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At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.

30 Year Old Man Evicted by Court Order

Wednesday, May 30, 2018 - Posted by Michael McCulloch

A 30 year old son has been ordered by a Court in New York to move out of his parents' home.

Christina and Mark Rotondo started Court proceedings earlier this month following their sons refusal to move out after 3 months of giving him notice to vacate. The drama started in February of this year when Michael Rotondo was given 14 days to move and indicated that they would take whatever action necessary to enforce their decision.  Christina and Mark Rotondo then sought legal advice and served another notice giving Michael 30 days to move out and offered him some advice and US$1,100 to find a new place to live.

Following further requests in March 2018 Michael still refused to leave and ejectment proceedings were commenced. Michael asked the Court to dismiss the request stating he ,"has never been expected to contribute to household expenses, or assisted with chores and the maintenance of the premises, and claims that this is simply a component of his living agreement."

Supreme Court Judge, Donal Greenwood, disagreed and granted the eviction. Michael has since indicated that he will be appealing the ruling and said in a statement to the media, "It seems to me like I should be provided with, you know, 30 days or so, because generally you get 30 days after you're found, you know, to have to vacate the premises. So I'm expecting something like that. But realistically, if that's not the case, I don't know."

Ironically the Court has ruled that Michael must leave the premises within 3 months which would be six months from the date of the first notice given to him in February.

Source: CNN World News - May 2018


25% of Buyers Don't Understand LMI

Wednesday, May 30, 2018 - Posted by Michael McCulloch

A recent survey conducted by Mortgage Choice has shown that 25% of buyers do not understand what Lenders Mortgage Insurance (LMI) is.

Out of the 1,000 people who took part in the survey 8% thought that LMI protected them with almost 18% thinking that it protected both them and the lender. Buyers in the age bracket of 18-29 were the most likely not to know what LMI was with a higher proportion of women (45%) not knowing what LMI is versus 37% of men.

On a State by State comparison, Victoria had the highest proportion of buyers who did not know what LMI was (46%) followed by Queensland (40%), Western Australia (39.6%) with NSW the most knowledgeable State coming in at 34.6%

CEO for Mortgage Choice, Susan Mitchell, said in a statement, "For many first home buyers, LMI is likely to be a cost they have to pay to get into the property market, particularly if they do not have a deposit that is at least 20% of the purchase price. The reality is that saving for a home deposit is a major challenge for first home buyers and this has been the result of strong price growth over the last few years."

Ms Mitchell went on to say that it was concerning that a large proportion of Australians had either a limited or no understanding of LMI and that lenders should take an active role in educating borrowers.

For a detailed explanation as to what LMI is visit the Lenders Mortgage Insurance entry on Wikipedia.


Bankrupt Man Gaoled for Obtaining Credit

Wednesday, May 30, 2018 - Posted by Michael McCulloch

A New South Wales man has recently been sentenced to 7 months imprisonment after twice obtaining credit without disclosing to credit providers that he was an undischarged bankrupt.

Tim Xenos, of Peakhurst, was sentenced in January 2018 at Downing Centre Local Court following an investigation by AFSA. It was disclosed at the hearing that Mr Xenos borrowed $1,020,000 from ANZ Bank and $960,000 from La Trobe Financial using the name Efthymios Xenos. Mr Xenos failed to disclose to both Creditors that he was an undischarged bankrupt under another name.

Magistrate Atkinson commented, in her view, that the matter was serious with Mr Xenos not only failing to disclose the fact that he was an undischarged bankrupt but also that he provided false information on his credit applications. While Mr Xenos appealed the sentence this was upheld last month with Judge Russell noting that the imprisonment was the only appropriate punishment in this matter owing to Mr Xenos' criminal history.

The sentence is to be served by way of an Intensive Corrections Order.

Source: AFSA - May 2018


Armidale Regional Council to Auction Properties

Wednesday, May 30, 2018 - Posted by Michael McCulloch

In our March 2018 edition we reported that Bundaberg Regional Council were auctioning several properties for outstanding rates. It appears that this trend is set to continue with Armidale Regional Council following in their footsteps.

