Credit complaints and the AER Expectations

Retailers have continued their responsible approach to credit issues this quarter. Backed by the AER Statement of Expectations, only one credit issue appeared in the top ten issues. No other credit issue was significant this quarter.

The AER has requested that Ombudsman schemes report on any customer complaints that appear to breach the Statement of Expectations. During this quarter EWON has reported 17 cases where there was a possible breach. In all these cases the retailers immediately resolved the customer’s complaint and provided the necessary support to rectify the initial problem. These cases are the exception to a positive and thorough response by retailers to vulnerable customers during COVID-19.

Case studies

Debt collection activity

A customer had moved out of the supply address in September 2020. She arranged a payment plan with her retailer to pay $77 per fortnight for her previous supply address. She said that she had missed payments and by the time she started paying again, a debt collection agency was making contact requesting a payment of $1,100.  The customer said she asked the debt collection agent for an explanation of how much she had paid and how much was owing so she could understand her account status, but the agency insisted on payment. The customer said she had health issues and was experiencing financial stress, so she could not pay more than she was paying before.

The retailer responded to us with an offer to place a six-month hold on the account which would allow the customer to pay the debt at a rate she could afford. We then asked the retailer about the role of the debt collection agency. The retailer responded that the debt remained with them and the collection agency was acting on its behalf. It also said the collection agency was only trying to get the customer on a payment plan and denied it had requested a lump sum payment. We pointed out that the customer knew she had been contacted by the collection agency and knew its business name. The retailer agreed that the debt collection agency would not contact the customer again.

No payment plan offered

A customer received a bill that was nearly double her normal bill. She contacted the retailer to advise she was in financial hardship. It responded that the bill was accurate and payable, and granted an extension but not a payment plan. She obtained $400 EAPA but could not afford to pay the remaining arrears in a lump sum. The customer said that she was extremely stressed by having a debt that she could not pay.

The retailer said the bill was for $1,076 but would only be $776 if paid on time. It immediately offered to apply the discount and waive the remaining balance. The customer was pleased with this outcome.