Investigation Report No. 3214

File no. ACMA2014/374

Broadcaster Australian Broadcasting Corporation

Station ABS (ABC 1)

Type of service National broadcasting service (television)

Name of program 7.30

Date of broadcast 9 December 2013

Relevant code Standards 2.1, 4.1, 4.5, 5.1 and 5.3 of the ABC Code of Practice provisions 2011 (revised in 2013)

Date finalised 17 December 2014

Decision No breach of standard 2.1 [accuracy] No breach of standard 4.1 [due impartiality] No breach of standard 4.5 [unduly favour one perspective over another] No breach of standard 5.1 [participation] Breach of standard 5.3 [fair opportunity to respond]

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 Error: Reference source not found The complaint In May 2014, the Australian Communications and Media Authority (the ACMA) commenced an investigation into a complaint about a segment on 7.30, broadcast by the Australian Broadcasting Corporation (the ABC) on ABC1 on 9 December 2013. The complaint, made by lawyers acting for MyBudget Pty Ltd, is that the segment breached standards 2.1, 4.1, 4.5, 5.1 and 5.3 of the ABC Code of Practice 2011 (revised in 2013) (the Code). In summary, the complaint is that:  The segment contained ‘numerous inaccuracies and reasonable efforts were not made to ensure that these inaccuracies did not arise’.  The segment demonstrated a lack of impartiality as two former clients of MyBudget ‘were afforded the opportunity to provide their version of events regarding their interactions with MyBudget, however, MyBudget was not afforded the opportunity to provide information as to what happened in each case…’  Ms Tammy May (MyBudget Founder and Director) ‘was not informed of the general nature of her participation in the interview prior to attending. She was deceived’.  The segment ‘broadcast specific allegations of financial mismanagement by MyBudget without obtaining [MyBudget’s] response to those allegations’. The ACMA has considered the ABC’s compliance with standards 5.1 [general nature of participation], 5.3 [opportunity to respond to allegations], 2.1 [reasonable efforts to ensure material facts are accurate and presented in context], 4.1 [gather and present information with due impartiality] and 4.5 [unduly favour one perspective over another] of the Code.

The program 7.30 is a current affairs program described on the ABC website as being:

[…] The best analysis of local, national and international events from an Australian perspective, weeknights on ABC1. 1

On 9 December 2013, the program included a segment titled ‘The businesses cashing-in on people under financial stress’, which was a report about the rise of budgeting companies and concerns expressed by financial counsellors and former MyBudget customers that these companies profit from people who are struggling with debt. The segment included interviews with:  two former MyBudget clients (L and W)  Ms Tammy May (MyBudget Founder and Director)  a financial counsellor from the Salvation Army  the Executive Director from Financial Counselling Australia  a representative of the Consumer Credit Legal Centre. A transcript of the segment is at Attachment A.

1 http://www.abc.net.au/7.30/about.htm

2 Assessment

This investigation is based on submissions from the complainant and the ABC and a copy of the broadcast provided to the ACMA by the ABC. Other sources used have been identified where relevant. The complainant has expressed concerns with both the processes used in the preparation of the broadcast, including information given about the nature of her participation, and the accuracy of the material that was broadcast. In terms of material that is broadcast, in assessing this against the Code, the ACMA considers the meaning conveyed by the relevant material. This is assessed according to the understanding of an ‘ordinary, reasonable’ listener or viewer. Australian courts have considered an ‘ordinary, reasonable’ listener or viewer to be:

A person of fair average intelligence, who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal. That person does not live in an ivory tower, but can and does read between the lines in the light of that person’s general knowledge and experience of worldly affairs.2

The ACMA considers the natural, ordinary meaning of the language, context, tenor, tone, visual images and any inferences that may be drawn. In the case of factual material which is presented, the ACMA will also consider relevant omissions (if any). Once the ACMA has applied this test to ascertain the meaning of the material that was broadcast, it then assesses compliance with the Code.

Issue 1: Fair and honest dealing

Relevant code provisions

5. Fair and honest dealing

Dealing with participants

5.1 Participants in ABC content should normally be informed of the general nature of their participation.

Opportunity to respond

5.3 Where allegations are made about a person or organisation, make reasonable efforts in the circumstances to provide a fair opportunity to respond.

Submissions Relevant extracts from the submissions of the complainant and the ABC are at Attachments B and C respectively.

Finding The ABC did not breach standard 5.1 but did breach standard 5.3 of the Code.

2 Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 at pp 164–167.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 3 Error: Reference source not found Reasons Dealing with participants The complaint is that:

[…] the ABC was not frank as to the purpose of its interview with Ms May prior to its occurrence. The ABC indicated that it wanted to hear Ms May's perspective on today's trends regarding Australians facing financial difficulty, and how MyBudget deals with this issue. At no stage prior to [the] interview were [the] allegations [that were] made by anyone regarding the conduct of MyBudget mentioned.

The relevant provision of the Code is standard 5.1:

5.1 Participants in ABC content should normally be informed of the general nature of their participation.

The ABC has submitted that:  ‘there was no editorial requirement for the program to set out in precise detail every issue or question that may be raised during an interview, including specific customer complaints’  ‘7.30 adequately provided MyBudget with the general nature of its participation in the report’  ‘…it was made clear to MyBudget that there may be further questions, depending on the comments of Ms May and any other issues or information that may arise during the program's research’. On 22 November 2013 the reporter wrote to MyBudget with the following request:

As Christmas approaches we were hoping to do an interview with your founder Tammy May to hear her perspective on today’s trends re numbers of Australians facing financial difficulty. What she puts this down to. MyBudget’s approach to dealing with this.

MyBudget sought further information concerning the interview, including whether there will be ‘any other questions apart from the ones’ proposed by the reporter. The reporter responded on 27 November 2013 that:

As for other questions. Perhaps there will depending on what Tammy M has to say or what others have to say about current trends.

The ACMA considers that the above correspondence would have suggested to MyBudget that the ABC sought Ms May’s views on general issues concerning consumer debt in the Christmas season, such as trends in numbers of Australians experiencing financial difficulty, the reasons for this and how MyBudget deals with this. The ACMA notes that the program presenter made the following introductory remarks in the segment:

4 LEIGH SALES, PRESENTER: The number of Australians in financial distress is on the increase and few things add to the burden like the big cash outlays we all make at Christmas.

