GE victims still wait for compo

GE Money agreed to pay the customers as part of a deal with the Australian Securities and Investments Commission, which found its staff had employed 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 the commission, a GE Money spokesman, Geoff Lynch, said he was still unsure when the company would be ready to make the first payments to victims, some of whom first complained to the commission 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 said a team of six 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 for compensation until this was completed.

GE Money's customers include people with credit cards issued by Coles, Myer and Harvey Norman, mostly used for so-called "interest-free" promotions. People who had personal loans with GE Money, or who borrowed to buy cars with Honda Finance and dozens of other car-finance providers, may also be eligible for compensation.

GE Money's capital finance arm, which includes the credit-card and car-finance businesses, increased its net profit by 48 per cent in 2007 to $161 million, ASIC documents show.

As part of the enforceable undertaking signed between GE Money and the commission in May, the company has appointed Ernst & Young's compliance advisory practice leader, Rob Walsh, to oversee an overhaul of its debt-collection network.

Mr Walsh is to complete a report for the ASIC by August 22 that 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 Money's internal systems and ensure everything is above board.

If the company is given the all-clear, it can then focus on making compensation payments. However, if ASIC believes GE Money still has problems, Mr Walsh must produce a second report, for which the company's managing director will have to sign a statutory declaration pledging to fix the problems. Another review in 2010 will test if 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.