I wrote recently about Veda changing their external dispute resolution scheme from the Financial Ombudsman Service (FOS) to the Credit and Investments Ombudsman (CIO): https://ow.ly/JGeK309cdsT
Veda changing EDR’s is entirely fiscally driven. They have moved to the CIO because the CIO will accept far less complaints about Veda, saving Veda millions of dollars.
The CIO will restrict complaints against Veda to the Privacy Act (Cth), where the FOS, similar to other gold standard Australian tribunals, would accept complaints based on other considerations like internal guidelines, codes, rules, and policies outside of the Privacy Act.
The biggest losers out of Veda’s move to the CIO will be business owners. That is because Part IIIA of the Privacy Act 1988 regulates the collection, use and disclosure of consumer credit information. It does not directly affect the circulation of commercial credit information.
What does this mean in practice for businesses and directors?
The credit that a business gets is called “commercial credit”. What is commercial credit? “Commercial credit” is credit which an individual or a business entity, such as a sole trader or a partner, obtains for business purposes not connected with the individual’s domestic, household or family interests.
What if you have a problem paying your commercial credit contract?
An example: You are late paying for your commercial credit contract. You may only be a couple of days late. You may have received NO notification that you are late. No letters to remind you. No phone call. You may be in significant hardship. It does not matter. The commercial credit provider can place a commercial default on your company credit file, or on your personal file as a director, for any amount above $100.
You can write to Veda and complain. And they are obliged to respond. However, they are not obliged to prove to you that the commercial default is correct. And now that Veda has moved to the CIO, there will be no avenue to escalate your complaint against Veda, to an Ombudsman, as the CIO will not accept complaints against Veda about commercial credit because commercial credit is not regulated by the Privacy Act.
So it is likely that the commercial default listing will remain on your credit file, whether paid or unpaid for 5 years, effecting every application for credit that you make. I had one this week for $139, and the director could not get credit.
At Repair My Credit Now we still have avenues to resolve commercial default listings for companies and directors.
We can assess your Veda company file (this includes providing you with an up to date copy of your Veda company file) for $150 (RRP for a company file alone is $199). For confidential advice please call 1300 306 811