Tonight, financial counsellors are warning of a burgeoning new industry. Disturbingly, it's run by entrepreneurs trying to profit by offering to solve other people's financial difficulties.

It may sound like a contradiction, but there's apparently big money to be made.

As Greg Hoy reports, it raises serious ethical questions and can leave customers even worse off than when they started.

The content that followed included allegations made by two former MyBudget customers, L and W, that MyBudget mismanaged their debt repayments and interviews with financial counsellors who were critical of organisations like MyBudget. The ABC stated to the complainant:

This report was focused on the concerns raised by financial counsellors and charities about MyBudget's dissatisfied customers, not those who have been referred elsewhere.

The ABC submitted that:

At the time of the interview with Ms May, the reporter was at an early stage in his research into Australians facing financial difficulty and emerging trends. Prior to the interview being conducted, others to whom the reporter was speaking were expressing concerns about the emergence of commercial enterprises targeting this financially distressed group, including MyBudget. The reporter’s inclusion of questions reflecting criticism of MyBudget’s practices was consistent with his pre-interview advice that other questions might be put to Ms May depending on what she or others had to say about current trends. Ms May readily responded to these criticisms.

The ABC indicated that at the time of the interview with Ms May, it had not yet interviewed L and W. Their case studies were subsequently included in the report to illustrate the consistent nature of the complaints made by MyBudget customers to financial counselling services. The ABC further submitted that:  [A] story idea about Australians facing financial difficulty and MyBudget’s approach to their growing market became a more rounded piece after the reporter looked into criticisms that had been levelled at companies providing these services.  The general nature of Ms May’s participation did not change as the story came into clearer focus. Her participation was always to be as the CEO of MyBudget answering questions about the market for debt management services.  The reporter stated directly in his first email that MyBudget’s approach would be the focus of the interview and there could be no reasonable expectation that the reporter would not ask challenging questions about MyBudget’s approach to dealing with its customers.  The reporter also spoke with MyBudget’s public relations advisor before the interview and advised that the program would cast a ‘wide net’ to research the story and said he

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 5 Error: Reference source not found intended to speak with financial counsellors and charities to develop an understanding of the issues.  It was not a feature about the specific allegations of L and W. It was a story about the growth of for-profit debt counselling services and financial counsellors’ experience of systemic problems in the way services are delivered, as evidenced from repetitive complaints from customers of such services.  L and W’s accounts were suggested by financial counsellors as being illustrative of the systemic problems being reported. It is common ground in this matter that the reporter made clear to MyBudget that he intended to seek Ms May’s ‘perspective on today’s trends re numbers of Australians facing financial difficulty. What she puts this down to’ and ‘MyBudget’s approach to dealing with this’. (Emphases added). He also indicated that there could be ‘other’ questions depending on what Ms May and others had to say. There is, arguably, a difference between:  participation in an interview and story focussed on MyBudget’s approach to its growing markets as Australians face financial difficulty and obtain the services of for- profit debt counselling services, and  participation in an interview and story focussed on criticisms by financial counsellors and clients about the services delivered by My Budget to those in financial difficulty. However, both can fairly be characterised as participation in an interview and story dealing with MyBudget’s approach to the rising number of Australians in financial difficulty. The obligation in the Standard is only to inform participants of the general nature of their participation. Standard 5.1 does not require the ABC to set out every issue that will be canvassed with a participant. Moreover, an interviewee who is not satisfied with the level of detail proffered about the proposed story and their proposed participation, can decline to participate. Here, the ABC did inform Ms May of the general nature of her participation and therefore did not breach standard 5.1 of the Code. Opportunity to respond The complaint is that the segment implied that Ms May ‘had become extremely wealthy by profiteering from financially disadvantaged people’ and the reference to her as 'glamorous' was ‘gratuitous and intended to portray her unfavourably’. The complainant submitted that Ms May was not given a fair opportunity to respond to these assertions. The complainant also submitted that MyBudget should have been given an opportunity to respond to specific allegations of financial mismanagement:

[…] 7.30 broadcast specific allegations of financial mismanagement by MyBudget without obtaining our client's response to those allegations. The assertion that our client responded to these allegations by responding to more general concerns regarding MyBudget's activities is not correct. There is a significant difference between assertions of a general nature and allegations relating to specific circumstances. Specific allegations are given more credence by a viewing audience and add credibility to a story.

6 […] MyBudget was not aware of any allegations being made by these former customers until the story aired.

The relevant provision of the Code is standard 5.3:

5.3 Where allegations are made about a person or organisation, make reasonable efforts in the circumstances to provide a fair opportunity to respond.

The ABC submitted that references to Ms May’s personal wealth were relevant, ‘based on her high-profile and the fact that her image is so closely associated with promoting the company’. In regard to specific allegations made in the segment concerning two former customers, the ABC submitted:

The program satisfied the requirement to make reasonable efforts by arranging an interview with Ms May in which she was given the opportunity to respond to allegations that MyBudget profiteered from those in financial distress, charging high fees while mismanaging debt repayments.

Standard 5.3 requires consideration of the circumstances and what is reasonable. The circumstances here were that the program had not yet interviewed [L] or [W] when the interview with Ms May was conducted. However, the allegations of profiteering and mismanagement which lay at the heart of [L’s] and [W’s] claims had already been put to Ms May at interview. Ms May’s responses to these allegations were included in the broadcast.

As the founder and head of the company, it is expected that Ms May would have intimate knowledge and understanding of its procedures and administration, including its history of dissatisfied customers and the nature of their complaints and criticism. We are satisfied that she would be aware of, and well placed to respond to, the critical issues raised by the reporter. We note that Ms May responded to the questions with confidence and assurance and clearly stated her responses to the criticism raised by the reporter.

In order to determine whether the ABC has complied with the requirements of standard 5.3, the ACMA must determine:  Was an allegation made about a person or organisation?  Were reasonable efforts made in the circumstances to provide a fair opportunity for that person or organisation to respond? The ABC has published a Guidance Note dealing specifically with the interpretation of standard 5.3 of the Code (the Guidance Note).3

The focus of the Guidance Note is on the ‘provision of a fair opportunity to respond prior to disclosure of allegations’ and refers to material that will attract the operation of standard 5.3, namely allegations referring to ‘action or inaction that may be unlawful, improper, incompetent, negligent, corrupt, dishonourable or antisocial’. The Guidance Note also states that:

3 http://about.abc.net.au/reports-publications/fair-opportunity-to-respond-guidance-note/

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 7 Error: Reference source not found

It is not usually enough to tell the person that you wish to talk to them about some general topic. Even if you believe the person is familiar with the allegations already, you should not assume that and should set out the relevant information.

