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NAB stops dealing with unlicensed debt management providers

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The major bank is cracking down on unlicensed debt management companies, revealing that it will no longer deal with them.

NAB has announced that it will no longer deal with unlicensed, fee-charging debt management providers in a bid to “help protect customers from potentially being placed in a worse position financially and help give them confidence they are getting the best support possible”.

The major bank said this was an important step as more Australians seek financial assistance as they deal with the economic impacts of the coronavirus pandemic.

Many for-profit providers do not hold a current Australian Financial Services Licence (AFSL) or an Australian Credit Licence (ACL) from ASIC, despite often appearing to offer services that require a licence.

In 2019, almost 20,000 NAB customers sought financial hardship assistance, the bank revealed. Additionally, around 9 per cent engaged debt management providers that charged fees and often operated without any professional credentials.

In 2020, the over 150,000 customers sought financial assistance in the wake of the COVID-19 crisis.

However, the financial services regulator has previously warned consumers about paying high fees for debt management companies, warning that some unlicensed companies claim they can fix poor credit ratings but often fail to do so, leaving the consumer in a worse financial situation.

NAB group executive, personal banking, Rachel Slade said the lender wanted to ensure that financially vulnerable customers were professionally supported, either directly by NAB or by an accredited representative.

“Now more than ever, customers are facing situations that can leave them in a vulnerable financial position,” Ms Slade said.

“We continue to check in with our customers who have requested payment deferrals due to the impact of COVID-19, and know many still need our support through this crisis.

“However, we also understand that some customers won’t be able to bounce straight back. As more Australians seek help, it is important that we no longer deal with unlicensed, fee-charging debt management providers.”

Ms Slade said NAB will continue to work with customers who are unable to make repayments to find the appropriate solution, or refer them to free and independent services that can assist them.

She added that this move would help protect customers from potentially being placed in a worse financial position.

“We’ll then work with the customers’ appropriately accredited debt advocate to give them time to get things back on track,” she said, adding that NAB Assist can help customers with grants, low interest loan and support for finding employment.

NAB added that consumers experiencing financial stress or hardship, or those facing credit or debt problems, could also:

  • talk to their lender or bank;
  • engage a “free and independent financial counsellor or community legal service (such as Way Forward or The National Debt Helpline);
  • seek assistance from the Consumer Action Law Centre or Financial Counselling Australia; or
  • visit ASIC’s MoneySmart website for more guidance around debt and credit repair.

Background to debt management provider warnings

In 2018, a Senate economics references committee recommended tighter regulation of all credit and debt management, repair and negotiation activities.

The move was initiated by NAB’s independent customer advocate Catherine Wolthuizen and has received ASIC’s support.

At that time, ASIC issued a warning to consumers about paying high fees for credit repair and debt advice services to companies that claim they can fix a poor credit rating.

ASIC was running a month-long campaign with other government agencies to help consumers understand that they may end up paying high fees by using these services.

Instead, the corporate regulator advised consumers facing debt problems to seek free help and guidance from financial counsellors and the National Debt Helpline.

ASIC deputy chair Peter Kell said consumers who believe they have had a credit default wrongly listed against them can contact the creditor and ask for it to be removed. If they are not satisfied with the outcome, they can contact the relevant dispute resolution service for help.

“Consumers experiencing money or debt problems don’t need to put themselves under further financial stress by paying high fees to firms providing credit repair and debt solution services,” Mr Kell said.

NAB’s announcement in relation to debt management providers comes as the bank also revealed that it would partially close 114 smaller regional branches – only opening them in the mornings – from next month.

The change, which will come in effect on 17 August, will see bankers splitting their time between over-the-counter service (during the hours of 9.30am-12.30pm) and digital or phone banking support.

[Related: ASIC to review responsible lending guidance]

NAB stops dealing with unlicensed debt management providers

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Malavika Santhebennur


Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.



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Nearly 1 in 3 Americans Struggle to Fill Out FAFSA, Debt.com Survey Finds

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FORT LAUDERDALE, Fla., June 22, 2021 /PRNewswire/ — A new Debt.com survey reveals that almost one in three Americans who fill out the Free Application for Federal Student Aid (FAFSA) struggle doing so. 

The biggest challenge, 44 percent said, was not knowing all the financial information FAFSA asked for. The second-biggest challenge was not having any help filling it out, 28 percent said. 

