NSW Credit card went to debt collection without notice to me

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Clancy

Well-Known Member
6 April 2016
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Hi, i have a joint credit card and mortgage debt with the ex.
I pay the mortgage, she pays the credit card,

we have not been able to agree on a settlement even though i offered her half of what the house is worth, she wants more.

Ex sent me an email a while back saying she is not paying the credit card to force me to agree to her settlement.

I can see the credit card in my online accounts list not getting paid.

I was expecting to start receiving messages and phone calls from the bank at some point, but strangely all was silent.

The bank definitely has my number since they called me when my other joint account was overdrawn.

One thing happened, is that before the credit card went overdue, i had lost my card and cancelled it. the bank asked me if i wanted a replacement and i said no.

So the bank has my number, they have my email, they have my message inbox with internet banking - i received not one single piece of information of any problem with the credit card.

Ok so i think well that's fine, i wont worry about it until they do contact me about it.

Recently i noticed the credit card account disappeared from my accounts list? I sent an email to my ex asking did she pay it? No reply as usual.

Next thing that happens is i get a phone call from the debt collectors demanding immediate payment and my credit rating is now locked so i cannot get any credit and I'm like, well actually i have not received any notification of anything and their like well not our problem blah blah.

Anyway, i don't see it being legal to suddenly drop a debt demand on my head with no notification of anything prior to that point?
 

Tim W

Lawyer
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28 April 2014
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You may find (perhaps in the very small print)
that the onus is on you to keep the bank up to date.
 

Clancy

Well-Known Member
6 April 2016
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You may find (perhaps in the very small print)
that the onus is on you to keep the bank up to date.

One would assume so, something along these lines;

I can send in a complaint to the banking ombudsmen, that's all i know?
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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There are a few issues to consider here.

1. You mentioned they have everything but your postal address. Default notices under the National Credit Code must be sent by mail. It’s likely they’ve been sent to whatever’s address they had and either returned or ignored. These two outcomes are generally triggers for the collection process to be stepped up.

2. If the credit card account is jointly held with your ex, there’s a possibility that you could have given consent for the bank to send notices to only one of you. Most debt accounts are ‘joint and several’, so the bank can pick and choose who they pursue and in what proportion.

3. If you do decide to make a complaint (and I don’t think it would be correct for you to do so without further evidence that the bank has actually done something wrong), you will need to go through the bank’s internal dispute resolution scheme first. If you go straight to the Ombudsman, they will refer it straight back to the bank if you indicate haven’t first attempted the internal process.
 

Clancy

Well-Known Member
6 April 2016
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SB
There are a few issues to consider here.

1. You mentioned they have everything but your postal address. Default notices under the National Credit Code must be sent by mail. It’s likely they’ve been sent to whatever’s address they had and either returned or ignored. These two outcomes are generally triggers for the collection process to be stepped up.

2. If the credit card account is jointly held with your ex, there’s a possibility that you could have given consent for the bank to send notices to only one of you. Most debt accounts are ‘joint and several’, so the bank can pick and choose who they pursue and in what proportion.

3. If you do decide to make a complaint (and I don’t think it would be correct for you to do so without further evidence that the bank has actually done something wrong), you will need to go through the bank’s internal dispute resolution scheme first. If you go straight to the Ombudsman, they will refer it straight back to the bank if you indicate haven’t first attempted the internal process.

1) Sorry, they do have my address, i get correspondence from other accounts with them, plus, they did send me the notice of the debt going to recovery just this week.

2) Possibly? Since i told them i did not want the replacement card from the one i lost, i stopped receiving statements in the mail for this account from that point on.

3) Already done, but this bank never responds to complaints i made in the past, i am not expecting them to respond to this complaint. How much time should i give them before going to the ombudsman?
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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If they haven’t given you the required 30 days to rectify the default before taking enforcement action, that’s a breach of the Code.

Issue 2 could be a factor, but there’s no way of telling that without a full review of the documents.

Regarding them ignoring the complaint, they do so at their own peril. Failing to comply with IDR requirements (internal dispute resolution) is a potential breach of their responsible lending obligations, which ASIC will jump all over if they suspect it’s systemic. Plus, it’s also grounds for sanction by their Ombudsman scheme. If they lose membership there, that could result in them losing their credit licence.

As for timeframes, the maximum IDR timeframe is 45 days unless you consent to an extension.
 

Clancy

Well-Known Member
6 April 2016
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If they haven’t given you the required 30 days to rectify the default before taking enforcement action, that’s a breach of the Code.

Issue 2 could be a factor, but there’s no way of telling that without a full review of the documents.

Regarding them ignoring the complaint, they do so at their own peril. Failing to comply with IDR requirements (internal dispute resolution) is a potential breach of their responsible lending obligations, which ASIC will jump all over if they suspect it’s systemic. Plus, it’s also grounds for sanction by their Ombudsman scheme. If they lose membership there, that could result in them losing their credit licence.

As for timeframes, the maximum IDR timeframe is 45 days unless you consent to an extension.

That's helpful to know, thank you.

It occurred to me that i can pay this debt from my super... but there will be heavy penalties to do so. On the other hand, the debt collector offered a $4000;00 discount to pay right away.

On the other hand, it was my original intention to use my super in the property settlement - i understand the penalties can be waived in that circumstance?
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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The bank can always waive the penalties, but getting your super out is a 'last resort' as it is difficult to do.
 

Clancy

Well-Known Member
6 April 2016
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The bank can always waive the penalties, but getting your super out is a 'last resort' as it is difficult to do.

Well since i cannot pull money out of thin air, its the only resort! lol

Unless my complaint gets a positive response from the bank and i can finance it some other way.