Allegations made about a person The ACMA does not consider that comments made in the program concerning the extent of Ms May’s personal wealth, or how she has acquired it, or her ‘glamorous’ appearance are captured by the classes of action or inaction referred to above. It was clearly established in the segment that MyBudget is a for-profit organisation that offers debt management for those seeking assistance. Comments about Ms May’s personal wealth, as a result of her business activity do not, in this case, go to allegations of ‘action or inaction that may be unlawful, improper, incompetent, negligent, corrupt, dishonourable or antisocial’. Allegations made about an organisation The ACMA notes that some general allegations against MyBudget concerning its payment priorities, target market and fees were put to Ms May and were refuted, including: ‘Well they say that you ensure that you get paid, but very often creditors don’t and the victims can end up in a worse predicament’; ‘Some say that you just profiteer off those in financial distress. Does that worry you?’; ‘The concern is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you?’ However, the ACMA also considers that the following comments (highlighted in bold), concerning the particular cases of L and W, fall within a number of the classes of action or inaction noted above, as they refer to allegations that MyBudget’s actions in relation to its duties concerning two former customers were improper or negligent:

Greg Hoy: Rather than help them, however, customers who spoke to 7.30 say MyBudget only made matters worse, charging high fees while mismanaging debt repayments.

L: […] But then things started getting defaulted without telling me - I wasn’t getting told about payments not being made.

Greg Hoy: Like [L], MyBudget's service fees were deducted, he says, but MyBudget neglected to renegotiate with or pay key creditors. The [W’s] soon got a frightening call from the bank.

W: I got a phone call from them saying, "What's going on?" And I was in shock, I'm like, "Haven't you been talking to MyBudget? Has MyBudget not been contacting you about what's going on?" And he's going, "No, I haven't heard anything. We haven't received any money. We - you know, they haven't even contacted us." And I was flabbergasted.

The ABC has argued that, as L and W were interviewed after Ms May, the ABC was not able to put their specific allegations to her. However, she was given an opportunity at her interview to respond to broad criticism of the same nature and, as the founding head of MyBudget, she would have had an intimate knowledge of its history of dissatisfied customers. The ABC further submitted that:

8  L and W’s stories were selected because they were illustrative of the systemic problems flagged by financial counsellors and these systemic problems were put to Ms May at interview.  Allegations relating to L and W’s specific cases were captured by the more general ones that were put to Ms May during her interview.  The three questions put to MyBudget within the interview covered the four disputed allegations made by the program.  MyBudget would have been aware of, and would have had familiarity with, the systemic issues such as: o Financial Counselling Australia has been reporting these problems to MyBudget since MyBudget’s inception; and o the South Australian Financial Counsellors Association had met with MyBudget a number of times before and after the program to discuss concerns.

 The standard does not require every reasonable effort is made, it requires efforts that are reasonable in the particular circumstances.  As the program had put these allegations to Ms May during interview and she provided clear responses, it was not necessary for this step to be repeated.  The viewer would not have formed the impression that Ms May did not challenge the criticisms L and W made of MyBudget. The ACMA is not persuaded by the ABC’s submissions. It is true Ms May was given an opportunity to respond to general or ‘high level’ criticism concerning MyBudget’s approach to managing debt repayments, alleged high fees, profiting from people in financial distress, and the prioritisation of payments. It is also true that there was no misrepresentation of Ms May’s response to the matters put to her. It was clear that, at a ‘general level’, Ms May did not accept that there were problems with My Budget’s service delivery (see further discussion at Issue 2, below). However, the allegations made by L and W were different. They were client-specific allegations of mismanagement of repayments, lack of communication about payments, and neglecting to negotiate with creditors. These more specific allegations fell into the category of actions or inactions listed above that are captured by standard 5.3. Regardless of whether Ms May had intimate knowledge of their cases, she was not made aware of these specific allegations prior to the broadcast and MyBudget was not given an opportunity to respond to them. In this case the ABC made initial contact with MyBudget for the purpose of the interview in November 2013 and Ms May was interviewed later that month. The program was broadcast on 9 December 2013. This chronology suggests there was time, prior to the program being finalised and broadcast, to put L & W’s specific allegations to My Budget. It might also have been possible to delay the broadcast to allow that to occur. The Guidance Note is not prescriptive about the method for providing an opportunity to respond. However, here, the only efforts to which the ABC has pointed, are those associated with the more general questions and criticisms put to Ms May.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 9 Error: Reference source not found Accordingly, the ACMA considers that the ABC did not make reasonable efforts in the circumstances to provide MyBudget with a fair opportunity to respond to the allegations made against it, in breach of Standard 5.3 of the Code.

10 Issue 2: Accuracy

Relevant Code provision

2. Accuracy

2.1 Make reasonable efforts to ensure that material facts are accurate and presented in context. The Code requires that standards are interpreted and applied in accordance with relevant Principles. In the case of factual accuracy, the relevant Principles include: The ABC requires that reasonable efforts must be made to ensure accuracy in all fact- based content. The ABC gauges those efforts by reference to:

 the type, subject and nature of the content;

 the likely audience expectations of the content;

 the likely impact of reliance by the audience on the accuracy of the content; and

 the circumstances in which the content was made and presented.

The ABC accuracy standard applies to assertions of fact, not to expressions of opinion. An opinion, being a value judgement or conclusion, cannot be found to be accurate or inaccurate in the way facts can.

The efforts reasonably required to ensure accuracy will depend on the circumstances. Sources with relevant expertise may be relied on more heavily than those without. Eyewitness testimony usually carries more weight than second-hand accounts.

The ABC should make reasonable efforts, appropriate in the context, to signal to audiences gradations in accuracy, for example, by querying interviewees, qualifying bald assertions, supplementing the partly right and correcting the plainly wrong.

Finding The ABC did not breach standard 2.1 of the Code.

Reasons

In applying standard 2.1 of the Code to the relevant content, the ACMA considers the following issues:  Was the particular content complained about factual in character?  Did it convey a material fact or facts in the context of the relevant segment?

