Indigenous

Interviewer 1: Well last month ASIC released a financial literacy program aimed at Indigenous consumers called 'Take a minute with your money'. This campaign is part of a larger Indigenous Outreach Program, which promotes financial literacy amongst Indigenous Australians. We've got Nathan Boyle from ASIC's Indigenous Outreach Program in the studio with us to tell us a bit about the process of developing an Indigenous financial literacy campaign. Nathan's a Woragery man and analyst for the Indigenous Outreach Program since 2011. Welcome Nathan to the program.

Nathan: No worries, thanks very much for having us on.

Interviewer 1: Well, ASIC traditionally deals with regulation of companies and such, so how's ASIC got involved in this sort of the outreach program that you've done?

Nathan: Well it's quite interesting a lot of people think that ASIC purely regulates corporations and companies, but we're actually the corporate markets and financial services industry regulator. So we're responsible for a lot of consumer protection work as well, including credit, superannuation, banking and insurance. And it was recognised that Indigenous consumers, as a broad subset of the population, tend to have a much lower level of understanding of how to work with them products and services. So in 2009 an external review was conducted, and after that review they decided that we needed to have a formal Indigenous outreach program to make sure that that section of the population was having their consumer rights protected.

Interviewer 2: So in terms of financial issues within the Indigenous community, what are the major ones that they face?

Nathan: Indigenous consumers, it's important to say, have a real breadth of experience - some people are financial experts and some people really struggle with understanding the mainstream economy. But some of the biggest issues that we come across are in the book up space, which is informal credit provision in remote Indigenous communities. Where sometimes we see stores will request a consumer's key card and PIN number and then use them banking details to withdraw all or nearly all the funds from a consumers account. We see people being targeted by consumer lease providers for example, and they might be signed up to three or four or five different products on consumer leases, where they can be paying interest rates of up to 800% if they had have bought that on a credit contract.

Interviewer 2: It's naivety as well, you're educating people just to be a little bit more guarded with financial information that they're providing to potential suppliers.

Nathan: Yeah, that's right. Look Aboriginal and Torres Strait Islander people, as a broad subset of the population, have had a lot less experience in engaging with financial services than other Australians. You've got to remember that for a lot of Aboriginal people the first time they had access to their own money was after the 1967 referendum, so it's really the first few generations that have had access to that money. And then we're also dealing with some consumers that live in regional and remote areas of Australia where English might not be their first language, and they might only deal regularly with one business. But then we see these outside providers coming into the communities and signing people up to contracts that they really don't understand, they haven't had any experience with them, they haven't seen them before.

Interviewer 1: Well just a lease document can be like 10 pages long, can't it, with - depending on the lease company I suppose - with lots of very small writing in legalese which is pretty hard to understand. And people just go "oh yeah, it's fine, just sign down here and you'll have your car", that's what they tell you, so I guess it is difficult when you haven't had experience?

Nathan: Yes. That's right and we see some really predatory practices from some of these consumer lease providers. One of the ones that we looked into in particular had gotten a respected elder from the community and given them an incentive to introduce the company to other members of the community. So community members already felt comfortable to sign up, because they trusted the elder.

Interviewer 1: So it's a version of celebrity endorsement, isn't it really?

Nathan: That's right, yeah absolutely.

Interviewer 1: And I just wanted to ask you what the actual 'Take a minute with your money' campaign was that you've developed. Can you explain what… How it encapsulates what it is?

Nathan: Yeah, so ASIC's Indigenous Outreach Program has a whole number of roles, so we do everything that ASIC does in the consumer protection space. That includes investigating financial services misconduct, it includes working with industry to improve their practices, and then the third main thing that we do is produce financial literacy resources targeted at Aboriginal and Torres Strait Islander people. A lot of our resources have been paper-based and aimed at intermediaries to assist them to work with Aboriginal and Torres Strait Islander people. But we conducted a research process to have a look at the financial literacy materials that were out there and to identify some of the gaps, and what we discovered from Aboriginal and Torres Strait Islander people around the country was that there was a real gap in audio visual resources that were targeting Indigenous consumers that might not have enough literacy to be able to read our written publications. And so out of that research that we conducted and focus groups around the country, we determined that the three most important issues for that consumer group, for Aboriginal people living in regional and remote areas were consumer leasing, buying a car and renting things for their home.

