All the more reason for a Royal Commission......regulators knew yet did nothing to stop it... SPLIT LOAN SHAM
New-Loan launches tax-effective loan
08/08/2002
http://www.infochoice.com.au/home-loans/news/new-loan-launches-tax-effective-loan/20673/2/16
New-Loan has launched the Tax-Smart All-In-One Loan to take advantage of the High Court ruling in favour of split-loan products. The new line of credit loan allows home buyers with other investments to pay off their home loans within five to six years. However, the news that the ATO will appeal the ruling brings uncertainty to the future of this product. These split-loan packages combine a home loan and an investment account into one package, and allows borrowers to use their available cash flow to pay off non-deductible debt first. Repayments on the investment account can be deferred until the home loan is paid off. Tax-Smart All-In-One can accommodate up to six separate loan accounts. Loans can be segregated according to their purposes, such as property investment, share trading, business or personal use. The borrower can select which account he repays and which he defers repayments on. As an example, a $250,000 home loan could be combined with a $350,000 investment loan, at an interest rate of 6.69 per cent over a typical home loan term of 25 years. The home loan portion could be paid off in six years and a quarter years, saving the borrower over $400,000 in repayments. He could also claim an extra $206,000 in tax deductible interest. Other benefits of the Tax-Smart All-In-One Loan: a zero interest Visa card; unlimited free ATM and EFTPOS transactions; unlimited free Internet and phone banking; salary crediting and cheque facility.
Split investment loans tax deductible
29 July 2002
http://www.infochoice.com.au/home-loans/news/split-investment-loans-tax-deductible/20597/2/16
The Federal Court has ruled that interest on split mortgages for investment properties is a legitimate tax deduction. This a breakthrough for investors and also a boost for negative gearing. Where one loan is split across two properties, the borrower’s own home and an investment property, this allows the borrower to pay off the residence quickly and defer payments on the investment property. Repayments on investment properties can be postponed until residential housing mortgages are paid off for maximum tax deductibility. Interest on the investment property mounts up but can be claimed as a tax deduction. The ruling is a blow for the Tax Office, which issued a ruling five years ago to disallow the practice. The ruling could also affect small business owners who allow overdrafts to build up so they can use it to pay bills or for other purposes. The ruling does not apply to 100-percent owner-occupier loans which are simply split between fixed and variable rates.
Credit Corp thrives on consumer debt blow-out
04/09/2002
Debt collector Credit Corp Group, which listed on the ASX in July 2000, is doing well out of the blow-out in consumer debt. The company reported a 44 per cent rise in net profit to $2.12 million yesterday, with a final dividend of 2.5 cents fully franked. The return on shareholders' funds for the year was 26.7 per cent. Credit Corp's core business is buying the debt ledgers of banks and other companies at a fraction of the face value of the debt totals, then using its recovery expertise to collect as much as possible. Last year, the company bought new eight debt ledgers with a face value of around $34 million for just $3.3 million.
Victoria to regulate debt collectors
15/07/2002
The Victorian Government will introduce new guidelines and tighter controls to regulate the debt collection industry. Consumer Affairs Minister, Christine Campbell, said there has been a rash of consumer complaints and several debt collection agencies are under investigation for the methods they use. The number of incidents involving collection attempts based on inaccurate data is increasing, Ms Campbell said. Debtors and consumer advocacy services have reported incidents of collection agencies attempting to collect debts that have been previously paid, failing to provide proof of debt, collection of debts that have legally expired, misleading consumers and ignoring requests that contact be made through a solicitor or financial counsellor. Banks and finance companies are increasingly handing their debt collection activities to large external companies. Ms Campbell said she's concerned that the most vulnerable people are at the mercy of these firms. But consumers must be aware of their obligations, she stated. They should not ignore notices from collection agencies or courts, but respond quickly by seeking advice, indicating whether the claim is accurate or not, or arrange payment terms. If people don't act quickly it can lead to further claims for payment and compounding debt. The Consumer Credit Legal Service said that many companies are "selling" their debts to other companies. Behaviour by some of these firms goes beyond "undue harassment" but is not covered by the legislation, the service said. Many consumer complaints relate to the agencies ignoring claims that the money is not owed.