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 11 Error: Reference source not found  If so, were those facts accurate?  If a material fact was not accurate (or its accuracy cannot be determined), did the ABC make reasonable efforts to ensure that the material fact was accurate and presented in context? The ACMA notes that specific statements about the conduct of MyBudget were made by L and W. More general statements about debt management services were made by financial counsellors and other professionals working with those in financial distress. The ACMA must assess each statement complained of in the context of the entire program to determine whether the ordinary reasonable viewer would regard it as a presentation of fact or something else. Some considerations which the ACMA generally applies in assessing whether particular broadcast content is factual in character are set out in Attachment D. Statements about MyBudget made by L and W The complainant submitted that:

The Segment on several occasions quoted from two former MyBudget customers, [L] and [W]. [L] stated that MyBudget was not making payments on her behalf, and was not telling her of that fact. She also stated that there were 'dramas' and that she received telephone calls as a result. [L] also says that she became mentally ill because of it, and that MyBudget were still demanding fees while she was in a mental hospital.

With respect to [W], in the Segment Mr Hoy states that MyBudget neglected to renegotiate with or pay key creditors on [W’s] behalf. Mr Hoy states that [W’s] house was sold at a 'fire sale' price as a result. [W] attributes his separation from his wife on this occurrence.

The allegations made against MyBudget by [L] and [W] are factually incorrect.

The ABC responded to the complainant that:

7.30 has explained that the claims made by [L] and [W] in the broadcast were corroborated by financial counsellors familiar with their specific cases, and their concerns were consistent with a broad pattern of criticism of MyBudget, which the program confirmed with a range of financial counsellors who had direct dealings with its dissatisfied customers.

The sources relied upon by 7.30 included Financial Counselling Australia, the Consumer Credit Legal Service, the Salvation Army and other financial counsellors contacted during the production of the report. The program confirmed this pattern of criticism included poor budgeting advice, bills going unpaid, vulnerable customers not properly understanding the service, high up-front and on-going fees, negotiations with creditors not taking place as promised, inappropriate advice about bankruptcy options and delays in responding to requests to change arrangements.

We are satisfied that 7.30 met the reasonable efforts requirement in standard 2.1 by confirming the nature, extent and accuracy of the criticisms expressed by the two case studies in the report with multiple sources. We are satisfied that 7.30 made reasonable efforts to ensure those case studies were an accurate reflection on the broad and consistent criticism made about MyBudget

12 by a range of dissatisfied customers, that those general criticisms were put to Ms May for response and that her response was prominently presented, in context.

The relevant statements from L and W include the following:

L: First couple of weeks was OK. But then things started getting defaulted without telling me - I wasn't getting told about payments not being made. It just got such a big mess, like, it just turned into drama after drama, phone call after phone call. It got to the point where I couldn't open my letters, I couldn't even answer the phone, I didn't even want to leave my house. I ended up getting mentally ill because of it. ... And MyBudget was still demanding their fees when I was in a mental hospital.

W: I got a phone call from them [creditors] saying “What’s going on? And I was in shock, I’m like “Haven’t you been talking to MyBudget? Has MyBudget not been contacting you about what’s going on?” And he’s going “No, I haven’t heard anything. We haven’t received any money. We - you know, they haven’t even contacted us” …

W: Their care factor, they had none. I broke down at work, collapsed at work. I split up with my wife for about a month.

The reporter also made the following statements concerning these specific cases:

Like [L], MyBudget's service fees were deducted, he says, but MyBudget neglected to renegotiate with or pay key creditors. The [W’s] soon got a frightening call from the bank.

The [W's] house had to be sold at a fire-sale price and a big loss.

The ACMA considers that the ordinary reasonable viewer would understand that L and W had alleged that MyBudget had mismanaged repayments on their behalf and that their health and/or relationships suffered as a result. However, the relevant allegations were based on the subjective accounts of L and W. Although the reporter and presenter did refer to more general criticisms of MyBudget in the segment by Financial Counselling Australia, the Consumer Credit Legal Service, and the Salvation Army, they did not endorse or corroborate L and W’s specific allegations. In the context of the entire broadcast, L and W’s accounts were accurately presented as contestable propositions and judgements. L’s account of her high debt situation at the time she became involved with MyBudget, and her need to seek the assistance of the Salvation Army, was followed by W’s account of his experience. It was clear enough that these were L and W’s own versions of events which the reporter neither endorsed nor paraphrased. For example, the reporter used terms such as ‘customers who spoke to 7.30’ and, referring to W, ‘Like L, MyBudget’s service fees were deducted, he says’, ‘But some former customers believe that is not enough.’ In this way, L and W’s accounts were presented as their subjective experiences rather than facts for the purposes of the Code. The segment included statements from L’s Salvation Army counsellor who described L’s financial state without referring specifically to MyBudget. It also included interviews with

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 13 Error: Reference source not found experts including from Financial Counselling Australia and Consumer Credit Legal Centre who commented generally on ‘for profit’ service providers that target people in financial difficulty and called for regulation. However, these experts did not refer to MyBudget specifically. The accounts of L and W were surrounded by factual descriptions of the nature of MyBudget’s services which are not disputed, including advertisements for MyBudget and Ms May’s own description of her target market and the nature of fees charged. Indeed, in Ms May’s interview, general criticisms of MyBudget (though not the specific allegations of L and W) were put to and refuted by her, making it clear that perspectives on MyBudget were contested. Having regard to all these matters, the ACMA considers that L and W’s accounts were presented as contestable personal accounts and could not, in the context of the entire program, be considered as assertions of fact to which Code standard 2.1 obligations apply. Accordingly, the ABC did not breach standard 2.1 of the Code in relation to the allegations made by L and W against MyBudget. Statements that MyBudget charges high fees and always prioritises payment to itself The complainant submitted that:

The Segment alleges that MyBudget charges high fees and always prioritises payment to itself, leaving the creditors of a particular debtor to fight for what remains.

This is untrue. MyBudget charges fees of a reasonable level which vary to take account of each debtor's individual circumstances. In the event that a debtor cannot afford to pay both fees and their debts in a particular period, MyBudget's practice is to forego its fees for that period. MyBudget 'writes-off tens of thousands of dollars in unpaid fees each year, and uniformly elects not to pursue clients who do not pay.

