We often talk with people that have had a negative credit listing recorded on their credit file due to a change of address.
When people first move into a property one of the first things they typically do is arrange for a phone and power connection. If at a later date that person has a change of address again and does not arrange to close or finalise the account, the telecommunication or energy company will continue to issues bills and ultimately demand notices to the address the services were connected to. Naturally if the person has moved and has not arranged a mail redirection or they had not informed the company of their new whereabouts they would not receive any of this correspondence and given the account remained outstanding they could end up with a payment default being recorded on their credit file, often without them even knowing about it.
As the director of a credit repair company, Clean Credit Pty Ltd, I can quote with confidence that this scenario is very common. Many people think that a credit provider needs to try and track them down or try to contact them by phone or email, however in reality all they are legally required to do is provide a correctly structured demand notice to the last known address for the client, nothing more. It is in your hands to alert your creditor to a change of address.
Missed Bills after Change of Address
This can be particularly hard to fathom for people when a mobile phone account is in question. It would be fair to assume that the telecommunication company would have the phone number and given this was still active, one call from the company to the client could solve the problem long before it turned into an issue. While common-sense would suggest it would be a good idea for the credit provider to try and call their clients with regard to an outstanding balance, the truth is because they are not legally obliged to do this they often don’t and they simply rely on mailing notices to an address that the person no longer resides at. This is often how payment defaults end up affecting people when they had no knowledge there was even a problem. You can imagine how outraged some people get when they are refused finance due to an event they knew nothing about.
Final meter readings with energy companies can also cause issues. Many people will contact the supplier to let them know they wish to finalise the account and pay the last bill they receive. Once they pay this last bill and finish change of address they naturally don’t give the matter a second thought. Often people later find out there was a final meter reading and there was a further amount owed, this unpaid amount can easy end up being listed on their credit file as a default.
Avoiding Defaults from Companies
The key to avoiding defaults from telecommunication companies and energy suppliers when you have a change of address is to be proactive and don’t assume they will contact you if money is owed. Make sure you call them and let them know your new address and contact numbers. If possible send them a letter or email with your new contact details so you have a record to refer to later if there are any problems.
When making contact with the creditor to let them know you have a change of address, ensure you ask them if the amount you are intending to pay is actually the amount required to finalise the account in full and ask them to forward any future correspondence to your new address.
Credit Providers Make Mistakes
Unfortunately even when people do all this mistakes still happen. Sometimes the credit provider doesn’t update their records and continues to send letters to the old address even when they have been informed of new forwarding details. Sadly this happens quite regularly and people often end up with an adverse credit listing even when they have done all the right things. Even though in these cases the offending credit listing could be contestable and shown to be invalid, the fact is Australia’s credit reporting platform is very much a guilty until proven innocent process meaning once a default is recorded it is up the victim to prove their innocence which can often be easier said than done.
This being the case it is very important not to assume anything and contact the creditor and make sure the account you want to close is actually closed.
John Dickinson
Clean Credit Pty Ltd