Bush fire victims risk bad credit rating due to zombie bills
Fire victim tells how she has been fighting her bank for four years after her credit card bill went up in smoke.. A cautionary tale for those in the fire zone.
People in the fire zone risk bad credit because their utility, credit card and insurance bills may go undelivered as they literally have no mailbox to put the bill in or the bill went up in smoke.
Leading consumer and financial law firm MyCRA Lawyers CEO Graham Doessel says previous experience from natural disasters has taught him people will end up with unpaid bills which could cause them problems for years to come.
“Particularly after the fires, floods even cyclones we find people had missed paying a bill quite simply because the bill was blown out of their mail box, went up in smoke or they had to move out of their home because it was uninhabitable but the bills kept coming to the address,” Mr Doessel said.
Louise of Melbourne escaped with her life when her home burnt down four years ago. “It was horrendous the trauma lead me to have a stroke,” she said.
As she tried to put her life back together she lost track of some of her bills leading to a default judgement being put on her credit file which impacted her ability to get finance including for something simple like a phone.
“I rang one company and told them my story and they removed the judgement straight away but HSBC won’t budge, I have told them I am happy to pay the bill but they won’t agree to remove the default and I need it removed.” she said.
“People in these fires won’t be thinking about their bills, but you have to, it can go on for years the problems a default causes. I’ve had to engage MyCRA Lawyers to fight this bank,” Louise said.
“Most utility companies, banks and insurers send out bills automatically and would have no idea your home has been razed,” MyCRA’s Mr Doessel said.
“As many people literally flee for their lives the last thing on their mind will be paying the power or phone bill, but they will need to stay on top of them and communicate with their providers.
“We suggest when people have a chance to take stock, make a list of their bills and contact each provider and let them know the circumstances and check no bills have gone unpaid as happened with Louise. If you are suffering hardship ask for an extension or a moratorium on payment for 3 months or even request the debt be forgiven,” he said.
“Most companies have the discretion to forgive a debt in extreme cases, as no company wants to be the catalyst that drives a customer to suicide over a bill.”
Even volunteer fire fighters and emergency services workers risk falling victim to a missed bill payment as their priorities are focused elsewhere, he says.
“Most people won’t even realise this has happened for years down the track, it’s only when they apply for a home loan, credit card or even a new mobile phone and get rejected that they find out,” Mr Doessel said.
“We estimate in Australia 3.8 million people have a credit default in their name they aren’t aware of, many from these zombie bills which can occur simply because someone has moved house or something more serious like a natural disaster.”
In many cases specialist legal advice is needed to restore a person’s good name.
See how to check your credit file for free – https://www.creditsmart.org.au/
MyCRA Lawyers CEO and specialist counsel will be conducting Facebook live question and answer to help people navigate any issues they have with creditors or utility companies Thursday 6.30pm Eastern Daylight saving time (5.30pm Qld 6pm SA).
8 January 2019.