We are satisfied that it was relevant, and in context, for the program to present the broad criticism, expressed by both customers and financial counsellors, that MyBudget's fees are too high and that it prioritises payment to itself before a customer's creditors. We note this criticism was put to Ms May during her interview, and that her response was included in the broadcast […]

The ACMA is of the view that the material in the broadcast concerning the priority of fees charged was based on first-hand accounts, including those given by MyBudget itself. It included statements by the expert representatives of the Consumer Credit Legal Centre and Financial Counselling Australia, who spoke broadly about the for-profit debt management service industry and made their own assertions about how these organisations set fees and prioritise payments. The ACMA has no evidence before it that verifies this material and is not in a position itself to determine its accuracy. The ACMA is satisfied that, as the material was presented and/or reinforced by subject matter experts (including to some extent by Ms May), the ABC made reasonable efforts to ensure that the material was accurate and presented in context. In the context of the segment in its entirety, the ordinary reasonable viewer would have understood fees to be high in the opinion of certain customers, and reasonable in the

14 view of MyBudget and the many customers who are happy with its services. Both perspectives were explored in the segment and neither was misrepresented. Accordingly, the ABC did not breach standard 2.1 in relation to the allegations that MyBudget charges high fees and prioritises payments to itself. Implication that MyBudget preys on members of the community who are in poor financial circumstances The complainant submitted that:

The Segment infers that MyBudget preys on members of the community who are in poor financial circumstances rather than referring them to lower cost schemes run by charities or Financial Counselling Australia. This is not the case. As Ms Tammy May, MyBudget CEO, informed the ABC by email prior to the publication of the Segment, MyBudget commonly refers people with limited financial means to various not for profit financial counsellors and charities. Approximately 3,280 people have been referred to such services in 2013 alone.

We note that Ms May informed the reporter that her company refers people with limited financial means to not-for-profit financial counselling services and charities. 7.30 has noted that Ms May has also publicly stated in MyBudget promotions that there was nowhere else to send the many customers her company now has, and so she decided to establish a business to help them herself. This report was focused on the concerns raised by financial counsellors and charities about MyBudget's dissatisfied customers, not those who have been referred elsewhere.

The report did not state that MyBudget "preyed" on people in poor financial circumstances. We are satisfied that it is self-evident that MyBudget is a for-profit company whose service is directed at, and customer base consists of, those suffering severe financial difficulty.

The ACMA notes that although strong statements were made about the for-profit nature of the industry, there were no statements made in the broadcast that MyBudget ‘preys’ on people in financial distress. The ACMA is of the view that the material in the broadcast relevant to the complaint was factual material conveying that the debt management service industry is a for-profit industry which directs its marketing and services to people in financial distress. The ACMA considers that, as the commentators were experts from the financial counselling sector with experience in assisting a number of people in financial difficulty, they were sufficiently qualified to comment on the target market of for-profit providers. The ACMA is satisfied that the ABC made reasonable efforts to ensure that factual material broadcast was accurate and presented in context. Accordingly, the ABC did not breach standard 2.1 in relation to the allegation that the broadcast implied that MyBudget preys on members of the community who are in poor financial circumstances. Ms May’s personal wealth The complainant submitted that:

Ms May's personal wealth is significantly less than [the] amount claimed. At the time this figure was released by BRW, MyBudget issued a statement which addressed this fact. The ABC made no mention of the statement, and did not provide Ms May with a fair opportunity to respond to these assertions.

We note the report accurately attributed the claim that Ms May has an estimated personal fortune of $20 million to its source, the BRW […]

The ACMA has identified the following relevant statement (highlighted in bold):

Greg Hoy: MyBudget has made its glamorous founder, Tammy May, very rich. Named Telstra's South Australian Businesswoman of the Year. BRW estimates her personal wealth at $20 million. All from offering to help victims of financial distress. MyBudget manages their income and takes responsibility for paying their debts, deducting what Tammy May describes as "small fees" - an admin' fee of around $2,000 a year, plus a substantial establishment fee.

The ACMA is of the view that the statement highlighted in bold would have been understood by the ordinary reasonable viewer as a statement of fact made by the reporter. It was specific, unequivocal and capable of independent verification. However, the relevant factual assertion was that BRW had estimated Ms May’s wealth at $20 million. The ACMA notes that a report titled ‘Young Rich 2013: 94. Tammy May’, in the Business Review Weekly (BRW) on 18 September 2013 estimated Ms May’s personal wealth at $20 million.4

The Adelaide Advertiser noted on 18 September 2013 that Ms May had drawn her disagreement with the figure to the attention of BRW, but this article did not provide an alternative figure5 and no correction or retraction appears to have been published by BRW. Accordingly, the ABC did not breach standard 2.1 in relation to the reference to BRW’s report of Ms May’s personal wealth. The complaint that Ms May was not given a fair opportunity to respond to assertions concerning her personal wealth has been addressed under standard 5.3 [fair and honest dealing].

Issue 3: Impartiality

Relevant Code provisions 4. Impartiality and diversity of perspectives

4.1 Gather and present news and information with due impartiality

4.5 Do not unduly favour one perspective over another. 4 http://www.brw.com.au/p/lists/young- rich/2013/young_rich_tammy_may_tYoGwcE4RoMGTJ19el6sKN - accessed 28 July 2014 5 http://www.adelaidenow.com.au/business/tammy-may-debuts-as-sa8217s-only-millionaire-on-brw- young-rich-list-2013/story-fni6uma6-1226722116586 - accessed 28 July 2014

16 The Code requires that standards are interpreted and applied in accordance with relevant Principles. In the case of impartiality, the relevant Principles include: […]

Judgements about whether impartiality was achieved in any given circumstances can vary among individuals according to their personal and subjective view of any given matter of contention. Acknowledging this fact of life does not change the ABC’s obligation to apply its impartiality standard as objectively as possible. In doing so, the ABC is guided by these hallmarks of impartiality:

 a balance that follows the weight of evidence;

 fair treatment;

 open mindedness; and

 opportunities over time for principal relevant perspectives on matters of contention to be expressed.

Impartiality does not require that every perspective receives equal time, nor that every facet of every argument is presented.

Assessing the impartiality due in given circumstances requires consideration in context of all relevant factors including:

 the type, subject and nature of the content;

 the circumstances in which the content is made and presented;

 the likely audience expectations of the content;

 the degree to which the matter to which the content relates is contentious;

 the range of principal relevant perspectives on the matter of contention; and

 the timeframe within which it would be appropriate for the ABC to provide opportunities for the principal relevant perspectives to be expressed, having regard to the public importance of the matter of contention and the extent to which it is the subject of current debate.

