Vulnerable Australians may soon have better protection against so-called ‘debt vultures’ after other big four banks hinted they may follow NAB’s lead and abandon working with them.
NAB last week announced a crackdown on unlicensed fee-charging debt management providers (DMPs) that coincides with a rise in the number of customers accessing hardship measures, including loan deferrals.
According to NAB, 98,189 home loan customers and 39,528 businesses had deferred loans through the pandemic – with up to 20 per cent now resuming payments.
“As more Australians seek help it is important that we no longer deal with unlicensed, fee-charging debt management providers,” NAB group executive Rachel Slade said in a statement last week.
Unlicensed DMPs charge upfront fees to customers in financial strife on the understanding they can help negotiate payment plans, restructure debts and repair their credit rating.
Many do not hold a financial services licence or credit license issued by corporate regulator ASIC, despite appearing to provide such services.
However, similar services can be accessed through free, licensed financial counselling services, including the National Debt Helpline.
A NAB spokesperson on Friday confirmed to The New Daily that any new arrangements from August 17 would be subject to the crackdown.
But those who have already signed a contract with an unlicensed DMP could still seek an exit.
They may soon be joined by Commonwealth Bank, after a spokesperson confirmed to The New Daily it is reassessing how it engages with unlicensed DMPs.
“CBA is reviewing its relationship with credit repair and debt management firms,” he said on Friday.
“We are taking steps to terminate arrangements with firms we reasonably believe do not act in the best interests of our customers.”
‘Debt vultures’ prey on vulnerable Australians in debt
Melbourne woman Anger Ageur knows all too well about the predatory nature of unlicensed DMPs.
After being stood down from her job because of a work-related injury, she built up $5000 in mortgage arrears, before receiving a letter from a firm called J Daniels & Associates telling her she would soon be taken to court by ANZ (her lender).
However, she had not been contacted regarding any legal proceedings.
“I really didn’t give the letter any attention,” Ms Ageur told The New Daily.
“But less than five days later, a man came to my house and served the same letter to me directly – he told me he had been waiting there for two hours, wanted to help me through my problems, and being vulnerable at the time, it sounded too good to be true.”
Ms Ageur said after getting confirmation they would stall the legal pursuit, she signed online paperwork (with difficulty) – and that’s when the problems started.
“I went to Good Shepherd and the financial advisor told me to see a lawyer, and when I mentioned J Daniels’ name, he told me to get a copy of the contract, as they’re not a law firm,” Ms Ageur said.
“On the phone they said the first monthly payments would be $240, which was affordable to me, but the contract said they would be $1004.”
After receiving support through community lawyers, she sold her property – and a month out from settlement, her conveyancer told her there was a $7000 caveat.
“When we looked to find the source, we found it actually came from J Daniels, and they wouldn’t take it off – and the sale wouldn’t go ahead – unless we paid them that money,” Ms Ageur said.
Stronger regulation urged amid pandemic crisis
NAB’s move comes two years after a parliamentary economics enquiry found unlicensed DMPs rarely benefit a customer’s financial standing, urging the federal government to introduce a licensing system.
An ANZ spokesperson declined to comment directly on whether the bank would alter its stance on engaging with unlicensed DMPs.
However, it is understood the bank operates with such providers on a case-by-case basis, and any firms that ring significant alarm bells are escalated up to senior management for potential exclusion.
Consumer Action Law Centre senior policy officer Cat Newton told The New Daily that banks and governments must work together to introduce industry-wide regulation that diminishes the influence of ‘debt vultures’.
“With very high and hidden fees, poor-quality advice, and no requirement to meet even basic professional standards, too often these unregulated, fee-driven companies can’t be trusted to help,” Ms Newton said.
“With growing financial difficulty due to COVID-19, business will be booming for debt vultures unless the other banks, and the Federal Government, act quickly.”
Ms Ageur said she hoped banks would follow NAB to quash “sneaky” unlicensed DMPs.
“They’re fishing for vulnerable people and it’s fraud,” Ms Ageur said.
