National Building Financial Capability Charitable Trust Sector Newsletter

No. 11 3 November 2017

Contents 1. Meet the Trust Board 2. Diners Club ‘takes the court to court’ 3. Call for Expressions of Interest - Board Member, Pacific Perspective 4. NEEDING YOUR RESPONSE! 5. Financial dispute resolution 6. New resource to support the crackdown on unscrupulous mobile traders 7. Strength-based training 8. Community newsletters and media releases

Kia ora, greetings, and welcome to our latest newsletter.

Back when I started in June I drafted a list of targets for us to achieve by the end of 2017. It was

endorsed by our Board, and they consider a report on progress at each of their meetings. It isn’t a

startling list, but getting it right has been crucial for us to enter 2018 with a mindset and ability to

succeed. I’m pleased to report that we are on track. It really all comes down to three tasks.

Key has been reorientation of systems and mindsets to work with all budgeting/BFC services – whether

or not funded by MSD, big and small, Christian and secular, all the variety in our large and colourful

garden of 200 agencies delivering from more than 250 locations.

Keeping basic services going while starting the discussions on future direction, meeting with literally

dozens of stakeholder organisations, recruiting staff and moving premises has been critical.

And negotiating sustainable and long-term funding and a cooperative relationship with MSD is the

third area. By early December our staff team – 6.5 or 7.5 full time equivalent staff, a little over half the

staff complement of the Federation, and serving the needs of 80% more local services – will be in place

(more news on the details of those appointments in the next newsletter), and the planning discussions

which were at the core of the recent regional hui will have moulded into an operational plan to take

us through next year, while longer term planning proceeds. That will include an advocacy plan.

Of course, life goes on while renovation takes place. We have generated some media coverage, and

have led on the bank privacy waiver redrafting project. Some accords have progressed, and – including

this newsletter – we have been seeking input on matters which sound worrying, and which, armed

with evidence of experience from around our network, we can take to those with the power to do

something about them.

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As ever, input, questions, comments are welcome. Transparency is one of our values, please hold me

and all of us to that.

Tim Barnett

Chief Executive

Meet the Trust Board

Having just completed our fourth month, we thought it was

time for you to meet the important people behind some of the

great stuff to come from our Trust so far. You may have even

met one or two of them at the recent Regional Hui, where each

Board member got their chance to get involved.

Linda Ngata – Chairperson Executive Management - Te Runanga o Nga Maata Waka

Her governance roles extend over a number of sectors including community

development, Māori development, social services, health, education, housing, and

recently the building financial capability sector. Other governance roles include:

Chair of the National Community Organisation Grants Organisations, Board

Member of the Māori Community Leaders Forum Ōtautahi, Deputy Chair of Nga

Hau E Wha National Marae Charitable Trust and Deputy Chair of the Earthquake

Support Coordination Service, Christchurch.

40 years’ experience in leadership and project management roles.

Notable record for establishing inter-sectorial relationships with government agencies, non-

government organisations, community, Iwi and Maori. An active community advocate for the socially

and economically disadvantaged with a commitment to enterprise development, advocacy on behalf

of Māori issues and Whanau Ora.

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Nicola Sladden LLB (Victoria University) MPH (Boston University) Banking Ombudsman

Nicola is the Banking Ombudsman and Chief Executive at the Banking Ombudsman Scheme and has held this role since1 August 2015. She has over 20 years’ experience in dispute resolution, including four as Deputy Banking Ombudsman. She has a law degree from Victoria University and a Masters of Public Health from Boston University. Nicola was previously the Chief Legal Advisor at the Office of the Health and Disability Commissioner and has worked in private practice. She has published and presented on dispute resolution in New Zealand and

abroad. Nicola is a member of the Trust Board for the Malaghan Institute, an independent biomedical research institute and a former trustee for the Mary Potter Hospice.

Darryl Evans JP CEO of the Associated Budgeting Consultants

Darryl was raised and educated in Wales. He has lived in New Zealand for the

past 28 years. Darryl has been the CEO of Mangere Budgeting Services Trust

for the past 15 years, guiding the organisation through significant change and

growth.

Darryl has built a strong reputation fighting for people’s rights in New

Zealand and is often the first port of call by mainstream media and he writes

regularly on poverty related issues.

Darryl and his Cook Island / Samoan / Māori partner of 25 years have two children, both of Māori

descent, and lives in the Waikato.

He has recently completed study on a 'First Line Management and Leadership Programme' from a

Maori context and a 'National Certificate in Maori / Mauri Ora' at Te Wananga o Aotearoa. Darryl holds

a 'Certificate in Child Protection Studies' and is enrolled on an MBA in Business Administration.

