How to fix a credit report error
OMBUDSMEN will bar rogue “credit repair agents” who slug unsuspecting consumers thousands of dollars to get black marks removed when it can be done for free.
One in seven adult Australians has a default on their credit report. Eighty per cent only discover this when applying for, say, a new mobile or home loan. Many believe the default is a mistake and turn to a credit repair agent for help.
Repair agents were responsible for nearly 30 per cent of the complaints to the Credit Ombudsman Service Ltd (COSL) in 2013-14 which alleged incorrect information in a credit report. COSL says agents charge an upfront fee of as much as $900 plus $1000 per credit default listed.
Credit Ombudsman Raj Venga told News Corp Australia some agents had falsely claimed a client was in hardship or that a loan had been provided in breach of responsible lending obligations. COSL would no longer deal with agents who repeatedly made bogus claims or delayed investigations in the hope that it would make a service provider cave in.
It received nearly 300 complaints through agents last financial year, up from 250 in 2012-13. “They can’t take advantage of a free service to enrich themselves,” Mr Venga said. “We can’t afford for this service to be abused.
“The fact is a default can only be removed if it is incorrect in the first place,” he said. COSL will get it removed.
Meanwhile the Financial Ombudsman Service (FOS) has decided to reject disputes brought by agents if the application deliberately lacks detail or when it believes a consumer’s best interests are not being protected. Disputes brought by agents surged 59 per cent to 1100 in 2013-14, FOS ombudsman Philip Field said.
COSL’s Mr Venga said other ombudsmen, such as the Telecommunications Industry Ombudsman (TIO) and state-specific energy and water ombudsmen “had the same problem” with agents.
One of the chief concerns is clients are not told ombudsmen can get incorrect defaults removed for free. In a bid to ensure agent clients know, this is typically spelt out on “authority to act” forms.
But the TIO and the Energy and Water Ombudsmen of NSW and Victoria said they had received completed forms where an agent had used an “electronic signature” for a client.
Agents lodged more than 4000 complaints with the TIO in 2013-14. EWOV got 174.
The number of cases brought by agents to the Energy and Water Ombudsman of NSW doubled in 2013-14 to more than 450.
None of the energy and water ombudsmen or the TIO are planning to blacklist agents, but all say they will closely watch what happens to volumes of agent-lodged complaint to the FOS and the Credit Ombudsman.
Energy and Water Ombudsman SA Sandy Canale said “at this current stage” agents were considered to be authorised representatives of consumers.
Energy and Water Ombudsman Queensland referred inquiries to Energy and Water Supply Minister Mark McArdle, whose spokesman said the “Queensland Government is strengthening consumer protections for electricity and gas customers” although none of the changes relate to credit repair agents. EWOQ received 53 complaints via agents in 2013-14.