The majority of student loans are federal loans, which means filling out FAFSA is how most students can afford college. Debt.com chairman and CPA Howard Dvorkin says because FAFSA is so important, you should go into it prepared. With the FAFSA deadline on June 30, that should be sooner than later.

“FAFSA doesn’t just offer you loans, it offers you grants and other amounts you don’t have to pay back,” Dvorkin says. “If you go into it without all the information you need, you could be leaving free money on the table.” 

Some of the other findings include: 

  • 89 percent said they thought their child or themselves qualified for financial aid, but only 68 percent actually qualified.
  • Other challenges people faced while filling out FAFSA were receiving an error message (18 percent), not creating an FSA ID beforehand (7 percent) and not knowing the deadline (3 percent).
  • 34 percent said they felt the Pell grant would involve taking on more debt.

One in three people struggling to fill out FAFSA is too many, Dvorkin says. “FAFSA is too important to leave until the last minute or not use any resources for help,” he says. “Fill it out early so you can identify the issues you’re having and solve them quickly. You might end up in even more debt if you don’t.”

ABOUT: Debt.com is the consumer website where people can find help with credit card debt, student loan debt, tax debt, credit repair, bankruptcy, and more. Debt.com works with vetted and certified providers that give the best advice and solutions for consumers ‘when life happens.’

SOURCE Debt.com

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Deceiving Discount Insurance Plans, Credit Repair Scams – The Bee -The buzz in Bullhead City – Lake Havasu City – Kingman – Arizona – California

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Attorney General Ford Warns Nevadans About
Deceiving Discount Insurance Plans, Credit Repair Scams

Carson City, NV – Today, Nevada Attorney General Aaron D. Ford, in partnership with the Nevada Division of Insurance, encouraged Nevadans to stay vigilant as scammers attempt to take advantage of struggling individuals and businesses during the COVID-19 pandemic. Examples of the latest pandemic scams include the deceptive discount insurance plans and credit repair scams.

Deceptive Discount Insurance Plans:

With the American Rescue Plan Act, Nevadans have through August 15th, 2021 to enroll in or change their health plans in the Health Insurance Marketplace known as Nevada Health Link, because of the COVID-19 emergency. Nevadans shopping for a new plan should be aware that deceptive telemarketers and websites have been advertising discount medical and short-term plans falsely claiming that they are Affordable Care Act (ACA) compliant.

Entities are reaching out to consumers via robocalls, telemarketing, or through misleading websites that appear legitimate and may have similar names to legitimate insurance companies.

“When shopping for insurance, stick to the Nevada Health Link website as your first stop,” said Attorney General Aaron D. Ford. “These fake websites are intentionally confusing, leaving consumers who fall for them with unpaid medical bills.” “Limited health benefit plans serve a purpose but are not meant for long term use and have gaps in coverage because they are not designed to be comprehensive health insurance, whereas ACA compliant plans are,” explained Insurance Commissioner Barbara Richardson. “Be vigilant, understand the policy you are buying, and reach out to
the Division if you have questions.”

If you receive an unsolicited call from a health insurance company, do not provide any personal information over the phone. Consumers are encouraged to research the difference between limited benefit plans, ACA compliant plans and other types of plans by visiting http://insurance101.nv.gov/. The website also lists all of the companies in Nevada that are licensed to sell plans and tips on shopping for insurance.

To verify that an individual, agency, or company is licensed with the Division of Insurance, visit the Division’s website. The State of Nevada Division of Insurance regulates Nevada’s insurance industry.

Credit Repair Companies

As Nevadans start to emerge after a difficult year, many consumers may be looking for a fresh start on their credit. Credit repair companies offer the chance to get your credit back on track, but Nevadans should be aware that some of these companies may not be entirely legitimate. “If you are unhappy with your credit, you can take steps to repair it on your own,” said Attorney General Aaron D. Ford. “If you would prefer to pay someone to set up a
repayment plan for you, be on the lookout for misleading companies that may be trying to get your personal information.”