Interviewer 1: Well, actually, I think we have a clip of buying a car here so we might just play that now.

Cousin 1: Hey cuz, you should get a flash new ute. With your deadly new job you can afford it. I can see us now, stylin' up around town.

Cousin 2: Yeah but I only need something to get to work.

Cousin 1: ...and maybe take the mob on that fishing trip.

Salesman: Morning fellas, I've got just the car for you. This one is perfect. I can do some special extras as well: tinted windows, a bull bar, roof racks. And with a car like this you'll be wanting all the extras.

Interviewer 1: So you can tell the sales pitch there can't you? And I guess people can identify with the two guys that are looking at buying a car?

Nathan: Absolutely, and look we've tried to use really identifiable characters from Indigenous communities and the two main characters that tell the stories across the three animations and radio plays that we've produced are Aunty B and Uncle Bob. They represent Indigenous elders, the knowledge holders and custodians of knowledge in Aboriginal communities.

So we hope that by using respected people to give these tips about taking a minute with your money, not being rushed into signing up to contracts that you don't understand, that Aboriginal and Torres Strait Islander consumers will identify with their messages and that they will be able to understand them and really think about that next time they are approached with one of these deals.

Interviewer 1: And one of the messages is, that Uncle Bob is talking about interest rates and you've got to be careful about how high they are, cause a lot of consumer finance you can get… There's a lot of sharks out there?

Nathan: Absolutely. One of the investigations that we conducted into a motor vehicle finance provider found that Indigenous consumers who were predominately receiving Centrelink as an income were being signed up to motor vehicle loans for $12,000 at 48% interest. And when we undertook the investigation into that particular provider, we found out that most of the consumers that had entered into them contracts, had no idea what an interest rate was. So not only did people not know that 48% was too high, they had no concept of what interest was at all.

So that's why it's really important that even basic consumer concepts, that we can break them down. Because if we can help the people who have the lowest level of knowledge about financial services to be able to understand the very basics then that's what our job is. Our job is protecting the most vulnerable consumers, and then we can build up from there to make sure that everyone understands them concepts.

Interviewer 1: And what sort of interest rates should they expect?

Nathan: A usual car loan would probably be around 16% interest, so 48% is kind of three times higher than that.

Interviewer 2: But they should be able to negotiate that as well. And is that part of the training process as well? Understanding that when you're going out for a loan, there is the opportunity for you to be able to make a deal if you like and reduce a rate like 16%?

Nathan: That's some of the work that we would do if we were on the ground, but we're quite a small team. We're currently six people nationally, so the resources that we produce are really around education and then we try and work with intermediaries like financial counsellors and community legal centres to give them the tools that they need to be able to run that kind of education on the ground in communities.

Interviewer 2: Now another issue that you've got obviously with Indigenous people is store accounts and I know you've produced another sort of audio visual, and we've got a grab of that book up video as well. So let's have a listen to that.

Aunty B: Before you use book up, remember these three things:

1. You decide what gets booked up. Don't get pressured by others to buy stuff you don't need, even if they are real cute. That's a lot of chocolate Billy, you're gonna have to put it back.
2. Next, check the amount you owe. So your book up account doesn't get too high, or you might never pay it off.
3. And remember, you are in charge of your ATM card. To keep your money safe, never tell anyone your PIN.

Interviewer 2: And book up's like in a remote community where you have one store. Is that where you would use a book up account?

Nathan: A very basic explanation of what book up is - it's like if you haven't got enough money to buy bread and milk and you go to the local store, you grab the bread and milk and they write it down, and you come and pay them next payday. But what we see with some of the really predatory book up practices is that they're not keeping accurate records of the store accounts and tabs. So, there's no way for the store to tell how much the consumer owes. Then they'll ask the consumer as I said before, to leave their key card and their PIN number and they'll then use them to withdraw all or nearly all of the money from the consumers account.