In 2012 he was awarded a ‘Community Award’ for outstanding contribution to the Mangere-Otahuhu

Community by the Mangere-Otahuhu Local Board, Auckland Council.

In 2013 Darryl was awarded 'Community Worker of the Year' in Franklin's Finest People of the Year

Awards and in 2016 he received a Certificate of Achievement in the category of 'Kiwibank New Zealand

Local Hero of the Year' in The 2016 Kiwibank New Zealander of the Year Awards.

He sits on the Care and Protection Resource Panel (Mangere) with MVCOT formerly known as Child,

Youth and Family. Darryl was a former Director and Trustee of the Aotearoa Credit Union.

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John Exton - Treasurer

General Manager Kingdom Resources, Christchurch and Treasurer of the Trust

John brings more than 30 years business experience starting work as an

Accountant in both Chartered Accountancy and in industry. His passion for

social justice led him to train as a volunteer budget advisor in 1987 with the

Christchurch Budget Service.

John has now exceeded 20 years as the General Manager of Kingdom

Resources, which as well as providing budget advice over those years has

helped families with more than 1000 interest free loans granted.

He has been part of establishing and developing budgeting networks – CBNZ (Christian Budgeting NZ)

at the national level and previously BACN (Budget Advice Canterbury Network) at the local level.

Passion for the budget advice sector has led to him advocating for national change both with MSD and

on proposed legislation. He has also been part of the Steering Group that has journeyed to the

establishment of the National Building Financial Capability Charitable Trust.

Outside of work, John enjoys family time including mountain biking, walking and fishing

Carmel Thompson Manager of the Central Hawke’s Bay Budgeting Service

Carmel began as a volunteer Budget Adviser 27 years ago, becoming the

Coordinator of Central Hawke’s Bay Budget Service two years later, a position that

she still holds.

She has held various positions in local groups including Plunket, Play Centre,

Kindergarten, PTA, Scouts, Board of Trustee member for the Local School, Board

Member Support and Counselling Service, Growing through Grief and New Zealand

Federation of Family Budgeting Services, of which of she has held the position of

President for the last two years. She am an Interim Trustee of the Nga Tangata Micro Finance Trust.

Working with these various organisations has given Carmel a broad overview of governance.

Carmel has developed networks within her local community, regionally and nationally. Very hands-on,

Carmel is aware of the complex situations that people face on a day to day basis. She is not afraid to

advocate for those who are disadvantaged, both socially and economically.

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Tele’a Andrews

Tele'a is a Senior Policy Advisor in the Competition and Consumer Policy team at

the Ministry of Business Innovation and Employment. Previous to that he was a

senior executive at Vaka Tautua, a charitable organisation providing community

mental health, older people and disability services for Pacific people. He holds a

Masters of Public Policy with first class honours from the Auckland University

where he also held assistant teaching positions at the Centre for Pacific studies.

Tele’a currently serves as a Board member on the Trust providing a Pacific

perspective.

Diners Club ‘takes the court to court’ because it won’t rubber stamp their claims for a judgment debt

The voices of community lawyers and budget advisors made a difference for the outcomes of many vulnerable borrowers being taken to court by their lenders When lenders seek a judgment for overdue debt through the courts, they expect it to be ‘rubber

stamped’ by the court. This is a process known as ‘judgment by default’ when the borrower does not

turn up to defend themselves in court.

Applications for judgments and subsequent attachment orders (where money is docked from wages)

skyrocketed after changes were made to the civil debt enforcement system in 2014. The courts

noticed some applications appeared to be oppressive and judges began re-opening contracts on

grounds of oppression to review the interest and fees that were being charged. Judges then

summoned lenders to a ‘formal proof hearing’ to prove their claims. By re-opening the contract judges

can reduce the claim, change the terms or cancel it completely. Diners Club was one such lender

which was asked to prove its claim, and it objected on the grounds that the court does not have the

power to re-open a credit contract on its own motion. Diners believed the court should effectively

‘rubber stamp’ their claim according to the District Court Rules when the borrower fails to defend

themselves. Diners also believed the court could only reopen a contract at the borrower’s request.

The courts noticed that Diners Club waited for over 1 year before it submitted its claim to the court.

It also noted that ‘most, if not all lenders seem to do this’. Borrowers have 1 year to ask a court to re-

open a contract on grounds of oppression, meanwhile interest and charges are accruing. So if lenders

wait a year to seek judgment by default, their claim cannot be contested by borrowers. The 1 year

limitation does not apply to the court. Diners made a number of objections to the way that the courts

were challenging applications for a judgment by default, and Diners effectively ‘took the court to

court’ under a judicial review.

