FSCL Top Four Financial Holiday Tips
After a challenging year, consumers are ready for a much-needed break. Dispute resolution service, Financial Services Complaints Limited (FSCL), has some handy tips from cases investigated, that will ensure you don’t find yourself caught out financially over the festive season.
Do not leave valuable items unattended
We love the freedom of summer holidays – but thieves can quickly ruin a day in the sun. In one case FSCL investigated, when Diya and her friends went swimming at a popular beach she left her phone, under her clothes, on a camping chair.
When Diya got back to her chair her phone was gone. Diya made an insurance claim, but the insurer declined the claim saying that she had left the phone unattended in a public place, so the loss was not covered by the policy.
FSCL agreed that, under the policy, the insurer was entitled to decline the claim.
FSCL’s tip: Even though you might have insurance you must take care to protect your belongings. If you have left your belongings unattended on a beach or in a park, even if you’ve tried to hide them, your insurer is very unlikely to pay a claim.
Check your account statements regularly
Christmas and summer holidays can be a busy time for you and your credit card. Make sure you check your account statements regularly because if you spot a transaction you did not make, you must let your card issuer know, usually within 120 days to be able to reverse, or chargeback, the transaction.
Credit card terms and conditions of use also often place an obligation on the cardholder to check their account statements regularly.
In another case FSCL investigated, Shyla did not notice until early 2021 that someone had been using her credit card since 2019 to make online purchases she knew nothing about.
When Shyla told her credit card provider that her card had been used fraudulently, they cancelled the card and refunded the most recent transactions, worth $380, but said those beyond 120 days could not be reversed.
In Shyla’s case there was some delay within the card issuer’s transaction dispute process, so the card issuer agreed to refund transactions back to 133 days, increasing the compensation to $3,360, as well as the interest and fees that had accrued, $1,340. Shyla accepted this resolution.
FSCL’s tip: Check your statements regularly and if you spot a transaction you did not make, tell your card issuer immediately.
If you are experiencing financial difficulty, talk to your lender as early as possible
This year has been tough on many New Zealanders, and the law requires all lenders to have a hardship process to help borrowers get through financial difficulty.
If your personal circumstances change, perhaps you have fewer hours at work, you experience a relationship breakdown, or you become unwell, tell your lender immediately. Don’t wait for the change to impact your finances.
If you need help submitting a hardship application, contact MoneyTalks on 0800 345 123. They are a free service and will be able to put you in touch with a financial mentor.
Laaka had two credit cards with the same lender, and over the years had accumulated $16,000 worth of debt. When Covid-19 hit she was unable to afford the minimum payments due.
The lender tried for three months to reach Laaka by phone and had been sending monthly statements. After four months of no payments the lender cancelled both cards. Laaka complained to us that the lender had not written to her advising the cards would be cancelled.
We agreed that it was reasonable for the lender to cancel the cards and refuse to reinstate them. We helped the lender and Laaka agree to an interest and fee free repayment plan at an amount that she could afford.
FSCL’s tip: No one wants a bad debt and, in our experience, lenders would much rather have a repayment plan than take recovery action.
Check your car insurance before you let someone drive
Over the summer we can be out and about, following different routines with different people.
It’s easy to imagine giving car keys to someone who does not usually drive your car without a second thought to the implications this might have for your insurance cover.
Earlier this year we investigated a complaint where Wiremu allowed a friend to drive his car. Wiremu was following in another car and witnessed the accident that killed his friend and wrote off his car.
Wiremu’s insurer declined the insurance claim because Wiremu’s friend was not a named driver on Wiremu’s policy. Because the car also secured a loan to a finance company Wiremu was left repaying a debt with no car to show for his payments.
Although the complaint to us, lodged by Wiremu’s uncle, was that the loan was unaffordable from the outset, the lender could see that Wiremu had been deeply affected by the accident and, on compassionate grounds, agreed to write off Wiremu’s debt.
FSCL’s tip: Check the terms of your motor vehicle policy before heading off for the summer. If you think someone else might drive your car, make sure they are either listed on the policy, or that the policy will cover unnamed drivers.