Today's announcement by the banking industry of further assistance to help customers experiencing financial hardship will provide some important relief to those who continue to be impacted by COVID-19.
CHOICE, Financial Rights Legal Centre, Consumer Action Law Centre and Financial Counselling Australia are at the forefront of helping people impacted by COVID-19, particularly people doing it tough.
Knowing that there will be further assistance from banks will be a weight off people's minds.
Consumer groups' key advice to anyone experiencing financial difficulty is:
If you can afford to resume payments, even at a reduced amount, the earlier you can do that the better.
Talk to your bank openly about your financial position. Banks have a range of options that might assist.
If you need more assistance, talk to a free and independent financial counsellor by ringing the National Debt Helpline on 1800 007 007.
To offer genuinely effective help to customers, banks will need to resource their assistance teams and proactively identify people that need help, starting with those at most risk of financial hardship.
Banks have great insight into customers who are most affected by this crisis. It is vital that banks use their data to identify people who are likely to be in financial hardship, contact them, and help them understand the options available to them.
The consumer groups are calling on banks to recognise that:
There will be groups of people who are going to need longer term and more flexible hardship arrangements.
There were groups of people pre-pandemic with persistent credit card debt. Lenders should be providing specific assistance, including interest rate reductions, debt waivers and refund of interest, where people have been trapped in long term, persistent credit card debt.
Access to assistance should be as simple as possible, acknowledging that financial difficulty will affect peoples' ability to pay not only loans but other household bills.
Other financial services providers, as well as utilities and telcos, will also need to extend their current assistance packages and provide proactive support to as many people who will need longer to get back on their feet.