will tell the consumer of this expectation at first contact and, if required, assist the consumer in working out what the undisputed amount may be.
1.3
The TIO Officer will generally not consider an Enquiry or Complaint further if he or she considers that the consumer is unreasonably withholding payment of undisputed amounts, for example, because the consumer claims to be expecting to receive compensation from the Member that would be equivalent to or greater than the undisputed amount.
1.4
When the TIO Officer decides not to consider an Enquiry or Complaint further for the above reason, the TIO Officer will explain his or her decision to the consumer.
2.1
When a consumer is seeking a payment arrangement due to financial hardship, the TIO Officer will tell the consumer to:
- actively discuss the proposed payment arrangement with the Member
- tell the Member what he or she can afford to pay
- make regular payments in good faith, according to the payment arrangement the consumer is seeking
- review the use of other services with the Member, in light of his or her financial hardship
- tell the Member immediately if he or she is unable to make any particular payment under a payment arrangement, and seek to organise a new arrangement, and
- seek advice, if necessary, from a financial counsellor about his or her financial circumstances.
3.1
When a matter has been classified as an Enquiry because the TIO Officer considers that the consumer has not given the Member an opportunity to consider the matter before contacting the TIO, the TIO Officer will tell the consumer to pay all undisputed amounts and to ask the Member to suspend credit management on all disputed amounts while the Member considers the matter.
3.2
When the TIO Officer considers that a matter is outside the jurisdiction of the TIO, or where the TIO has exercised discretion not to investigate, the TIO Officer will generally not tell the consumer to ask the Member to suspend credit management on disputed amounts, but all obligations of the Member under relevant industry codes will still apply.
3.3
The TIO Officer may in some circumstances, tell the consumer to ask a Member to suspend credit management on disputed amounts although the matter relates to a Complaint about another Member, for example, where a consumer is charged an early termination fee by his or her service provider as a result of an unauthorised transfer by another service provider.
4.1
Before referring a Complaint, and if appropriate to do so, the TIO Officer will ask the consumer to provide an estimate of the amount in dispute.
4.2
If, due to the circumstances of the Complaint, the consumer cannot offer any estimate of the disputed amount, the TIO Officer may assist the consumer in working out the disputed amount.
4.3
The TIO Officer will include the disputed amount in the Record.
4.4
When the TIO Officer refers a consumer with a Level 1 Complaint verbally to the service provider, the TIO Officer will tell the consumer to:
- ask the Member to suspend credit management for the disputed amount, and
- make payment of all undisputed amounts.
4.5
When the TIO Officer refers a Complaint of any classification Level to a Member in writing, the notification will include:
- the approximate total of the disputed amount claimed by the consumer and what it may comprise of
- a request for credit management on the disputed amount to be suspended for the duration of the TIO’s consideration of the Complaint including any Review
- an invitation to contact the TIO Officer if the Member has concerns about a payment arrangement, or the continued use of services by the consumer while the Complaint is in progress, and
- references to any relevant industry code or TIO Position Statements that may help the Member with any credit management decisions.
4.6
If the consumer returns to the TIO to claim that the Member has not suspended credit management as requested, the TIO may:
- treat the matter as an Urgent Complaint
- escalate a Level 1 Urgent Complaint to Level 2, or
- make a further request that the Member suspend credit management on any disputed amount.
4.7
If a Member continues with credit management activity after a request from the TIO that it be suspended, the Ombudsman or Deputy Ombudsman may issue an interim direction under the TIO Constitution.
4.8
The interim direction directs a Member to do, not to do, or cease doing any act that relates to credit management, for example:
- restore the supply of a service that has been disconnected or suspended for credit management reasons
- remove any default listing the Member has taken steps to record, or
- otherwise cease its usual credit management processes.
4.9
The interim direction is automatically binding on the Member:
- for 90 days
- until the interim direction is withdrawn or varied
- until the Complaint is Closed, or
- until the Ombudsman or Deputy Ombudsman issues another interim direction,
whichever occurs soonest.
4.10
A further interim direction, in the same or different terms, can be issued.
4.11
When the Member does not follow the course of action outlined in an interim direction, the TIO may refer the Member to the ACMA for non-compliance.
Effective Date: 5 July, 2010
Updated on: 1 December, 2011
