Credit and Debt

Credit and Debt

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Case study 4: telecommunications debt

John’s telecommunications debt (internal dispute resolution)

John’s circumstances

John was a 30 year old man who was suffering from a number of chronic medical and psychological conditions. He was unemployed and living in community housing. His main source of income was a Disability Support Pension.

John’s instructions

John sought assistance from Homeless Law in relation to a $1200 debt he owed to a telecommunications company for a home phone bill.  The debt had been incurred about one year ago when he was living in transitional housing outside Melbourne. A lot of the debt was for late payment fees. The telecommunications company was threatening to disconnect John’s home phone.

John instructed Homeless Law that the phone company had not explained to him that phone calls from her home to Melbourne were charged at a long distance rate when he signed the phone contract with them.

Steps taken in John’s matter

  • John’s Homeless Law lawyer contacted the telecommunications company and obtained a direct number for a staff member in the company’s hardship team.  John’s Homeless Law lawyer put the company on notice that she was acting for John and that he was a vulnerable client. John’s lawyer also negotiated with the hardship team member to have disconnection of John’s phone line put on hold while negotiations were taking place. The lawyer requested that a note was put on the company’s system reflecting this agreement.  John’s lawyer recorded this conversation in this file note.
  • John’s Homeless Law lawyer then sent this letter to the contact person in the phone company’s hardship team, which attached the Authority to Act. The letter confirmed in writing the agreement that the threatened disconnection of John’s phone line had been put on hold while negotiations were taking place.
  • Finally, John’s Homeless Law lawyer wrote this letter to the telecommunications company in accordance with John’s instructions.  The letter requested that:
  • John’s debt be reduced by waiving all late fees;
  • all long distance fees for calls from John’s home to Melbourne be waived (on the basis that the costs had not been explained to John); and
  • the remaining debt be paid in instalments by John at a rate of $30 per fortnight.

These requests were made on the bases that: John experienced significant financial hardship and would find it almost impossible to repay the full amount or to pay a lump sum amount; $30 a fortnight was the maximum John could repay while still meeting his essential living needs; and the company had failed to explain to John that calls from his home to Melbourne were charged at long distance rates.  John’s Homeless Law lawyer also attached the letters of support from John’s social worker and mental health worker, which outlined John’s physical, mental and financial hardship.

Outcome

The phone company agreed to reduce John’s debt by $1000 and to establish the payment plan requested for the outstanding amount. 

John set up a Centrepay deduction to repay the arrears and was able to maintain his ongoing payments for his phone line and internet.