ADVISORY BOARD OF AGRICULTURE MEDIA RELEASE
Wednesday, 13 February 2008
Advisory Board Tells Banking Ombudsman of Rural Financial Hardship
Ongoing compassion, understanding and flexiblity are required by the banking sector to assist farmers in financial difficulty as a direct result of the drought, according to the Advisory Board of Agriculture.
The Board recently met with Philip Field a representative of the Banking and Financial Services Ombudsman (BFSO) to discuss the recourse for farmers who were under increasingly debt pressure from their banks.
ABA Chairman Mark Dennis said the Board explained to the BFSO that many farmers who found themselves in financial difficulty were good business people who attributed their current debt situation largely to two yars of the worst drought on record.
"To make matters worse, both the 2006 and 2007 season experienced phenomenal opening rains, which gave producers the confidence to borrow and invest in their business - but in the end that has led to increasing the debt burden," he said.
Mr Dennis said it was also important that financial institutions acted fully within the Consumer Credit Code and did not agree to loan contracts or encourage customers to increase their debt if they believed it might be difficult for those customers to meet their repayments.
"I encourage producers in financial difficulty to use the services of the Banking and Financial Services Ombudsman if they are not able to reach a satisfactory agreement with their financial institution," he said.
"Most importantly this is a free and independent dispute resolution service. The Ombudsman considers disputes between consumers and financial services providers that are members of the scheme. These include retail banks and their affiliates operating in Australia along other non-bank financial organisations."
"It is important that producers realise that there are avenues of assistance available to them."
Further information on the BFSO is available on their website www.bfso.org.au or contact them on 1300 78 08 08, Monday to Friday between 9:00am and 5:00pm AEST.
