Latest news with #FleurHoward
RNZ News
2 days ago
- Business
- RNZ News
Debt collectors harassing borrowers at their homes and workplaces, charity warns
Photo: 123RF An organisation representing financial mentors warns unethical debt collectors are harassing people to pay-off loans at their workplaces, homes and on social media. FinCap charity has released its annual Voices report after collecting data from more than 700 financial mentors. Its chief executive Fleur Howard said some debt collectors are deliberately panicking debtors and stricter rules are needed. "Financial mentors tell us they are working with people who are being harassed and coerced by debt collectors at work, at home, and on social media. This can endanger people's employment and embarrass them in front of their communities," she said. "These tactics force people to agree to repay debts they may not be legally responsible for, and repayment plans they can't afford. This can send people into a spiral of missed repayments, and see small initial debts balloon in size." The report shows half of those seeking help from a financial mentor are in work, while one in ten have a mortgage. Financial mentors have seen an 88 percent increase in waged or salaried clients earning over $1000 per week since 2021. The report states that many households have taken on debt to pay bills and keep food on the table, and a large burden of accumulated household debt has been building, much of which has become unmanageable. It said some debt collectors were also using coercion or illegitimate threats of legal action and turning up at people's workpaces, homes and sending excessive automated texts and emails. "This isn't about getting people out of debts that they legitimately owe," Howard said. "Some debts arise that should never have been issued under today's responsible lending rules. Sometimes, they are debts owed by a relative, which people are pressured into taking responsibility for, or there is actually no legitimate debt at all." Howard said many households were struggling with the burden of accumulated and unmanageable debt. "There are debt collection agencies who act responsibly, but the lax legal framework creates a wild west situation, where some unscrupulous debt collectors act unethically. " The Fair Trading Act governs all private debt collection and in May, Commerce and Consumer Affairs Minister Scott Simpson said he would review the Act later this year with a responsibility to "safeguard the interests of consumers and ensure that their rights are fairly upheld". Howard said that planned review, alongisde the Financial Services Reforms Bills currently before Parliament were important opportunities to fix the law around debt collection. "Debt collection reform will enable people to repay money they legitimately owe, without being subject to harassment and bullying," she said. David Verry from North Harbour Budgeting Services said the report echoed what financial mentors saw on a daily basis. He said when people believe that they're going to be talked about in social media, or somebody was turning up to their work premises they may feel forced to make some sort of payment that they may not be able to afford. "They'll feel forced into making some form of payment towards it before they make payments on other things, things like food or petrol for the car," he said. "When people turn up to people's places and they're in sort of pseudo uniforms that can be very intimidating for clients." Verry said currently there was no industry body that people could go to and complain about the actions of the debt collectors. "It's essentially an industry which is just completely unregulated, and what we would like to see is some boundaries put in place there," he said. "We'd like them brought into the Fair Trading Act. We'd like them to be licensed." Verry said financial mentors just want debt collectors to play the game fairly. FinCap is proposing three key recommendations for debt collection conduct rules: Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
20-07-2025
- Business
- NZ Herald
Proposed Working for Families changes may leave some worse off, FinCap warns
There is almost $300 million owed in Working for Families debt. A discussion document, on which submissions were sought, said the Government's current thinking was that a quarterly assessment of Working for Families eligibility could strike the right balance between responsiveness, certainty and recipient effort. This would adjust what people were paid much more frequently. But Fleur Howard, chief executive of FinCap, said in a submission in response that she was worried that some families could be left without enough money. A shorter quarterly assessment period would be an improvement, Howard said, but it needed to be refined. 'Aspects of the proposed design appear to suit some whānau situations better than others. We are concerned that in its current state, this design would have a disproportionally negative impact on those who are already experiencing financial instability due to more fluctuations in payment amount.' Howard said FinCap's internal data showed most financial mentor clients had a weekly budget deficit even after they had received help. 'More often than not, this deficit is due to whānau trying to pay for essentials, and commonly going into debt to do so. 'This, among other markers, points to the fact that government support is not currently adequate to cover living expenses. We have concerns that some of the proposed changes would exacerbate income inadequacy in certain scenarios, particularly for whānau who need that money week to week.' Howard said an example used in the discussion document, outlining a situation where a woman on the sole parent benefit went into additional work for a short period of time, highlighted a potentially unacceptable outcome. In that case, the woman's Working for Families credits would be reduced by $130 a week for the quarter after her temporary work, even though she was no longer in work, because the calculation was based on the higher income from the previous quarter. 'We can see that the 'lagged income' mechanism makes sense from the perspective of achieving accuracy, however the potential for a decreased payment below what a whānau is entitled to poses real risk for wellbeing and social participation. 'There is also a real concern over the dynamic whereby a quarterly period of higher income followed by a quarterly period of low income would see increased hardship within the low-income period, due to those payments reflecting the past higher income. 'While this could be squared up during the end of year process, our data tells us that most whānau living week to week need that money as part of their weekly payments.' Howard said mentors were also concerned something similar could happen if someone lost a job and went on the benefit, because their reduced income would not show up in the Working for Families calculation for another quarter. 'Whānau need every cent they are entitled to in a timely manner when events such as job loss occur.' A solution could be for the quarterly assessment period to look forward, rather than backwards, she said. – RNZ
Otago Daily Times
20-07-2025
- Business
- Otago Daily Times
Will changes to Working for Families leave people worse off?
