Other Types of Defaults
1. DEFAULTED AND SUED FOR STUDY FEES THAT HAD BEEN DEFERRED
In 1997 Mr. M was two years into a university course studying for a degree in economics. That year he deferred his study for one year to work with his father in the family business. In 1998 Mr. M was offered a block of land that was owned by his grandmother. The asking price was $70,000 which was slightly below the market price as his grandmother was keen to see her grandson obtain a start in the property market.
After making enquiries with various mortgage brokers he realized that he would need to come up with at least a 10% deposit. As he already had $5,000 he thought he would have little difficulty in obtaining a small personal loan to make up the difference. However, Mr. M soon discovered that he did not qualify for any loan as he had a default and a judgment published against his Baycorp credit file by his university relating to unpaid school fees. This news sent Mr. M into a state of utter despair and humiliation.
As he could not complete the sale his grandmother offered the land to his brother’s girlfriend who completed the purchase. and later resold the property for a substantial profit
After making enquiries with the university Mr. M discovered that he had one default published in 1997 and one judgment published in 1998. Both related to alleged unpaid school fees.
After eighteen months of correspondence with the university, Mr. M discovered that the default related to school fees for the year which he had deferred? Faced with this revelation, the university conceded that they had made a mistake and provided a letter to Baycorp Bureau requesting the default and judgment be removed. The solicitors for the university also made an application with the court to have the judgment set aside which was duly given in 2000.
That should have been the end of the matter but it wasn’t. In 2002 Mr. M applied for a $20,000.00 loan to inject capital into the family business. However, he was advised by his bank that he had one default and one judgment published on his credit report.
After obtaining a copy of his credit report from Baycorp he discovered a default for an overdue credit card and the judgment from the university. This time however, the judgment was recorded as July 2000. In addition, a new default had been published this time relating to an alleged overdrawn bank account.
Mr. M had had enough and sought advice from his solicitors who advised that Mr. M should seek damages for his loss relating to the property which he had missed out on in 1998.
Mr. M’s solicitors suggested he lodge a complaint with the office of the Federal Privacy Commissioner as this matter fell within his jurisdiction. After nearly eight months the Commissioner advised that they had investigated the bank matter and found there was no case to answer. In respect to the university the Commissioner declined to investigate.
Frustrated, Mr. M contacted Latham Moore who investigated both matters and identified several breaches of the Privacy Act 1988 and a failure by Baycorp of a accurately report up-to-date credit information files.
Latham Moore discovered that the Magistrates order to have the original Judgment set aside had been collected by Baycorp from the court files and had been misinterpreted as a default judgment order. This was negligent on Baycorp’s part which caused Mr. M to suffer humiliation. After notification Baycorp removed the judgment listing.
As for the overdue bank account, this was found not to comply with the Credit Reporting Code of Conduct and was therefore also removed from Baycorp’s credit file.
Mr. M is currently seeking advice from counsel in respect to his rights for loss and damages and will updated once further news is at hand.
2.UNRESOLVED HIGH BILL LEADS TO DEBT COLLECTION ACTION
When Ms D received a $232.60 water bill for the period 25 July 2003 to 27 October 2003, she contacted her water retailer to query it. The retailer told her an average family of four uses approximately 660 litres of water a day. In contrast, Mrs. D who lives alone had received a bill showing her average usage to be more in the line of 1,855 litres a day. The retailer said it would place a hold on the account and investigate the matter further.
Ms D heard nothing more. When she contacted the water retailer again, closer to the due date of her next bill, Ms D was asked to check for water leakage — she did so and confirmed there was none. Then she discovered that her meter number did not match that on the bill. The retailer said it would send a field officer around to verify the meter number and the reading. Ms D vacated the premises in December 2003, without the matter being resolved.
In January 2004, she received a letter from a debt collection agency. She rang the water retailer and was told that, contrary to previous advice, no hold had been placed on the account, and further, that its field officer had been unable to gain access to her previous unit. She wasn’t aware of this. The retailer said it would contact the property’s managing agent to arrange for meter access and would withdraw the debt from the debt collection agency. Ms D contacted EWOV, concerned that this wouldn’t be done and worried about the potential effect on her credit rating.
As part of its investigation, EWOV asked the water retailer to arrange an on-site meter inspection. It was discovered that, in the billing process, the meters for Units 7 and 8 had been transposed. The retailer amended its records accordingly, credited the full amount outstanding and apologised for the inconvenience caused to Ms D. It also confirmed it had withdrawn all debt collection activity in relation to the matter and that Ms D’s credit rating had not been affected by the incident.
Providers have a responsibility to keep customers informed about the progress of their cases, as well as to ensure that agreed actions are undertaken.
This case was taken from the Essential Services Ombudsman’s website.