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Diners Club argued that ‘borrowers could adequately protect their own interests without the court’s

intervention’. The High Court disagreed with this. It also gave the Commerce Commission permission

to step in and speak up on behalf of borrowers. Diners said the Court had no evidence that borrowers

were unable to protect themselves or that their claims where oppressive, so the Commission provided

some. This is what the Judge had to say about the evidence we provided:

[51] The Commission provided some factual examples of how a borrower’s vulnerability affects their

ability to challenge proceedings filed against them. It noted that most complaints that it receives about

consumer credit contracts arise out of the intervention of community law centres or budget advisors,

and rarely on the initiative of the borrower themselves. The Commission submitted that this speaks

volumes about the efficacy [ability] of borrowers themselves holding lenders to account.

[52] The Commission’s evidence, which I accept, clearly demonstrates that borrowers cannot

reasonably be expected to routinely protect their own interests under the CCCFA. For a wide range of

reasons, borrowers are often not in a position to adequately protect their own interests.

The Court established it had the power to re-open contracts on its own without the borrower first

asking it to and that it will continue to re-open contracts and hold lenders to account.

The bottom line is this: your voices matter when you speak up for your clients. In this particular (and

rather important) instance the fact that you do became evidence that borrowers need the

intervention of the courts against oppressive contracts. So the message is clear, let us know what is

happening to them.

Lezanne Gibbs

Commerce Commission

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Call for Expressions of Interest- Board Member, Pacific Perspective

We will shortly have a vacancy for the position that provides a Pacific perspective on the Trust Board,

and are currently looking for expressions of interest for the position. The Trust is committed to a Board that includes a range of different perspectives. Pacific people

comprise a disproportionate number of those living in complex and challenging financial

circumstances so a Pacific perspective at the Board table is crucial to the success of the Trust. This

position supports the governance of the NBFCCT to include Pacific perspectives in forward planning

and thinking about how the sector wants to grow and serve a diverse group of providers and people. To put forward an expression of interest, send your CV and a short cover letter to

linda.ngata@maatawaka.org.nz. For details of the Job description: https://goo.gl/X1vgUE

Tele’a Andrews Board Member

NEEDING YOUR RESPONSE!

We have been contacted by the Insurance Council of New Zealand, keen to establish closer

relationships with budgeting services and to identify and try and tackle some of the insurance related

issues which financial mentors might be coming across. I have already raised the issue of expensive

and largely irrelevant insurance packages attached to credit arrangements – examples of this issue

and others would be very welcome! - – to tim@nbfcct.com

I also recently met with a General Manager from Dun and Bradstreet (rebranding as Illion); Credit

Simple is one of their services. They are keen to receive feedback from us on issues which budgeting

services have come across, both in relation to their credit reporting service (Credit Simple) and their

debt collection operation. Feedback would be very welcome – to tim@nbfcct.com.

Many thanks to those of you who responded with examples of banks pressuring people who have a

debt to them to try and obtain a hardship withdrawal from Kiwisaver schemes, including those with

a relationship with the same bank. The Financial Markets Authority and the Banking Ombudsman are

looking at the issue, and more examples would be very helpful – to tim@nbfcct.com.

Tim Barnett

Chief Executive

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Financial dispute resolution

Or, more specifically, a guide on how to complain about a finance company you think may be in breach

of the Credit Contracts and Consumer Finance Act (CCCFA).

Knowing how and when to complain to a financial disputes resolution scheme adds great value to the

service you can provide to your clients. A disputes scheme is able to help a complainant resolve an

issue they have might have with a creditor and, where there is a breach, the scheme is able to award

compensation to the complainant.

If the issue is a widespread one, you should also raise it with the Commerce Commission.

Who are the financial dispute resolution schemes?

There are four financial disputes resolution schemes and all financial service providers are legally

required to be registered to one of them. The schemes are:

Financial Service Complaints Ltd (FSCL) 0800 347 257

Insurance and Financial Services Ombudsman (IFSO) 0800 888 201

Financial Dispute Resolution Scheme (FDRS) 0508 337 337

Banking Ombudsman 0800 805 950

The schemes are paid for by the financial service providers and free to consumers.

The first thing you need to know when making a complaint is which of these schemes you should

complain to. All you need to do is search for the finance company on the Financial Service Providers

Register, or call any of the schemes.

Once you’ve located the company on the register, you’ll be able to see which disputes resolution

scheme the company is registered to. If they aren’t on the register, get in touch with any one of the

disputes resolution schemes.

