FOS systemic issues update – April-June 2012

FOS has published its systemic issues update for April-June 2012 as reported to ASIC.

The credit related issues included:

  • Several disputes were referred for systemic issue review that involved a financial service provider’s (FSP’s) practices for making default listings and serious credit infringement listings. FOS was concerned that applicants may have been deprived of their opportunity to remedy defaults before they were listed and that the listings may have breached the Privacy Act 1988 (Cth) as they dealt with amounts less than 60 days overdue.
  • Another dispute relating to listings and serious credit infringement listings, revealed that the FSP’s standard default notices were not compliant with the relevant legislation.
  • FSP procedures which did not ensure collections and enforcement action were suspended after FOS notified the FSP of the disputes. A review of these disputes indicated that in a number of cases, default notices were dispatched to customers after FOS had notified the FSP of the disputes. In another case, security property was repossessed after FOS notified the FSP of the dispute.
  • In another case , legal proceedings against an applicant were initiated one week following FOS’s notification of the dispute. Similarly, the circumstances of a similar dispute showed that the FSP appeared unable to ensure that telephone contact from its collections team ceased during FOS’s investigation of the dispute.
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