SIGNING FOR YOUR RELATIVE OR FRIEND
Companies which provide
services, or banks which provide loans, need to feel confident that the person
they give credit to will repay the amount due at the time agreed.
Some people have trouble getting services and loans because they:
- don’t have an income, or have a low income
- haven’t borrowed before and don’t have a credit history
- have borrowed before, defaulted (failed to make a repayment) and
have a bad credit rating.
In these cases, the company lending or providing the service may ask for a
person to guarantee to pay the telephone or internet user’s debt if he
or she should default on a payment obligation. Often, young people ask their
parents or grandparents to act as guarantor. Sometimes, new Australian residents
ask family or friends.
The person asked to sign may need to provide information similar to the person
applying for the product or service, including income and asset information,
and their own credit rating is checked. This is because if you are asked
to sign an application or contract, you are accepting liability - primary responsibility
for fulfilling the obligations under the contract, including paying the bills.
It is important to be confident that the person asking you to take responsibility
is capable of paying the debt you’re being asked to cover. If the person
doesn’t pay, you will need to make the payments agreed under the contract.
If you can’t pay this amount yourself, your own credit rating will suffer.
WHERE TO GO FOR HELP
If you are concerned about a contract
you signed for your relative or friend, contact the company which provides
the service immediately. You can always contact the company by telephone or
in person, but it is best to write to your service provider to record your
complaint and their response. If you can’t
sort out the problem, don’t receive a reply or you’re not satisfied
with the response you receive, you can make a complaint to the TIO (go to
www.fairtel.org.au/complain.asp
for contact details). If you
believe that you were mislead, mistaken or pressured into signing a contract
you may also complain to the ACCC or your local Fair Trading or Consumer Affairs
office (go to
www.fairtel.org.au/complain.asp
for contact details).