Finding The ABC did not breach standards 4.1 and 4.5 of the Code.

Reasons The complainant submitted that:

The manner in which information on which the Segment was based was collected demonstrates a lack of impartiality on the part of the ABC. [L] and [W] were afforded the opportunity to provide their version of events regarding their interactions with MyBudget.

MyBudget was not aware of any allegations being made by these former customers until the story aired. MyBudget was not afforded the opportunity to provide information as to what happened in each case, despite the fact that an interview with Ms May was recorded for the Segment. By failing to afford MyBudget the same opportunities as [L] and [W], the ABC demonstrated a lack of impartiality.

It is important to understand that impartiality does not require that every perspective receives equal time, or that every facet of every argument is presented. We are satisfied that the report included a range of principal relevant perspectives, that the criticisms made about MyBudget were followed by that company's clear and emphatic responses to those criticisms and we have concluded that no perspective in the report was unduly favoured over another.

The relevant provisions require the ABC to ‘gather and present news and information with due impartiality’ [emphasis added]. Inclusion of the word ‘due’ indicates an element of flexibility depending on the particular context. Achieving impartiality requires a broadcaster to present content in a way which avoids conveying a prejudgment, or giving effect to the affections or enmities of the presenter or reporter, who play a key role in setting the tone of the program, through their style and choice of language. A program that presents a perspective that is opposed by a particular person or group is not inherently partial. Whether a breach of the Code has occurred will depend on the themes in the program, any editorial comment, the overall presentation of the story and the circumstances in which the program was prepared and broadcast. It is also possible, indeed useful, for a reporter to adopt a strong contrarian stance without this necessarily amounting to a lack of impartiality – particularly if the contrarian stance encourages the interviewee to explain or defend a position or claim. The ABC is entitled to explore issues concerning the debt management industry and present a line of enquiry on this matter as long as the hallmarks of impartiality are met; namely, that there is a balance that follows the weight of evidence; fair treatment; open mindedness; and opportunities over time for principal relevant perspectives on matters of contention to be expressed. A balance that follows the weight of evidence In this case, the program explored the rise of ‘for profit’ budgeting companies and general concerns expressed by financial counsellors and specific accounts of former MyBudget clients that these companies mismanage and neglect their clients’ debts, and profit at the expense of people who are struggling with debt. As noted above, the specific assertions of L and W were accurately presented as allegations, and the statement about the prioritising of fees, the concerns expressed by industry representatives from the financial counselling sector and the general trends were accurately presented.

18 Fair treatment MyBudget was not given an opportunity to comment on specific allegations relating to its operations, nor to defend its position, regarding the specific circumstances of L and W. However, it was given an opportunity to respond to broad criticisms including that its fees are high; that it prioritises payment to itself and that its customers can end up in a worse predicament. Open mindedness There was no challenge to L’s and W’s accounts by the reporter and, as indicated above, MyBudget was not given a fair opportunity to contest them. However, as discussed at Issue 2, the claims themselves were accurately presented as contestable; MyBudget’s responses, where included, were not misrepresented; and the general allegations made in the program were reinforced by subject matter experts. In the context of the topic explored, it was reasonable that challenging questions were put to Ms May. Some of the questions asked by the reporter conveyed, through the use of emotive and colourful language, a level of pre-judgement. For example (as highlighted in bold):

Well they say that you ensure that you get paid, but very often creditors don't and the victims can end up in a worse predicament.

The concern is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you? (Emphases added).

The ABC contends that these pre-judgments were not editorial commentary from the program, but reflected concerns about MyBudget expressed by others to the reporter that were now being put to Ms May for response. Overall, the reporter’s tone was measured and courteous. Opportunities over time for principal relevant perspectives on matters of contention to be expressed The segment clearly established that there is concern about the rise of ‘for profit’ budgeting companies and, therefore, a critical stance on this matter and an exploration of how companies like MyBudget operate was justified. The ACMA also notes that principal relevant perspectives on broad matters of contention were presented in the segment, including those of Ms May on the benefits of MyBudget’s services, the subjective accounts of L and W and the views of financial counselling industry spokespersons. In gathering information for the segment, specific information about the cases of L and W came to light and MyBudget was not given the opportunity to respond to their specific allegations. However, Ms May was given the opportunity to respond to general criticism concerning MyBudget’s approach to managing debt repayments, alleged high fees, profiteering from people in financial distress, and the prioritising of payments. ABC programs are not obliged to ensure that every facet of every argument is presented and the absence of comment from MyBudget on L and W’s allegations does not nullify the general opportunity that was given for principal relevant perspectives on matters of contention to be expressed.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 19 Error: Reference source not found Conclusion After considering the broadcast against the four hallmarks of impartiality set out in the ABC’s Principles, the ACMA finds that the ABC did not fail in its duty to gather and present news and information with due impartiality. Further, in the context of the general editorial approach of the program and despite the failure of the ABC in respect of standard 5.3 (as outlined above), the ACMA finds that the segment did not unduly favour the perspective of L and W over that of Ms May or MyBudget. Accordingly the program did not breach standards 4.1 and 4.5 of the Code.

20 Attachment A Transcript – reproduced from the ABC website

LEIGH SALES, PRESENTER: The number of Australians in financial distress is on the increase and few things add to the burden like the big cash outlays we all make at Christmas.

Tonight, financial counsellors are warning of a burgeoning new industry. Disturbingly, it's run by entrepreneurs trying to profit by offering to solve other people's financial difficulties.

It may sound like a contradiction, but there's apparently big money to be made.

As Greg Hoy reports, it raises serious ethical questions and can leave customers even worse off than when they started.

GREG HOY, REPORTER: Christmas: the time for giving, as a blizzard of TV ads love to remind us.

For millions of Australians facing financial difficulties, however, giving won't be easy. There are very different ads targeting them.

MYBUDGET TV ADVERT (female voiceover): Are your debts making you scared to answer the phone? There is help, and it's not taking out another loan.

GREG HOY: Early last year, ads for a debt management service called MyBudget caught the attention of [L] in [name of town], South Australia. A single mother of two, at the time, she was struggling with repayments and at her wits' end.