“This is stuff you would expect to happen where I’ve come from in Africa, the Middle East, but not in Australia, and that’s what p***ed me off more.”
Credit Intelligence (ASX:CI1) plans $6M raise for global expansion
- Credit Intelligence (CI1) has received firm commitments from Clee Capital to raise $6 million in proceeds
- Through the capital raise, the company will issue 150 million shares to sophisticated and institutional investors at four cents each
- Credit Intelligence also intends to issue one free attaching option for every two new shares issued during the raise
- Capital raise proceeds will fund the expansion of the company’s various businesses into global markets, including the U.S. and U.K.
- Credit Intelligence is down 4.08 per cent and trading at 4.7 cents per share
Credit Intelligence (CI1) has received firm commitments from Clee Capital to raise $6 million in proceeds.
Through the capital raise, the company will issue 150 million shares to sophisticated and institutional investors at four cents each.
Credit Intelligence has also proposed issuing one free attaching option for every two new shares issued during the raise. The free attaching options will have an exercise price of ten cents per share and will expire two years from the date of issue.
Credit Intelligence’s Executive Chairman, Jimmie Wong, commented that financial support produced during this capital raise will fund the company’s global expansion plans.
“During strong economic times, our lending business and YOZO business will perform well. In the event of economic downturn or recession, CI1 is uniquely placed to also thrive during these unfortunate times from our debt restructuring and credit repair businesses,” he said.
“These core CI1 businesses have long track records of success for many years in their current markets. CI1 is now embarking on exciting expansion plans for new and existing businesses in global markets,” he added.
Specifically, these plans involve the expansion of Credit Intelligence’s main business and YOZO buy-now-pay-later (BNPL) offering in their current markets of Australia and Asia. The company will also expand its Singapore lending business.
Primarily, proceeds from the capital raise will fund the expansion of Credit Intelligence’s debt restructuring business and YOZO BNPL into new global markets, such as the U.S. and U.K.
Credit Intelligence will also the proceeds to fund the additional development of its YOZO technology, which will provide further support to the company’s expansion efforts. Some funds may also go towards existing business operations and costs related to the offer.
Credit Intelligence is down 4.08 per cent, trading at 4.7 cents per share at 10:32 am AEDT.
8 figure Serial Entrepreneur Shawn Sharma Built an Empire Leveraging Credit
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Seven-figure entrepreneur, Shawn Sharma, teaches clients how to shop and travel smart to maximize returns on their credit cards
Since the dawn of credit and debit cards, shopping has never been easier. Think of how many times you have carelessly swiped your credit card to buy groceries, airline tickets, or even furniture, only to pay hundreds in interest later. Shawn Sharma has made a career showing thousands of clients how to turn their daily spending habits into substantial profits. Explaining easy ways to raise credit scores quickly and how to maximize credit card perks, Sharma has amassed over a million Instagram followers. The best news is, he started out with nothing when he was in college, meaning just about anyone can do the same.
The general principles of credit card hacking and travel hacking, both completely legal, are that you maximize bonuses, special deals, cash-back offers, and rewards just by using the cards the correct way. One trick is to pay off credit card bills each month before the statement is closed, resulting in sparing your interest fees, all the while maintaining your rewards, cash-back, and miles. Sharma shows his many clients how to amass wealth by improving their credit scores, accessing credit lines for funding their businesses, and offers tips to look at daily habits as potential earning opportunities.
Sharma grew up in poverty, not because of laziness or motivation, but because of unfair and unfortunate circumstances dished onto his immigrant parents. His father was a doctor, his mother a college professor, but neither could translate their experience and education in India to comparable US jobs. Between ailing health and the demands of feeding a young family, his parents could not achieve the American dream. Through witnessing their struggle, Sharma was inspired to reach for their dreams through his own education and business success. Hard work in high school earned him a full ride to an elite Math and Science boarding school. Shawn continued to Cornell University, where he was at the top of his class. Sharma refused to quit on his goals, even when life doubled down on the bad luck. His father passed away during Sharma’s final year at Cornell. Rather than giving up his dreams, he entered into the profitable world of credit card arbitrage, with impressive results.