I guess one of the key messages we're trying to get across with that video is not to give anyone your PIN number, because that reduces your consumer protections from the bank, so if someone does take too much of your money there's no way for you to get that money back. We're also asking consumers to think about how much they are booking up and to make sure that they know exactly how much it is that they owe the store.

Interviewer 2: So Nathan, how did the Indigenous Outreach Program identify these issues in store? How was that bought to your attention?

Nathan: Book up is something that's existed for a very long time because back in the day, Aboriginal and Torres Strait Islander people were sent out to work and you might have heard of Aboriginal trust funds and stuff, where wages of Aboriginal people were paid into Government accounts. And the way that that money was distributed was by cheque that was sent to the local store. And obviously, 50-60 years ago, the postal service wasn't as good as it is now, so by the time them cheques arrived at the store, it might have been two or three weeks. People got used to booking up their food and then the store would cash the cheque and reduce the store account by however much it was from their wages. That practice is something that's kind of developed and continued, particularly in more regional and remote areas. It's a practice that people are just used to.

Interviewer 2: So the reception to the videos, how has it been to date and how do you get that sort of information out to the remote areas that may not have access to the audio visual online? So how do you do that?

Nathan: The reaction to the videos has been really good. We launched them during NAIDOC week up in Darwin, which was fantastic because some of the Indigenous Outreach Program staff members got to go to Darwin and we were able to invite members of the local community in to have a look at the videos. The way that we get it out to people in regional and remote communities is that our team constantly does work to work with our stakeholder network - so them intermediaries that I spoke about before. We provide access to the videos and the audio clips on USB sticks and CDs so that intermediaries and service providers in more remote areas have access to them even if they don't have access to the internet.

In addition to that, we conduct regular outreach trips as part of our investigative work or to run financial literacy training in remote communities and during them trips, obviously these audio visual materials that we've produced really allow us to be able to have a maximum impact.

Interviewer 1: Well, we might just take a short break there Nathan. We're with Nathan Boyle and he's behind the program for Indigenous financial literacy at ASIC. I'm Roderick Chambers, you're listening to 'On the Money', so we'll be back with you in just one moment.

Interviewer 1: Well, we're back here with Nathan Boyle, from the Indigenous Outreach Program at ASIC, something you might not have thought ASIC might be doing. I'm Roderick Chambers, I'm here with Tanya Katsanis.

Nathan, look I understand that you've currently got a couple of court cases going on, what can you say about them which isn't going to affect those court cases?

Nathan: Absolutely. We do have two court cases - one of them that I mentioned before is against a finance provider. ASIC issued proceedings in the Federal Court of Queensland against the Cairns-based operator who was offering high-interest credit contracts, as I said, to Indigenous consumers and look they were targeting one of Australia's most disadvantaged postal areas with them high-interest contracts.

The court case we've run is alleging breaches of the responsible lending obligations, as well as some instances of unconscionable conduct in relation to a series of loans that were given to consumers for the purchase of motor vehicles. That judgement has been reserved, so there's not too much more that I can say about that one at the moment.

The second case that we've got at the moment involves a book up provider in central Australia, again where they were targeting vulnerable consumers whose first language wasn't English. That case that we've taken in central Australia is actually the first time that a book up proceedings has been taken to court under the responsible lending provisions. So that judgement is also reserved. We're really interested to see the way that the court interprets the responsible lending provisions under the National Consumer Credit Protection Act and how they might apply to book up, because we think that there might be opportunities to strengthen the regulation of book up and to really bring in some further protections for the most vulnerable consumers.

Interviewer 1: And I just wanted to quickly ask, what was the role of the Indigenous advertising agency, Gilimbaa, in developing some of the content? How did that come about?

Nathan: We think it is really important to support Indigenous businesses and also that there are creative agencies and other agencies that have much better skills in the areas of producing cartoons and radio segments then we do ourselves. We contracted Gilimbaa, an Indigenous creative agency to help us really hone the concepts we wanted to get across. We provided Gilimbaa with a few key messages and asked them to work with us in developing the scripting and the characters for these resources, so that we could make sure that they were humorous and that they were able to get the message across in a way that would really engage the audience that we were targeting.