If you want to hire a credit repair company, the Attorney General’s Bureau of Consumer Protection offers the following tips for spotting a scam. Be alert if a company:
• Asks you to pay all fees up front before it does any work on your behalf. Some companies may charge a one-time fee ranging from $15-$200 to set up the account. However, no credit repair organization may charge a consumer any money before the service is fully performed;
• Instructs you to dispute information on your credit report that you know is accurate. With your legal consent, the company may challenge and clean up any inaccurate items with the three major credit bureaus or directly with the creditors. If a company tells you to say you have been the victim of identity theft when you have not, this is illegal;
• Promises to remove all negative information from your credit report. Credit repair takes time and not every negative item can be removed; and
• Doesn’t explain your legal rights when they tell you about their services. Legitimate credit repair companies should include a copy of the Consumer Credit File Rights. Additionally, you have the right to cancel any services without incurring any penalties within three business days.

Under the CARES Act, you can obtain an extension and a forbearance on some types of loans for up to 180 days. These protections are valid until June 30, 2021. Homeowners with federally backed loans may be able to apply for mortgage forbearance. Federal student loans are eligible for suspensions of payments and defaults, and interest rates are set to zero, until September 30, 2021.

If you have been victimized by any crime related to the COVID-19 pandemic, please file a complaint about your experience to the Attorney General’s Office and the National Center for Disaster (NCDF) hotline at 1-866-720-5721 or by e-mailing the NCFD at [email protected]

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Refinancing a Vehicle With a Cosigner

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The good news is that you don’t need your cosigner’s permission to refinance your car. Things can get tricky if your credit score isn’t good enough to qualify for refinancing, though. We’re covering typical refinancing requirements you may need to meet, and how refinancing impacts your cosigner.

Can My Cosigner Stop Me From Refinancing?

Refinancing a Car With a CosignerCosigners are useful for borrowers with poor credit. They can help you get into a car loan if your credit score isn’t good enough for an auto lender’s requirements. And, even better – the cosigner has no say in what you can or can’t do with your vehicle.

If you decide to refinance your vehicle or sell the car, you can do either without needing your cosigner’s permission. They have no rights to the vehicle since their name isn’t listed on the title. You don’t need to bring them to meet the refinancing lender when you apply for refinancing, either.

Refinancing is when you replace an auto loan on the same vehicle. The refinancing lender pays off the original loan, and once that’s paid off, your cosigner no longer has any obligation to the loan because it’s completed!

The only issue you may run into refinancing a car that you needed a cosigner to originally qualify for, is qualifying for refinancing by yourself.

Refinancing With Poor Credit

Borrowers typically need a cosigner when their credit score isn’t great. A cosigner lends you their good credit score to meet the loan qualifications. Just like auto financing, refinancing typically comes with requirements.

Here are some typical refinancing requirements:

  • You’ve had the auto loan for at least one year
  • You’ve stayed current on the car loan
  • The vehicle is under 10 years old with less than 100,000 miles
  • Your car has equity (vehicle’s value is higher than the loan balance)
  • Your credit score is good or has improved

Lenders may only consider you for refinancing if your credit situation has improved since the start of your auto loan. Recent, serious delinquencies can get in the way of refinancing, but if your credit score has been on the rise, the odds may be in your favor.

If you’ve been maintaining a good payment history on your car loan and keeping up with the rest of your bills, you may have a higher credit score now. Installment loans such as car loans can be great avenues for credit repair if you make all the payments on time.

Lender requirements vary, of course, but those are pretty common. If you’re feeling confident in your ability to qualify for refinancing, then check with our trusted partner for more information.

Refinancing Not an Option?

If you’ve missed a few payments on your car loan or your credit score still isn’t great, then you may struggle to qualify for refinancing. If your goal with refinancing was to remove the cosigner, selling the vehicle can accomplish this, too.

Remember that cosigners can’t stop you from selling the car (although it may be more polite to tell them if you do!). If you manage to sell the vehicle and completely pay off the lender, then you and the cosigner are both off the hook. But, if you need another car after the sale and you want to go it alone, pursuing a subprime auto loan may be for you.

Subprime car loans are for borrowers with less than perfect credit. Many borrowers with bad credit are eligible for vehicle financing without the help of a cosigner if they can meet the requirements. Finding a subprime auto loan can be tough if you don’t know where to look, but we want to help with that!

Here at Auto Credit Express, we’ve created a coast-to-coast network of special finance dealerships that are signed up with subprime lenders. Once you complete our auto loan request form, we’ll look for a dealer in your local area for free with no obligation. Get started on your path to a car loan today!

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