By Susan Edmunds of RNZ An organisation representing financial mentors around the country is worried that proposed changes to the Working for Families scheme could leave some families worse off. As part of the Budget, the government said it would look at options to help avoid the issue of Working for Families debt. In the 2022 year, only 24 percent of households receiving weekly or fortnightly Working for Families payments and who were squared up by IRD at the end of the tax year had received the right amount of money. People who earned more than expected can end up with an overpayment debt that that they struggle to pay back. There is almost $300 million owed in Working for Families debt. A discussion document, on which submissions were sought, said the government's current thinking was that a quarterly assessment of Working for Families eligibility could strike the right balance between responsiveness, certainty and recipient effort. This would adjust what people were paid much more frequently. But Fleur Howard, chief executive of FinCap, said in a submission in response that she was worried that some families could be left without enough money. A shorter quarterly assessment period would be an improvement, she said, but it needed to be refined. "Aspects of the proposed design appear to suit some whānau situations better than others. We are concerned that in its current state, this design would have a disproportionally negative impact on those who are already experiencing financial instability due to more fluctuations in payment amount." She said FinCap's internal data showed most financial mentor clients had a weekly budget deficit even after they had received help. "More often than not, this deficit is due to whānau trying to pay for essentials, and commonly going into debt to do so. "This, among other markers, points to the fact that government support is not currently adequate to cover living expenses. We have concerns that some of the proposed changes would exacerbate income inadequacy in certain scenarios, particularly for whānau who need that money week to week." She said an example used in the discussion document, outlining a situation where a woman on the sole parent benefit went into additional work for a short period of time, highlighted a potentially unacceptable outcome. In that case, the woman's Working for Families credits would be reduced by $130 a week for the quarter after her temporary work, even though she was no longer in work, because the calculation was based on the higher income from the previous quarter. "We can see that the 'lagged income' mechanism makes sense from the perspective of achieving accuracy, however the potential for a decreased payment below what a whānau is entitled to poses real risk for wellbeing and social participation. "There is also a real concern over the dynamic whereby a quarterly period of higher income followed by a quarterly period of low income would see increased hardship within the low-income period, due to those payments reflecting the past higher income. "While this could be squared up during the end of year process, our data tells us that most whānau living week to week need that money as part of their weekly payments." Howard said mentors were also concerned something similar could happen if someone lost a job and went on the benefit, because their reduced income would not show up in the Working for Families calculation for another quarter. "Whānau need every cent they are entitled to in a timely manner when events such as job loss occur." A solution could be for the quarterly assessment period to look forward, rather than backwards, she said.
Otago Daily Times
20-07-2025
- Business
- Otago Daily Times
Will Working for Families changes leave people worse off?
