01.New bill passed
New reforms will mean that dodgy for-profit enterprises can no longer claim to be ‘financial counsellors’ or to provide ‘financial counselling’.
The new protections, under the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011, will come into effect in March next year, and will restrict the use of the terms to not-for-profit organisations that actually provide those services.
Financial counsellors provide free, confidential and independent assistance to consumers so that they can overcome and prevent future financial difficulty.
However, for-profit organisations have also been using the ‘financial counsel’ label and can steer consumers into expensive and unnecessary financial services.
“It has been a source of great frustration to us that up until now, use of the term ‘financial counselling’ has been open to anyone,” says Fiona Guthrie, executive director of Financial Counselling Australia. [The new Bill] will put a stop to this with one fell swoop.”
In order to provide ‘financial counselling’ under the Bill an agency must offer free services, provide only sanctioned credit options, be eligible for membership of a financial counselling association, and ensure that staff have adequate skills knowledge and training.
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