DEBT RECOVERY: BANKS CAN HELP WITH RE-SCHEDULING AND USE LITIGATION ONLY AS A LAST RESORT Sydney, 26 November, 2001: The Australian Bankers’ Association said banks only use litigation to pursue the recovery of funds owed when all other means have been exhausted. David Bell, Chief Executive of the ABA, said banks always aim to lend prudently and to customers who have demonstrated, or that the bank believes, can afford to pay back the loan. “When taking on more debt as a consumer, I would always give some thought to how you would manage if your income was interrupted for a while or if you lost your job.” “Unforeseen change in personal circumstances such as unemployment, illness and family break up are the major causes of financial difficulties.” Mr Bell said the most important step to take if you are a customer in financial difficulty is to pick up the telephone and speak to the bank. “Banks will consider reasonable requests from customers experiencing some form of financial hardship. But banks need to be informed of individual circumstances and to discuss how they can best assist these customers.”"Depending on the customers’ circumstances, banks have deferred repayments and also looked at more suitable loan structures, when customers have approached them for assistance.” "Banks also have internal dispute resolution schemes and the Australian Banking Industry Ombudsman which can also help. Only after all other means are exhausted do banks resort to litigation to recover money that is rightfully owed.” Mr Bell said the ABA will study the report from the Financial and Consumer Rights Council and would raise with member banks recommendations that relate to better access to the justice system for bank customers. For further information contact: Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439 ENDS