Interviewer 1: Well I think it's very engaging even though I'm not the target audience I suppose.

Nathan: The other role that Gilimbaa played for us is that they went out and conducted focus groups with Aboriginal and Torres Strait Islander people in regional, remote and urban areas throughout Australia, so that we got continuous feedback throughout the process of developing these resources.

And I just do want to mention, if I can, that anyone can have a look at these resources in the 'Take a minute with your money' campaign. We've got a campaign page on our consumer literacy website, which is MoneySmart. And the web address for that is www.moneysmart.gov.au. One of the other things that I'd really like to mention, is just one of the things that I always say in case we do have any Aboriginal or Torres Strait Islander listeners on the radio. One of the key messages that I like to get across to people is that you don't have to be your own doctor when it comes to money issues. If you've got a pain in the stomach, no one expects you to dig around and work out for yourself what's going on, they recommend that you go and see your local doctor. It's the same thing with money issues and financial issues. So if you are coming across something that you've signed a contract for, that you're struggling to afford, or you've got any questions about any kind of financial issue, then we'd encourage you to give us a call on our Indigenous helpline. And the number for our Indigenous helpline is 1300 365 957. If you call that number, you'll come straight through to one of our Indigenous specialists, they'll be able to help you out.

Interviewer 2: So all those videos that you actually have produced, they're all accessible via the website you've just provided?

Nathan: Absolutely, yes.

Interviewer 2: Fantastic.

Interviewer 1: Alright, well Nathan thanks again for coming in. Thanks for being on 'On the money'.

Interviewer 2: Thank you Nathan.

Nathan: Fantastic. Thanks very much for having us on.

Interviewer: Hello and welcome to ASIC view, the official podcast of the Australian Securities and Investments Commission. On today's episode we will be discussing ASIC's Indigenous Outreach Program, the work they're doing and what they are hoping to achieve in the future.

Joining me on the show today is Michael Saadat, Senior Executive Leader, Deposit Takers Credit and Insurers at ASIC, and Nathan Boyle, an analyst with the Indigenous Outreach Program at ASIC and a Wiradjuri man whose family is from Central West NSW. Thank you both for joining me today.

Michael & Nathan: Thank you.

Interviewer: Michael, I will start with you and we'll start with the basics, tell us about what the Indigenous Outreach Program is.

Michael: The Indigenous Outreach Program (IOP) is a team of young Indigenous lawyers and analysts located in Perth, Sydney and Melbourne, and the IOP focuses on three key areas of activity:

1. The main one as you can tell from the name is outreach - really to help ASIC understand the issues being faced by Indigenous consumers around the country, and that includes people in remote, regional and urban areas of Australia. We do outreach activities so we can understand what those issues are, and to make sure we are working on the issues that matter to Indigenous consumers.
2. In addition, the IOP does a whole series of stakeholder engagement and policy development to help shape policy to make sure Indigenous consumers are being thought of, and that policy reflects the needs of Indigenous consumers.
3. The third key area is compliance and surveillance. So where things go wrong for Indigenous consumers, where traders and firms do the wrong thing, ASIC will take action where necessary and we can talk about that a bit later. But the Indigenous Outreach Program is instrumental in making sure we are aware of the areas of misconduct that are occurring and where we identify misconduct that warrants further action, making sure that we deal with that misconduct and the consumers that are impacted in a culturally appropriate way is really important.

Interviewer: Can you tell us some of the major goals of the IOP?

Michael: Really, the IOP is there to make sure that ASIC is aware of the issues being faced by Indigenous consumers. One of the first goals is making sure we are connected to the Indigenous consumers on the ground, but also the organisations that support Indigenous consumers. So we work closely with organisations like the Indigenous Consumers Action Network, we work with financial counsellors and community legal centres to make sure we are aware of the issues being faced by Indigenous consumers.