L: It caused the break-up of me and my partner. I had people on my doorstep going to repossess my car. I had my car, which was over $1,000 in arrears, ready to get repossessed. My house was just about to get defaulted and that's what drew me towards MyBudget. Because I was trying to handle it by myself plus working two jobs and all that sort of thing. So I just thought, "Why not give it a try? They handle everything."

TAMMY MAY, FOUNDER, MYBUDGET: We're finding all of the cities, there's a growth in people feeling that the financial strains, particularly around the rising cost of utilities.

GREG HOY: MyBudget has made its glamorous founder, Tammy May, very rich. Named Telstra's South Australian Businesswoman of the Year. BRW estimates her personal wealth at $20 million. All from offering to help victims of financial distress. MyBudget manages their income and takes responsibility for paying their debts, deducting what Tammy May describes as "small fees" - an admin' fee of around $2,000 a year, plus a substantial establishment fee.

TAMMY MAY: It can be anywhere from $600 to $1,500. In fact, a lot of the time, people are telling us, our clients are telling us, that they don't even recognise the fees.

GREG HOY: Some say the fees are higher. MyBudget's ads, however, boast of many happy customers.

CUSTOMER (MyBudget Ad): And I live every day knowing that I'm not going to get those

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 21 Error: Reference source not found phone calls.

TAMMY MAY (MyBudget Ad): The most frustrating part was there was nowhere I could send them for help. So I decided to help them myself.

GREG HOY: Rather than help them, however, customers who spoke to 7.30 say MyBudget only made matters worse, charging high fees while mismanaging debt repayments.

L: First couple of weeks was OK. But then things started getting defaulted without telling me - I wasn't getting told about payments not being made. It just got such a big mess, like, it just turned into drama after drama, phone call after phone call. It got to the point where I couldn't open my letters, I couldn't even answer the phone, I didn't even want to leave my house. I ended up getting mentally ill because of it. ... And MyBudget was still demanding their fees when I was in a mental hospital.

GREG HOY: In desperation, [L] sought help from the Salvation Army.

FINANCIAL COUNSELLOR, SALVATION ARMY: She had lost her insurance for both the car and the home, which were under finance. She had been disconnected from her phone. She had credit card debts. And she was just in tears.

GREG HOY: In Queensland's [name of town], [W] and his family were also attracted by MyBudget's ads.

W: And they basically turned around and said, "You won't have to worry about any of this anymore. We'll look after it. Everything'll be fantastic."

GREG HOY: Like [L], MyBudget's service fees were deducted, he says, but MyBudget neglected to renegotiate with or pay key creditors. The [W’s] soon got a frightening call from the bank.

W: I got a phone call from them saying, "What's going on?" And I was in shock, I'm like, "Haven't you been talking to MyBudget? Has MyBudget not been contacting you about what's going on?" And he's going, "No, I haven't heard anything. We haven't received any money. We - you know, they haven't even contacted us." And I was flabbergasted.

GREG HOY: The [W's] house had to be sold at a fire-sale price and a big loss.

W: Their care factor, they had none. I broke down at work, collapsed at work. I split up with my wife for about a month.

GREG HOY: Well they say that you ensure that you get paid, but very often creditors don't and the victims can end up in a worse predicament.

TAMMY MAY: We've helped over 30,000 Australians countrywide, and if that was the case, then we wouldn't have a very good business and we wouldn't have clients coming to us month on month and have this growing business of - that's growing at more than 50 per cent per annum.

GREG HOY: There is somewhere else for people struggling with crippling debt to go. Australia's Financial Counsellors Network provides help for free, with support from charities,

22 churches and governments.

EXECUTIVE DIRECTOR, FINANCIAL COUNSELLING AUSTRALIA: There is something like 2.5 million Australians living in households of high financial stress. And that's an enormous number of people. And that's why you see mass marketing to this group of people.

GREG HOY: [G], executive director of Financial Counselling Australia, is concerned about the growing for-profit debt counselling market represented by services like MyBudget.

EXECUTIVE DIRECTOR, FINANCIAL COUNSELLING AUSTRALIA: We are really worried about for-profit providers targeting people in financial difficulty who only offer one solution, a solution that involves high fees, high set-up costs, ongoing fees.

REPRESENTATIVE, CONSUMER CREDIT LEGAL CENTRE: They always prioritise the payment to themselves first and the payment to the creditors are largely left to be sort of fought amongst those creditors. And I think there's a great deal of self-interest in these organisations and they're in effect profiteering off people's hardship.

GREG HOY: Some say you just profiteer off those in financial distress. Does that worry you?

TAMMY MAY: It doesn't necessarily worry me because I know what we do improves our clients' financial position, and actually, the amount of clients that I hear tell me that MyBudget has saved their life, helped improve their financial position, let alone save their marriage, is so encouraging.

W: I was scared, to be honest, and I was worried. The main thing I had, I wanted to save my family and my house, you know, and that was my biggest concern, and in the end, I lost it anyway.

EXECUTIVE DIRECTOR, FINANCIAL COUNSELLING AUSTRALIA: We are seeing more problems from these services when they don't work. I think the case for regulation is increasingly strong. So something goes wrong, for example, people would have access to external dispute resolution and potentially a mechanism for compensation.

GREG HOY: But some former customers believe that is not enough.

L: MyBudget, I want them closed down.

W: I really believe that they should be made liable for what they've done, and be stopped, pretty much.

GREG HOY: The heavy advertising of happy customers continues. But [W] says what eventually saved his family was free advice from a professionally trained financial counsellor.

W: She was the only one that asked for nothing, OK, and done more for me than all of the others put together.

GREG HOY: The concern is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you?

TAMMY MAY: Oh, that's absolutely not the case at all because we make sure our fees are affordable for our clients. And the other thing is they're not locked into a long-term contract. They can give us 30 days' notice and actually leave us if the service wasn't working.

EXECUTIVE DIRECTOR, FINANCIAL COUNSELLING AUSTRALIA: If you're in financial difficulty, the last thing that should happen to you, if you go to one of these services, you end up worse off and owing more money. And we - we, unfortunately, see that happening to people.

LEIGH SALES: Greg Hoy reporting. And if you are facing financial problems, you can contact Financial Counselling Australia on 1800 007 007.

