Case Study 1

Complaint: Ms A saw an advertisement in the paper for a service offering loans to bankrupts and those with a poor credit history, with no application fees. Applications were via a 190 number, charged at $5 per minute. She called the service twice, and tried to speak to a manager to find out if it would be worth her while applying for a loan. On her third call she answered the application questions asked by an operator on the service, and was asked to call back with further information. She did this, often repeating information at the request of the operator. She was told to call back on the 190 number to check on the progress of her application, and received a fax from the company explaining that when her loan was approved, an administration fee of $98 would be payable. Her loan application was initially unsuccessful, however she was told that the company made three attempts to arrange a loan, and asked if she wished to continue. She agreed, but her application was ultimately not approved. She was charged approximately $350 for her calls to the service.

Action taken: Ms A contacted 190 Complaints stating that she felt that she was misled by both the advertising used to attract her application, and by the information provided to her on the service. She also felt that she had been deliberately delayed by lengthy and unnecessary questions by operators on the service.

190 Complaints investigated the advertising and content of the service, and the Arbitrator contacted the 190 service provider pointing out that the advertising was misleading in two ways, firstly for promoting loans to those least likely to qualify, and secondly for stating that no application fees applied when applicants were charged $5 per minute to apply, and furthermore charged an administration fee of $98 if successful. Also outlined was the outcome of 190 Complaints’ investigation of the service, which found it to be unnecessarily delayed by inefficient operator performance. Possible breaches of the Code of Practice, paragraph E.4 (misleading advertising) and paragraph B.2.1 (delays in service delivery) were identified.

The 190 service provider offered to refund Ms A, and outlined the steps taken to rectify the problems on the service. The Arbitrator found the service in breach of the Code of Practice, advised Ms A of the offer of a refund, and, in view of the seriousness of the breaches, recommended to Telstra that the service be suspended. The service was subsequently suspended.