The second thing is that the IOP is also here to help ASIC develop financial literacy materials that can benefit Indigenous consumers and that make sense to Indigenous consumers. So we're constantly looking at the materials and the resources we have got for Indigenous consumers to help equip them to make good financial decisions into the future.

The third thing is to make sure ASIC staff are aware of Indigenous issues and that when we are dealing with consumers more generally that we are also thinking about the needs of Indigenous consumers. Part of that includes rolling out cultural awareness training and also fitting into ASIC's reconciliation action plan.

Interviewer: Nathan, as a member of the team, can you tell us a little bit about how the IOP works to achieve its goals?

Nathan: Yeah, I guess one of the key things about the IOP is that Aboriginal and Torres Strait Islander people are always central to our work. So we recognise that Indigenous consumers are the experts in issues that affect them and they can often be the best people to recommend solutions to the problems that are impacting on them. So as Michael has outlined, in terms of our outreach work and the other work that we do to help address some of the barriers that Aboriginal and Torres Strait Islander people can face, when interacting with financial service providers.

In terms of the investigations that we do, a lot of the reports of misconduct that we receive come directly from Indigenous consumers or they come to us otherwise through Indigenous consumers advocates. Our IOP remains the central contact point for any Indigenous consumer that has reported misconduct to us throughout the course of any investigation that might be running.

Our team also works with ASIC's enforcement teams to make sure the investigations are conducted in a culturally appropriate way wherever possible.

And we also try and support Indigenous consumer witnesses so they can be comfortable when they're providing evidence in court, or evidence to ASIC officers as part of an investigation.

The other thing we do, which I think is really important from our team's perspective in terms of investigations, is follow up with the community once a result is achieved, so that they know what the outcome was of the process they participated in.

Interviewer: What are some of the issues you're facing in the process of trying to get this work done?

Nathan: Oh look, there's a whole range of barriers that we can face in terms of this work. We've just got to be really aware that, for some Aboriginal and Torres Strait Islander people, there are lower levels of financial literacy and lower levels of interaction with commercial agreements. So, I guess what we recognise in the IOP is that there's a whole breadth of difference in the Aboriginal and Torres Strait Islander community, and we have some Aboriginal and Torres Strait Islander people that are very financially savvy and have a whole range of financial products and services that they regularly engage with.

So what we need to do is make sure we're tailoring our information to meet the needs of those people, but also understanding some of the vulnerabilities that our more remote and regional Indigenous consumers face, who might not have had the same opportunity to interact with financial products and services as other consumers, and might not have so readily entered into commercial agreements in the past.

Interviewer: Understanding that different individuals and different groups and different communities are going to have different needs, and it's not a sort of 'one size fits all' approach.

Nathan: Absolutely. And, in terms of doing investigations where they are in particularly discrete Indigenous communities, it's really important that we work with the community and understand how they want us to approach an investigation.

Interviewer: Yes. Can you tell us about some of the significant outcomes that the IOP has achieved to date?

Michael: As Nathan said, the IOP helps when we're running enforcement cases, and we've got a couple of really big matters that we're awaiting judgement on, so I can't say too much about them. But we're waiting on judgement in one matter out of North Queensland involving a motor trader who provided car finance to Indigenous consumers. And we're also waiting on judgement on a matter in a remote part of South Australia in an area known as the APY lands, where ASIC has taken action against a store owner for providing credit to Indigenous consumers to buy basic household goods.

So those cases are complex cases, they're run in remote and regional locations, and they're difficult to run, and they've been a huge challenge for ASIC to bring those cases, and we're really looking forward to those judgements because we think that the courts have a really important role to play in clarifying what the legal obligations are and, where law reform is required, that we're doing that on an informed basis.

The second key achievement I can talk about is the work that has been done in the superannuation space. So the team has been doing some fantastic work on superannuation, including working with large super funds to better help those super funds understand the needs of their Indigenous customers, including Indigenous consumers based in very remote areas who have superannuation but have a lot of difficulty accessing that super. The team have been running workshops with super funds to help build that understanding within the super funds so that their interaction with their Indigenous customers can be improved.

