GE fast to collect, slow to disperse

AT LEAST 2000 customers owed compensation by the nation's biggest consumer credit provider, GE Money, are still awaiting payment for harassment by the company's debt collection department.

AT LEAST 2000 customers owed compensation by the nation's biggest consumer credit provider, GE Money, are still awaiting payment for harassment by the company's debt collection department.

GE Money agreed to pay them as part of a deal with the Australian Securities and Investments Commission, which found staff had used high-pressure tactics to intimidate customers into making up for missed credit card and car-finance payments.

But nearly two months after it signed an unprecedented enforceable undertaking with ASIC, GE Money spokesman Geoff Lynch said he was still unsure when it will be ready to make the first payments to victims, some of whom first complained to ASIC four years ago.

"I don't have a definite answer to that," Mr Lynch said, when asked when customers could expect to receive payment. He added that a team of six GE staff established to review thousands of complaints had "started compiling a list of names", but would not be sure how many customers would be eligible until this was completed.

The complaints have been logged on its computer system known as "Beacon".

GE Money's customers include people who have credit cards issued by the retailers Coles, Myer and Harvey Norman, mostly used for so-called "interest-free" promotions.

People who had personal loans through GE Money or borrowed to buy cars through Honda Finance and dozens of other car finance providers may also be eligible.

Its capital finance arm - which includes the credit cards and car finance business - increased its profit by 48% in 2007.

It posted a a $161 million net profit, compared with $109 million in the previous year, according to ASIC documents.

As part of the enforceable undertaking signed between GE Money and ASIC in May, GE has appointed Ernst & Young compliance advisory practice leader Rob Walsh as an independent consultant to oversee an overhaul of its debt collection network. Mr Walsh began work on June 20 and has until August 22 to complete a report for ASIC.

His report will outline whether GE Money has breached ASIC and Australian Competition and Consumer Commission debt collection guidelines, issued in 2005.

If so, Mr Walsh will have until September to come up with a plan to revamp GE's internal systems and ensure everything is above board.

If the company gets the all-clear it can then focus on making compensation payments.

But if ASIC believes GE Money still has problems, Mr Walsh must produce a second report, for which the managing director of GE Money will have to sign a statutory declaration pledging to fix the problems.

Another review in 2010 is expected to ensure the changes have taken root.

The work is similar to that done by Deloitte when AMP financial planning was rapped over the knuckles two years ago for chasing commissions by unnecessarily "switching" worker's superannuation.

Other companies to have signed enforceable undertakings with ASIC in the past two years include Multiplex and Axa Asia Pacific.

KEY POINTS

- GE Money customers still waiting on compensation for harassment by debt collectors.

- Enforceable undertaking signed with ASIC involves debt collection overhaul.


Join the Conversation...

There are comments posted so far.

If you'd like to join this conversation, please login or sign up here

Related Articles