FOS has identified new systemic issues relating to credit control during the June quarter of 2015 which it reported to the Australian Securities and Investments Commission (ASIC).

Error in credit listings
A number of disputes were referred to the systemic issues team where it was found that the FSP had made incorrect default listings with credit reporting agencies. The disputes raised concerns that the FSP had listed defaults, either incorrectly or inaccurately, for other customers. It was established that a number of defaults had been listed in error because they were for amounts under $150. Also a number of defaults relating to savings accounts had been listed due to an incorrect classification of account. The FSP requested that the credit reporting agency remove all of the erroneous listings.

Improper collection activity
A dispute which raised concerns that the FSP was not complying with section 83 of the National Credit Code (NCC) and clause 12 of the ACCC/ASIC Debt Collection Guidelines was reviewed as a possible systemic issue. The concern stemmed from default letters that are sent to customers who have entered into repayment arrangements with the FSP and are meeting those arrangements. The FSP advised that it sent default letters to customers who were meeting their repayment arrangements as a reminder that their accounts were still in arrears. This was despite the customer meeting the repayments. The Ombudsman was of the view that this matter did represent a definite systemic issue.

Error in credit listings
A number of FOS disputes illustrated that the section 80 Default Notice template used by the FSP, for a specified period of time, was defective. The template did not contain any warning that if the default was not remedied, the FSP would provide the default information to a credit reporting agency. The FSP was also unable to provide any subsequent correspondence containing the required warning. The FSP acknowledged the error and has agreed to identify any defective default listing made during the relevant period.

Inappropriate charging of fee
A number of FOS disputes illustrated that the FSP continued to charge Collection Action Fees on Consumer Car Loan products (specifically for making collection calls) while the accounts were subject to open FOS disputes. The FSP acknowledged that the charging of these fees should have been suspended in its accounts payable system while the dispute was open with FOS. It identified and remediated affected customers.