By Chris Nicholls
SYDNEY: GE Money, credit provider to Harvey Norman, Betta Electrical and others, has been hit with an Enforced Undertaking from the Australian Securities and Investments Commission (ASIC) after complaints about its debt collection practices.
According to ASIC, the practices involved included excessive or inappropriate contact with customers, contact at unreasonable hours, unneccessary and unreasonable with third parties, including family members, colleagues or neighbours, an inflexible approach to repayment arrangements and even "potentially coercive and intimidating conduct towards debtors".
The Enforced Undertaking means GE Money’s consumer credit division will have to:
• engage an independent expert, over a period of two years, to review and assess its debt collection processes to ensure that it complies with the ASIC/ACCC Debt Collection Guidelines and make recommendations to correct any deficiencies;
• if the expert makes recommendations for improvements, provide ASIC with an Action Plan to implement those recommendations;
• pay compensation to affected customers in accordance with guidelines prepared by the Banking and Financial Services Ombudsman; and
• arrange and pay for an industry workshop to promote best practice in the debt collection industry.
ASIC executive director of enforcement, Jan Redfern, said, “ASIC’s approach to these serious issues has taken into account the major changes in personnel to GE Money’s senior management and the substantive and voluntary changes undertaken by the new regime, including compensation payments and the stated desire of the new management to ensure better compliance with the law.
“However, financial services licensees should note that GE Money’s previous failure to live up to its undertakings has resulted in conditions being imposed on its AFSL. ASIC will continue to monitor GE Money closely and will not hesitate to pursue additional regulatory options, if required,” said Redfern.
A copy of the new EU relating to GE Money’s debt collection practices is available from the ASIC website.
The Enforced Undertaking comes almost exactly a month after Labor minister for Pascoe Vale, Christine Campbell, criticised large electrical retailers such as Harvey Norman and its credit providers for not being transparent in their lending practices and performing inadequate credit checks.
Current.com.au contacted GE Money for comment, but did not receive a response prior to publication. BSR Group and Harvey Norman were also contacted, but were unable to respond prior to publication. Further comments will appear later today if available.