By Susan Edmunds of RNZ An organisation representing financial mentors around the country is worried that proposed changes to the Working for Families scheme could leave some families worse off. As part of the Budget, the government said it would look at options to help avoid the issue of Working for Families debt. In the 2022 year, only 24 percent of households receiving weekly or fortnightly Working for Families payments and who were squared up by IRD at the end of the tax year had received the right amount of money. People who earned more than expected can end up with an overpayment debt that that they struggle to pay back. There is almost $300 million owed in Working for Families debt. A discussion document, on which submissions were sought, said the government's current thinking was that a quarterly assessment of Working for Families eligibility could strike the right balance between responsiveness, certainty and recipient effort. This would adjust what people were paid much more frequently. But Fleur Howard, chief executive of FinCap, said in a submission in response that she was worried that some families could be left without enough money. A shorter quarterly assessment period would be an improvement, she said, but it needed to be refined. "Aspects of the proposed design appear to suit some whānau situations better than others. We are concerned that in its current state, this design would have a disproportionally negative impact on those who are already experiencing financial instability due to more fluctuations in payment amount." She said FinCap's internal data showed most financial mentor clients had a weekly budget deficit even after they had received help. "More often than not, this deficit is due to whānau trying to pay for essentials, and commonly going into debt to do so. "This, among other markers, points to the fact that government support is not currently adequate to cover living expenses. We have concerns that some of the proposed changes would exacerbate income inadequacy in certain scenarios, particularly for whānau who need that money week to week." She said an example used in the discussion document, outlining a situation where a woman on the sole parent benefit went into additional work for a short period of time, highlighted a potentially unacceptable outcome. In that case, the woman's Working for Families credits would be reduced by $130 a week for the quarter after her temporary work, even though she was no longer in work, because the calculation was based on the higher income from the previous quarter. "We can see that the 'lagged income' mechanism makes sense from the perspective of achieving accuracy, however the potential for a decreased payment below what a whānau is entitled to poses real risk for wellbeing and social participation. "There is also a real concern over the dynamic whereby a quarterly period of higher income followed by a quarterly period of low income would see increased hardship within the low-income period, due to those payments reflecting the past higher income. "While this could be squared up during the end of year process, our data tells us that most whānau living week to week need that money as part of their weekly payments." Howard said mentors were also concerned something similar could happen if someone lost a job and went on the benefit, because their reduced income would not show up in the Working for Families calculation for another quarter. "Whānau need every cent they are entitled to in a timely manner when events such as job loss occur." A solution could be for the quarterly assessment period to look forward, rather than backwards, she said.
RNZ News
20-07-2025
- Business
- RNZ News
Will Working for Families changes leave people worse off?
Fleur Howard, chief executive of FinCap, says some families could be left without enough money week to week. Photo: RNZ / Rebekah Parsons-King An organisation representing financial mentors around the country is worried that proposed changes to the Working for Families scheme could leave some families worse off. As part of the Budget, the government said it would look at options to help avoid the issue of Working for Families debt. In the 2022 year, only 24 percent of households receiving weekly or fortnightly Working for Families payments and who were squared up by IRD at the end of the tax year had received the right amount of money. People who earned more than expected can end up with an overpayment debt that that they struggle to pay back . There is almost $300 million owed in Working for Families debt . A discussion document, on which submissions were sought, said the government's current thinking was that a quarterly assessment of Working for Families eligibility could strike the right balance between responsiveness, certainty and recipient effort. This would adjust what people were paid much more frequently. But Fleur Howard, chief executive of FinCap, said in a submission in response that she was worried that some families could be left without enough money. A shorter quarterly assessment period would be an improvement, she said, but it needed to be refined. "Aspects of the proposed design appear to suit some whānau situations better than others. We are concerned that in its current state, this design would have a disproportionally negative impact on those who are already experiencing financial instability due to more fluctuations in payment amount." She said FinCap's internal data showed most financial mentor clients had a weekly budget deficit even after they had received help. "More often than not, this deficit is due to whānau trying to pay for essentials, and commonly going into debt to do so. "This, among other markers, points to the fact that government support is not currently adequate to cover living expenses. We have concerns that some of the proposed changes would exacerbate income inadequacy in certain scenarios, particularly for whānau who need that money week to week." She said an example used in the discussion document, outlining a situation where a woman on the sole parent benefit went into additional work for a short period of time, highlighted a potentially unacceptable outcome. In that case, the woman's Working for Families credits would be reduced by $130 a week for the quarter after her temporary work, even though she was no longer in work, because the calculation was based on the higher income from the previous quarter. "We can see that the 'lagged income' mechanism makes sense from the perspective of achieving accuracy, however the potential for a decreased payment below what a whānau is entitled to poses real risk for wellbeing and social participation. "There is also a real concern over the dynamic whereby a quarterly period of higher income followed by a quarterly period of low income would see increased hardship within the low-income period, due to those payments reflecting the past higher income. "While this could be squared up during the end of year process, our data tells us that most whānau living week to week need that money as part of their weekly payments." Howard said mentors were also concerned something similar could happen if someone lost a job and went on the benefit, because their reduced income would not show up in the Working for Families calculation for another quarter. "Whānau need every cent they are entitled to in a timely manner when events such as job loss occur." A solution could be for the quarterly assessment period to look forward, rather than backwards, she said. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
