Banks launch factsheets for customers in financial distress

The Australian Banking Association and its member banks have released two new fact sheets to help consumers and financial counsellors as the clouds darken on the economic horizon.

The consumer-focused fact sheet includes information on help that banks can provide to customers who run into financial difficulty and how financial hardship information can disappear from credit reports after a set period.

It also contains handy links to further assistance and outlines in clear language the available support. This includes the ABA’s Financial Assistance Hub and the CreditSmart website.

There is also a separate factsheet and further FAQs designed to help financial counsellors understand how financial hardship arrangements are reflected on credit reports from 1 July 2022 onwards.

“As the new financial year gathers pace, Australian banks are continually improving ways in which they communicate to customers the options that they have when customers run into financial difficulty and how this may or may not affect their credit score,” says ABA CEO Anna Bligh.

“If a customer experiences financial difficulty and believes they will not be able to make their loan or credit card repayments on time, it is important that they get in touch with their bank as soon as possible.”

Depending on their circumstances, Bligh says a customer and their bank may agree to a financial hardship arrangement. For example, it may be that a customer either stops making repayments for a few months to get a bit of breathing space or instead continues to make smaller repayments to reduce the total balance they owe.