The Armidale Express is reporting that council is set to auction 59 homes after owners have failed to pay their rates. Council is reporting that the 59 properties, which include vacant parcels of land, are valued at $748,300 which is roughly a quarter of the $2.455 million owing as at the end of June 2017. Outstanding rates vary with amounts owing to council between $2,391 to $75,811.

Chief Executive, Chris Rose, said in a statement to the media, "It is unfortunate council has to take this path. However, if council did not act to recoup the outstanding amounts, it would be unfair on ratepayers who pay their rates in full and on time. Property owners are advised to contact council if they are falling behind in paying rates. We can work out an agreeable payment plan or, in some cases, they can apply for hardship rate relief. Plus, rates can also be paid on a weekly, fortnightly or monthly basis via direct debit, rather than waiting until the quarterly bill."

All NSW councils are bound by the NSW Local Government Act that gives councils the power to sell occupied properties where rates have not been paid in more than 5 years and vacant land where the overdue rates exceed the current land valuation provided by the Valuer General.

The properties are set for auction at Armidale Town Hall on Friday, 14 September.


West Australians Seeking Bankruptcy in Record Numbers

Wednesday, May 30, 2018 - Posted by Michael McCulloch

New figures from the Australian Financial Security Authority (AFSA) this month reveal that a record number of West Australians are being forced into bankruptcy.

During the December 2017 - March 2018 quarter there were 545 bankruptcies recorded which equals the largest number of bankruptcies in the State since 2003 and an increase of 16% compared to the same period last year. Other States and Territories were steady with the number of bankruptcies being filed except in country NSW where there was an increase for the third consecutive quarter.

Adding in Part IX and Part X Debt Agreements into the equation a further 1,020 West Australians faced financial difficulty and entered into Debt Agreements to at least partly satisfy their debts to Creditors.

With Western Australia accounting for approximately 13% of all insolvencies nation-wide, AFSA did note that there was a slight fall in national numbers with Debt Agreements largely declining.

Read the personal insolvency statistics in full for the March 2018 quarter here.

Source: Perth Now - May 2018

Source: AFSA - Media Release May 2018


Councillor Fights Sheriff in Property Sale

Wednesday, May 30, 2018 - Posted by Michael McCulloch

Julie Hoskin, a councillor in Bendigo Victoria, has won her fight with the Sheriff following the sale of her family home.

Cr Hoskin was issued with a Warrant to Seize Property by the Sheriff after failing to meet repayments on a $386,819.53 debt to Ask Funding following a family law matter which arose 10 years ago. In an Affidavit submitted to the Court Cr Hoskin indicated that she struggled to repay the loan because of a chronic fatigue diagnosis that kept her out of employment until 2013. This was followed by foot injuries in 2015 and shortly thereafter deep vein thrombosis.

The Sheriff originally scheduled the sale of the property in May 2017 however Cr Hoskin was able to negotiate a 3 month moratorium while attempting to secure finance to repay the debt. With her application being declined to refinance the Sheriff proceeded with the auction and sold the property on 23 November for $389,000. Cr Hoskin however refused to hand over the property and argued in Court that the sale price was unfair.

Cr Hoskin said in an Affidavit that the sale price of $389,000 was significantly less than the valuation of $750,000 to $825,000. It is alleged that the Sheriff obtained 2 kerbside valuations from the Valuer-General that priced the property at $450,000 in 2015 and $470,000 in 2017.

Justice Michelle Quigley, of the Supreme Court, ruled in favour of Cr Hoskins saying that the process followed by the Sheriff was fundamentally flawed and led to a sale significantly undervalue. She found that the Sheriff breached their duty to act reasonably in the interests of the Creditor and Cr Hoskin in which to obtain a fair price for the property. Justice Quigley went on to say, "Stopping the Final Auction would have been a reasonable step to take in all the circumstances and would represent a balance of the best interests of both the judgment debtor and the judgment creditor."

While Cr Hoskin is asking that the sale of the property be set aside, Justice Quigley will hear further submissions before handing down a Decision.

Source: Bendigo Advertiser - May 2018


AFCA Given Final Approval

Wednesday, May 30, 2018 - Posted by Michael McCulloch

Ministerial approval has now been given for the new Australian Financial Complaints Authority (AFCA) to begin accepting new complaints on Thursday, 1 November 2018.