Make a complaint

Believe it or not, being grumpy at a finance company doesn’t quite warrant making a complaint. Here

is a list of legitimate reasons you might complain:

• a breach of contract;

• irresponsible lending practices, particularly about questionable affordability assessments;

• not following industry standards, or any relevant code of practice or laws, including irresponsible lending;

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• misleading information or inappropriate advice such as suitability of the product for your needs;

• not disclosing fees and/or terms of the contract;

• debt recovery and repossession action in relation to a consumer credit contract ;

• decline of an insurance claim or cancelling of a policy (usually due to non-disclosure);

• disagreement over policy and contract interpretation;

• transaction disputes.

When listening to your client’s story, keep your ears peeled for any of the themes listed above. You’ll

usually have to ask questions to uncover whether the creditor has done anything wrong. For example,

your client is unlikely to say “my car has been repossessed and I don’t think the creditor followed the

legal process”. But they will tell you the car was repossessed, so then you can start asking questions

about whether they received the correct disclosure etc.

The Commerce Commission’s Red Flags tool will help with spotting unlawful conduct to look out for

and complain about. For more on what Red Flags is about check out this video

Summary

• Always keep your eyes and ears peeled for when a creditor might be taking advantage of your client.

• If they haven’t already, suggest the client raises the issue with the creditor first, or contact the dispute resolution scheme

• Search the Financial Service Providers Register to find which dispute resolution scheme the creditor is registered with.

• If in doubt, contact the dispute resolution scheme for help or guidance

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New resource to support the crackdown on unscrupulous mobile traders

The Financial Services Federation, which is the industry body representing responsible, non-bank

finance providers, has developed a new consumer awareness resource to support the Commerce

Commission’s crackdown on unscrupulous mobile traders, The Responsible Mobile Shop Code. The

Code is to help arm consumers with valuable knowledge for dealing with a mobile trader, especially

as we enter the expensive holiday season. These Codes are being offered to NBFCCT services to use

free-of-charge in their day-to-day business.

Should you wish to order physical copies of the brochure, please email fsf@fsf.org.nz, call 04 472 1731,

or message the Financial Services Federation Facebook page. PDF versions are also available which

you are welcome to use on your websites and other digital channels. A link to this can be

found here on their website.

Other resources the Financial services Federation has developed are the Responsible Lending

Guidelines, Code of Responsible Borrowing (in conjunction with the Federation of Family Budgeting

services), and the Responsible Credit-Related Insurance Code. Information about these Codes can also

be found at the link above.

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Strength-based training There have been a couple of strengths-based training sessions held in Auckland recently which were well attended, however at time of writing I have not had the opportunity to review the trainee feedback. There are further strength-based trainings scheduled for Whangarei, Hamilton and Wellington. There is no cost to these trainings and these have limited spaces still available so if you are interested in attending let Keith know via email (keith@nbfcct.com).

• Whangarei – 14 November o Whangarei Anglican Care

1b Deveron Street Whangarei 9.30 – 4

• Hamilton – 20 November

o Catholic Family Support 100 Morrinsville Road Hamilton 9.30 – 4

• Wellington – 8 December

o Venue to be confirmed, but likely to be in Lower Hutt

Financial mentor introductory training As has been mentioned in previous newsletters there have been lots of requests for introductory

training for new financial mentors and while we are working towards a redesign, the training itself

continues. There are currently seven introductory training courses underway around the country

(with three further course being organised), which is really positive for the sector at this early stage in

the Trust’s development.

As always, please contact Keith to discuss your services specific training requirements.

Keep your eyes peeled for an email soon from Keith outlining an opportunity from Careerforce to

complete the NZ Diploma in Health & Wellbeing (Applied Practice – Level 5).

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Community Newsletters and media releases

Hui E! https://goo.gl/99yZZY

The latest MSD BFC newsletter https://goo.gl/Enq86i

Policy Watch newsletter https://goo.gl/jK1AuV

Commerce Commission media releases

Cash for CAB in Commission settlement with Tower

https://goo.gl/E49zcR

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Get in touch

Donna Allan Office Manager

Email donna@nbfcct.com

Phone number 04 471 1420

Kate Henderson Financial Mentor Service Advisor

Email kate@nbfcct.com

Phone number 04 471 1420

Keith Coppins Senior Training Advisor

Email keith@nbfcct.com

Phone 027 324 7749

Rocky Webster Communications and Data Management Advisor

Email rocky@nbfcct.com

Phone 027 541 3889

Tim Barnett Chief Executive

Email tim@nbfcct.com

Phone 021 260 4298