And the third area is around the area of book up. I mention book up because it is quite an important issue for Indigenous consumers, particularly in remote and regional areas. Book up is a form of credit - it's a bit like running up a tab in a store - and Indigenous consumers can often run up against some pretty poor practice when using book up. The team have done a fantastic job, both identifying the challenges faced by those consumers - so we issued a public report in the last couple of months on the issue of book up - but also in identifying poor practice and making sure that ASIC responds appropriately to that.

Interviewer: Nathan, what are some of the IOP's key areas of focus going forward in the foreseeable future?

Nathan: ASIC's IOP run a helpline (Ph: 1300 365 957) and an email account (email: iop@asic.gov.au) where we receive reports from Indigenous consumers directly, and that's one of the key things that drives our work is understanding what the issues are that are facing people on the ground.

The issues we get through that helpline and email service are usually around credit, banking, superannuation and insurance. Some of the key areas of focus from the information that we've received from Indigenous consumers are increasing our education - particularly the education we provide around financial literacy issues impacting on Indigenous consumers in remote and regional locations. As part of the work that we're doing on that, we'll be releasing a series of animations later this year that focus on the key areas of book up, motor vehicle finance and consumer leasing. ASIC's IOP worked very closely with our financial literacy team in the development of those videos and we made sure that we consulted with Indigenous communities to find out, firstly, what the key issues were for them and, secondly, to make sure that the animations that we created were relevant to them and helped them to better understand the issues.

We're also going to continue on the superannuation work that Michael mentioned earlier. We want to build on the previous success of our work in being able to highlight the issues that Indigenous consumers face in accessing and engaging with their superannuation. One of the ways we have done that to assist industry in better understanding the issues is to take representatives from some of the key funds out on the ground with us, because having senior people from the funds experience first-hand the issues that Indigenous consumers face, can really help them to understand what it is they need to change about their own practices and procedures to address and eliminate some of the barriers.

The first area that we took superannuation funds to was a remote Indigenous community in Far North Queensland. But through some of the other work we've been doing in the Central Desert part of Australia is that we've identified that Indigenous consumers there have a range of needs that are different to those consumers that we first took industry to, so we really want to take them out into the Central Desert to have them be able to see some of the barriers consumers face on the ground. We're hoping, within the next 12 months, to be able to take a number of funds to the Central Desert region to help people on the ground to access their superannuation benefits, and also to run a series of education sessions so that we can help consumers in that area better understand what superannuation is and how it can benefit them.

Interviewer: Nathan, just in reference to that phone line and email address you mentioned before, people can report things to ASIC, what are some of the common issues that get reported to us?

Nathan: Some of the most common reports that we receive tend to be from consumers who are having issues with access to their banking services. So for example a consumer may have misplaced their key card and is having trouble identifying themselves to their financial institution in order to obtain a replacement.

We also receive high volumes of calls about debt collectors, expensive credit contracts and consumer leases, and also just a range of general calls looking for support where a person might be struggling with their personal finances and might be looking for an avenue to go to get that assistance. Where we receive calls that are not necessarily within ASIC's jurisdiction, the IOP helpline staff will make sure that we support that consumer to get in contact with an agency that can provide them with that assistance.

I guess one of the other things that I also should mention about some of the work we've got coming up in the future, is that ASIC's Indigenous Outreach Program is about to undertake a project reviewing the practice of the life insurance industry - particularly looking at the way they sell life insurance to Aboriginal and Torres Strait Islander people over the phone. We want to have a look at whether there are any opportunities for industry to improve their practices and processes in selling life insurance over the telephone, and we also want to make sure that there isn't any significant misconduct impacting on Indigenous consumers.

Interviewer: Brilliant. Michael, Nathan, thank you so much for joining me today.

Michael: Thank you.

Nathan: Not a problem.

Interviewer: Aboriginal and Torres Strait Islander consumers can visit our ASIC MoneySmart page if they would like further information and advice. The page has a section specifically for Indigenous consumers. Just Google "MoneySmart" and "Indigenous" to find it. Thanks very much for listening to the ASIC podcast, we'll bring you another episode very shortly.