As we've indicated in our previous article, AFCA Given Green Light, AFCA will replace both the Financial Services Ombudsman (FOS) and the Credit and Investments Ombudsman (COSL) as the sole External Dispute Resolution scheme in the financial services sector.

AFCA have recently indicated that financial firms required to join the new scheme will be required to do so no later than Friday, 21 September 2018 with FOS claiming that over 98% of their current members have already completed the transfer requirements.

With the first board recently being announced by Minister for Revenue and Financial Services, Kelly O'Dwyer MP, we can expect the public consultation process to commence regarding the new AFCA Terms of Reference and the scheme's interim funding model and will report on these developments as updates become available.

Source: Australian Broker - May 2018


Finance Broker Pleads Guilty to Loan Fraud

Friday, April 27, 2018 - Posted by Michael McCulloch

A former finance broker has appeared before the Perth Magistrates' Court following charges being laid over giving false information and fraud.

ASIC allege that between January 2013 and April 2013 that Peter Lachlan McDonald of "Get Approved Finance" provided Esanda information that falsely represented consumers. In a statement to the media ASIC said, "...between January 2013 and April 2013, Mr McDonald, in the course of brokering four motor vehicle finance contracts, provided the lender Esanda with information that falsely represented that persons, who had in fact only agreed to be loan guarantors, were the applicant borrowers who would ultimately own the vehicle to be financed."

ASIC went on to say that in 1 case Mr McDonald inserted what he "purported" to be a consumers signature on an extended warranty policy and submitted the documents to Esanda.

Following an investigation by ASIC Mr McDonald was permanently banned in July 2015 from engaging in credit activities and providing financial services with a number of Get Approved Finance Brokers also being banned by ASIC for similar actions. 

We had previously reported ANZ had been found to have breached responsible lending laws with ANZ, the former owner of Esanda, agreeing to compensate more than 70 borrowers a total of $1.38 million for car loans organised by Get Approved Finance.

Mr McDonald has pleaded guilty to the charges and and was bailed to appear on Thursday, 10 May 2018 for sentencing.

Source: Sydney Morning Herald - April 2018


Debtors Named and Shamed on Public Website

Friday, April 27, 2018 - Posted by Michael McCulloch

A public State Government website has named and shamed 4,000 Tasmanians who have outstanding parking, Court fines and infringement notices.

Section 65 (1) of the Monetary Penalties Enforcement Act 2005 allows the State of Tasmania to publish the name, address and details of persons who have an unpaid debt where payment has not been received in full, entered into an approved repayment arrangement or satisifed the debt by other means. The site contains a link to download an Excel spreadsheet which is updated weekly.

With $61 million owing to the State of Tasmania drastic steps are being taken to obtain payment. The highest unpaid debt is $1.2 million owed by David Wei Meng Lee, convicted in 2016 of abalone trafficking. More than 7,225 Australian are currently listed with other enforcement action being taken to recover funds such as suspension of drivers' licences, suspension of car registration, Redirection of Money Owed Orders and Seizure and Sale of Assets.

The Monetary Penalties Enforcement Service ("MPES"), who is responsible for debt recovery for the Courts, Police, Local Government and Public Sector, issued 27,387 sanctions in the last year, an incease of 5,252 more than the last year.

Source: Illawarra Mercury - April 2018


ABA Announces New Banking Code of Practice

Friday, April 27, 2018 - Posted by Michael McCulloch

The Australian Banking Association ("ABA") has recently announced the retail banks wishing to become members will now be required to sign up for the new Banking Code of Practice ("The Code").

The Code, which is currently awaiting approval by ASIC will be binding, enforceable by law and will be monitored by an independent body. The Code, which was originally introduced in 1993, requires retail banks to provide plain English contracts, stop unsolicited offers to raise credit limits, give customers the ability to end credit cards online and inform customers about service fees before they are incurred.

Regulating the Code will be the responsibility of the Banking Code of Compliance Committee ("BCCC") which will have the power to investigate breaches and apply sanctions. The move comes as the financial services industry tries to regain customer trust with the Financial Services Institute of Australasia ("FINSIA") calling for an industry-wide code to restore professionalism among its members as a way of winning back customer trust.

The ABA is looking to implement The Code within 12 months of approval being received from ASIC.

Source: Financial Standard - March 2018



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