One of the ways that many utility providers attempt to recover overdue accounts is by using a debt collector. If they are unsuccessful in getting the money, some suppliers will list the customer with a credit-reporting agency. Suppliers are required to notify customers if this occurs.
In many cases customers have moved address and are not aware that their debt has been listed with one of these agencies. It is only when the customer applies for consumer credit such as a loan, credit card or mobile phone, and it is declined, that they discover their details are with one of these agencies.
EWON can investigate a complaint where, for example, a customer is disputing the amount of the debt, or is disputing that they owe money. If we find that the supplier has made an error, they will normally ensure that the customer’s credit rating is corrected.
New privacy and credit reporting laws came into effect on 12 March 2014. Customers can now be default listed for an overdue bill if:
- they are at least 60 days overdue in making the payment
- the overdue amount is at least $150
- their provider has given a written notice informing the customer of the overdue payment and requesting payment
- their provider has given a second written notice informing the customer of their intention to default list, 30 days after giving the first notice
- their provider is not prevented by a statute of limitations from recovering the amount of the overdue payment.
If the customer was default listed for less than $150 prior to 12 March 2014, the listing would have been removed as this information cannot remain on a credit file after 12 March 2014.
Under the previous laws, people could be default listed for any overdue bills that remained unpaid for longer than 60 days, providing written notification was sent to the person's last known address. These previous laws would apply to all default listings applied to a customer’s credit file prior to 12 March 2014.
Once a person is listed with an agency, their listing remains for five years. Serious credit infringements stay on file for seven years.
People who are listed with a credit reporting agency can request a copy of their credit report directly from the agency. Individuals are entitled to a free credit report every 12 months, but in some instances the agency may charge a fee to obtain a copy. It usually takes around ten working days for the report to be sent.
If the information in the credit record is incorrect or misleading, these concerns can be raised directly with EWON if the complaint relates to the utility provider or with the Office of the Australian Information Commissioner.
For free legal advice and assistance contact the Financial Rights Legal Centre.
Bankruptcy and disconnection
Can your electricity, gas or water be disconnected if you owe money on your accounts but have been declared a bankrupt? The short answer is ‘yes’.
According to the Australian Financial Security Authority (formerly Insolvency and Trustee Service Australia) “if [a bankrupt individual has] unpaid accounts relating to housing or essential services such as electricity, telephone or gas the supplier may require payment of the account or a bond for the service to be maintained”.
A bankrupt customer who wants to maintain their energy or water supply will generally need to pay what is owing on their account or establish a payment plan to stay connected.
Customers unable to negotiate a realistic and affordable payment plan with their supplier can contact us.
Consumers with credit, debt and banking issues can phone the Credit and Debt Hotline.