MR HOCKEY: It has been brought to my attention that despite a number of One-Tel customers asking their banks to stop direct debits, payments are continuing to be made by One-Tel customers to One-Tel after the service is no longer provided.
The banks are on notice here, that if a customer says the direct debits are to stop, they are to stop, the customer rules. And in this case, of a customer of One-Tel is saying to their bank that direct debits have to stop, then they have to stop and any other arrangements are between the individual and One-Tel.
QUESTION: What is the extent of the problem...
MR HOCKEY: We are starting to get reports that it has happened on a number of occasions right across Australia form One-Tel services. That customers have approached their financial institution and asked their financial institution to stop their direct debit, and those financial institutions have continued to pay One-Tel, after a service is no longer provided. I have written to both the administrator of One-Tel and to the Australian Bankers Association, letting them know that this is unfair to consumers, it is outrageous that they are denying consumers the right to close down direct debit facilities in the banks...
QUESTION: which banks...
MR HOCKEY: I'm not going to name the banks, I don't think it is appropriate to disclose them be cause I don't think it is limited to just one or two banks..
QUESTION: How much money are we talking about...
MR HOCKEY: Well we are talking about customers that have had direct debit accounts with One-Tel for the provision of mobile phone services. It has been reported to me now on about 10 occasions it has come to me directly, but I understand it is increasingly widespread.When a company goes into administration and services are no longer provided, consumers deserve protection and they deserve protection from their banks when it comes to direct debit payments...
QUESTION: If a bank does the wrong thing , should they pick up the bill...
MR HOCKEY: Well the banks need to consider their position on that. As soon as we can get some more information from consumers about how far this problem has gone.
QUESTION: Do consumers have any legal recourse...
MR HOCKEY: Legal recourse should be available to consumers through their individual contracts with One-Tel, however I do urge consumers to call the banking industry ombudsman if there is any suggestion that the banks are holding back on providing an immediate cessation of direct debit services.
QUESTION: Have you contacted the ombudsman...
MR HOCKEY: My office has contacted the Ombudsman, he has been aware of the issue, he has received some information form consumers and is progressing it.
QUESTION: Can the money be retrieved form One-Tel, the money that has already gone through...
MR HOCKEY: Well the administrator has indicated that there are some circumstances where it may be available to consumers, at the moment he has also indicated that there are some circumstances where payments may have been made for services already provided. In those circumstances, it may be justified. I am concerned about the interaction between consumers and their banks and in any circumstances where consumers direct their banks to stop direct debit payments, then the banks have to stop those payments and not continue them.
QUESTION: Can yo put a dollar value on how much has been lost ..
MR HOCKEY: These are reports that have been coming to us over that last two days, we have been able to verify the information about them, as I said, last night I wrote to the administrator, I wrote to the Australian Bankers Association, my office has been in discussion with them. They are on notice, that in this case, consumers rule. If consumers are telling their banks to stop direct debit payments then the banks have to stop direct debit payments.
QUESTION: Any reason why the banks are doing it...
MR HOCKEY: We are waiting to hear from the banks.
Okay.