Struggling Queenslanders turned away by financial counsellors

Queenslanders in financial despair are being turned away by independent counsellors, prompting pleas for the state government to step in.

Queenslanders in financial despair are being turned away by independent counsellors due to a severely stretched workforce, prompting pleas for increased state government funding.

The state is currently only serviced by 29 full-time registered financial counsellors amid the cost of living crisis, according to a new report exclusively revealed by The Courier-Mail.

The dire shortfall of experts available to assist is less than half of the professionals available in each of NSW and Victoria and comes as Queensland is gripped by record mortgage stress, nation-leading bankruptcies and small business failures.

The Financial Counsellors’ Association of Queensland (FCAQ) has outlined the current funding shortfall in its new report and will write to Steven Miles to request a meeting with the Premier.

The association’s chief executive, Jon O’Mally, said the network of experts are employed by not for profit agencies fully funded by governments, with a 60:40 split between federal and state.

He said the crippling increase in living costs had left many in need of support as counselling services dealt with a “new type of clientele”.

FCAQ chief Jon O'Mally. Picture: Brenden Radke

“They are more complex,” Mr O’Mally told The Courier-Mail.

“We’re dealing with mortgage stress, there’s more presenting issues around gambling, and there is more presenting issues around domestic violence — so our services are under the pump.”

Mr O’Mally said the state had the lowest funding per capita for financial counselling services, leaving many vulnerable Queenslanders to resort to more expensive or risky alternatives.

He said a survey revealed more than 60 per cent of clients had buy-now, pay-later products in their bank statements, which had soared from about 20 per cent five years ago, while reliance on high-interest charging payday lending products are also being used more frequently.

The association’s chief executive said “never has free, qualified and independent financial counselling been so crucial”.

“There are a lot of vulnerable people out there – people who could lose a home, a rental property, or face other heartbreaking circumstances without financial counselling. It can benefit people in the tens of thousands of dollars,” Mr O’Mally said.

“I’ve just spoken to an agency that have closed their books and they have 150 clients on their waiting list.

“We urgently need an extra $15 million in state funding for financial counselling.”

The FCAQ will write to Steven Miles to request a meeting with the Premier. Picture: Steve Pohlner

The Premier refused to reveal if the services would receive increased funding, instead repeating previous assurances the upcoming budget would include a boost to cost of living support measures.

“These will build upon on our existing cost-of-living measures that are aimed at easing financial stress in the community,” Mr Miles said.

“Any request for funding will be given proper consideration in due course.”

YOUNG MUM IN SOCIAL HOUSING SOLD UNDRIVEABLE CAR

A young mother Tiffany faced unjust conduct from a car dealer, leading to a mediation outcome with AFCA that waived her $10,000 debt and required the dealer to collect the vehicle, removing all impacts on her credit file. The DFV financial counsellor raised the issue with lender for a debt waiver based on compassionate grounds, escalated to AFCA due to irresponsible lending practices.

Legal support was sought to address unconscionable conduct allegations. AFCA highlighted inadequate affordability assessments and lack of client objectives alignment. Tiffany’s financial situation, including DFV impacts, public housing, and a cycle of debt, was not considered in the lender’s assessment. Critical aspects like insurance, vehicle value, and contract terms were overlooked, leaving the client in a vulnerable financial position with an undriveable vehicle.

PENSIONER FLOOD VICTIM FACED MORTGAGE ARREARS

A 74-year-old pensioner affected by the 2022 floods in Southeast Queensland sought financial counselling six months later. Mary faced mortgage arrears due to paying for temporary housing during home repairs. The financial counsellor discovered her lender’s long-term overcharging on mortgage interest rates. Negotiations resulted in waived arrears and settlement of her mortgage six months early. Mary used the excess funds for rental accommodation. With insurance, her home was repaired within 18 months. Now debt-free, she owns her home outright, thanks to the financial counsellor’s assistance

TEACHER CRIPPLED BY $50,000 SCAM

Helen, 44, a Queensland teacher, resides in a rural area in a caravan on a friend’s property. Seeking extra retirement funds, she fell for a Facebook ‘investment broker’s’ Bitcoin scheme promising to double her money. Coached by the broker, she fraudulently applied for a $50,000 home loan on a non-existent property. Despite red flags, the lender approved the loan, and Helen’s bank processed the dubious overseas transaction.

Helen sought help from a financial counsellor, who discovered that the lender and Helen’s bank lacked proper safeguards against financial harm. The financial counsellor lodged a complaint with AFCA, resulting in manageable repayments for Helen but no refund of her lost money.

Originally published as Struggling Queenslanders turned away by financial counsellors