Sharma discovered the secrets to wealth when he began maximizing credit card rewards and airline miles. What began as a means of saving his parents money on airline tickets back and forth from college became a side gig that generated $3,000 daily. “I was smart with this money and invested six figures into a 30-property Airbnb portfolio that I started from scratch with three other partners,” Sharma says. Although that business struggled due to partner disloyalty, it was still a valuable learning experience. Creating Credit 101, a company that helps clients fix their credit and build wealth without the common obstacle of start-up money, has grown into a leading credit repair company. “My vision with the company is to teach people that in the world of credit, we are all on the same playing field,” Sharma stresses that in personal wealth, at least in the area of credit card arbitrage, things like background, color, or station in life are irrelevant. Everyone is created equal in the realm of credit, and everyone can make money by following Sharma’s sound advice.
In less than two years, Sharma was able to build an Instagram following of over one million. Considering he did not utilize paid-for advertising, that is something to boast over, not that that is Sharma’s style. Instagram is the perfect platform for attracting new clients and distributing easy-to-follow daily tips, providing motivation, and networking with other entrepreneurs. One way Sharma stays at the top of his game is to allow plenty of funds for further education. Having spent hundreds of thousands of dollars on coaching, seminars, and courses, Sharma understands that becoming your healthiest mentally, personally, and in business is when you provide the greatest value to others.
These days, Sharma stays busy with dozens of businesses and has plenty of irons personally and professionally in the fire. He is active in several charities, takes care of his disabled mother, and works tirelessly on his future goals. One of his biggest goals is to get his medical degree and make a significant innovation in the medical technology space. “Seeing my parents struggle with chronic disease for years, I am driven to lessen that load on others,” he says. Most of Sharma’s clients report significant increases in their credit scores in only a few months, opening doors of opportunity they never knew existed.
Housing grant from TD bank aimed to help families displaced by pandemic
GREENVILLE, S.C. (WSPA) – A quarter-million dollars is on the way to help give families across the Greenville area the assistance they need to get back on their feet.
On Thursday, the Greenville Housing Fund received a $250-thousand dollar grant from TD Bank, which will go towards the “Home Again Partnership” — a joint venture between the Greenville Housing Fund and United Housing Connections.
Both organizations work to put displaced families back in stable housing.
“It’s impacting livelihoods, jobs, income, health,” President and CEO of the Greenville Housing Fund, Bryan Brown said. “It’s having significant and serious impacts on our community and this is a symptom of that.”
Brown said prior to the pandemic, they were aware of two hotel/motel communities where families were living, now there’s ten.
“That’s the impact that COVID has had on this community,” Brown said. “This growing insecurity, housing instability has led to families living in ten hotel motels in our community. “
The “Home Again Partnership” works to identify families with school aged children living in hotels to provide them with resources like housing and financial assistance, all aimed promoting self sufficiency.
“When you have families in hotels, you have a child doing homework off the edge of a bed and then eating off a hot plate, that’s not a family environment,” said CEO of United Housing Connections, Lorain Crowl.
Crowl said the first step is connecting students with a McKinney-Vento liaison.
“Which is a liaison that works in all Greenville County schools,” Crowl said. “Every school has one that is tasked with engaging homeless and families who are experiencing homelessness with children.”
And then the work begins.
“We start with the very basics,” Crowl said. “‘Where are you now?’ And then we carry you through with rent stabilization. That means we may come alongside you with some grant money.”
Or other resources like case management, credit repair, etc.
“We carry folks through a program, through a two-year program to help them develop a savings account, tools to be on their own and eventually they’re in their own housing,” said Crowl.
Both organizations say they have resources readily available.
“There are all kinds of programs and networks that we can really plug families into and then help them along to get to know those folks and be sure that they’re served,” said Crowl.
If you’re a Greenville family in need of assistance, Crowl said to contact your school counselor. Every school counselor in Greenville County is connected to a liaison who can connect you to the partnership.
Crowl said since the pandemic began, the partnership has served 375 households, with $2.1 million dollars put into the community from all resources to help families remain stabily housed.
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