24 Attachment B Complainant’s submissions To the ABC on 12 December 2013: We act for MyBudget Pty Ltd. We are instructed to lodge a complaint regarding the multiple breaches of the ABC's Code of Practice (Code) committed in the 7.30 segment 'The businesses cashing-in on people under financial stress', broadcast on 9 December 2013 (Segment) and still available on the ABC website. The journalist responsible for Segment is Mr Greg Hoy. The content of the Segment was republished on 9 December 2013 on the ABC website in an article titled 'Financial counsellors urge caution over new industry offering help for budget difficulties' (Republication). It continues to be available on the website. Our client's below concerns regarding the Segment apply equally to the Republication. In particular, the Segment breached standards 2.1, 4.1, 4.5, 5.1 and 5.3 of the Code in the manner set out below. Standard 2.1 - Make reasonable efforts to ensure that material facts are accurate and presented in context The Segment breached this Standard in that it contained numerous inaccuracies and reasonable efforts were not made to ensure that these inaccuracies did not arise. 1. The Segment on several occasions quoted from two former MyBudget customers, [L] and [W]. Ms [L] stated that MyBudget was not making payments on her behalf, and was not telling her of that fact. She also stated that there were 'dramas' and that she received telephone calls as a result. Ms [L] also says that she became mentally ill because of it, and that MyBudget were still demanding fees while she was in a mental hospital. With respect to [W], in the Segment Mr Hoy states that MyBudget neglected to renegotiate with or pay key creditors on [W’s] behalf. Mr Hoy states that [W’s] house was sold at a 'fire sale' price as a result. [W] attributes his separation from his wife on this occurrence. The allegations made against MyBudget by [L] and [W] are factually incorrect. MyBudget possesses correspondence, audio recordings of telephone calls and records of text messages which demonstrate the factual inaccuracy of these allegations. We would like to be able to provide this material in order to demonstrate the truth of what occurred. We are in the process of requesting that [L] and [W] consent to the disclosure of this material. We encourage the ABC to ask [L] and [W] to grant their consent for us to release to you this objective evidence of the situation. None of these matters were put to MyBudget. Our client had no opportunity to correct these matters, in circumstances where it would have been reasonable to provide such an opportunity. To clarify, in Mr Hoy's dealings with MyBudget he made no reference to [L] or [W], and in fact was deliberately misleading as to why he sought our client's views.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 25 Error: Reference source not found On a separate note, we are instructed to inform you that [W] was placed on a list of clients for whom MyBudget refuses to act on the basis that he has been abusive towards MyBudget staff in the past. 2. The Segment alleges that MyBudget charges high fees and always prioritises payment to itself, leaving the creditors of a particular debtor to fight for what remains. This is untrue. MyBudget charges fees of a reasonable level which vary to take account of each debtor's individual circumstances. In the event that a debtor cannot afford to pay both fees and their debts in a particular period, MyBudget's practice is to forego its fees for that period. MyBudget 'writes-off tens of thousands of dollars in unpaid fees each year, and uniformly elects not to pursue clients who do not pay. 3. The Segment, through [the Executive Director, Financial Counselling Australia], infers that there is insufficient regulation in MyBudget's industry sector such that MyBudget's clients cannot access external dispute resolution. As Ms May stated twice to Mr Hoy during her interview, MyBudget is subject to stringent regulation as a result of its credit licence, which includes an ability for clients to access external dispute resolution through the Financial Ombudsman Service. The ABC failed to publish this part of Mr Hoy's interview with Ms May. This is clearly a factual inaccuracy published unreasonably by the ABC. 4. The Segment infers that MyBudget preys on members of the community who are in poor financial circumstances rather than referring them to lower cost schemes run by charities or Financial Counselling Australia. This is not the case. As Ms May informed Mr Hoy by email prior to the publication of the Segment, MyBudget commonly refers people with limited financial means to various not for-profit financial counsellors and charities. Approximately 3,280 people have been referred to such services this year alone. 5. Finally, the Segment broadcasts portions of interviews conducted by Mr Hoy with Ms May, [the Executive Director, Financial Counselling Australia] and [the Representative, Consumer Credit Legal Centre]. We are instructed that some of the statements made by Ms May during her interview were taken out of context. For example, we are instructed that one of Ms May's responses which appears in the Segment to respond to allegations made by [L] and [W] was in fact a response to a question for the journalist about concerns raised by charities with respect to MyBudget. In addition, our client suspects, based on the manner in which their comments were framed, that comments made by [the Executive Director, Financial Counselling Australia] and [the Representative, Consumer Credit Legal Centre] which appear to refer to MyBudget in fact refer to the debt consolidation industry generally. If correct, these statements have been taken out of context as there is a clear distinction between the debt consolidation industry and the personal budgeting industry to which our client belongs. We request that you provide us with full copies of the unedited interviews conducted by Mr Hoy with Ms May, [the Executive Director, Financial Counselling Australia] and [the Representative, Consumer Credit Legal Centre] so that we are able to properly assess this issue.

26 Mr Hoy could easily have taken steps to ensure that the material facts reported in the Segment were accurate and reported in context. The matters raised at points 1 and 2 above were not put to MyBudget at any stage. Ms May was not aware that the Segment would involve former clients of MyBudget until it aired. Had these matters been put to MyBudget, a response would have been provided which would have demonstrated the inaccuracy of the matters reported. The matters raised at points 3 and 4 were canvassed with Mr Hoy by Ms May during her interview and by email, respectively. Mr Hoy knew, or ought to have known, that the facts on which he reported were inaccurate. Finally, given that Mr Hoy framed the relevant interviews and the ABC had copies of the full interviews, it is clear that there was a failure to take reasonable steps to ensure that information was presented in context. Standards 4.1 and 4.5- Gather and present news and information with due impartiality; do not unduly favour one perspective over another The manner in which information on which the Segment was based was collected demonstrates a lack of impartiality on the part of Mr Hoy and the ABC. Mr Hoy has afforded both [L] and [W] the opportunity to provide their version of events regarding their interactions with MyBudget. In contrast, MyBudget was not aware of any allegations being made by these former customers until the story aired. MyBudget was not afforded the opportunity to provide information as to what happened in each case, despite the fact that Mr Hoy recorded an interview with Ms May for the Segment. By failing to afford MyBudget the same opportunities as [L] and [W], Mr Hoy and the ABC demonstrated a lack of impartiality. In addition, the ABC was not frank as to the purpose of its interview with Ms May prior to its occurrence. Mr Hoy stated in writing that he wanted to hear Ms May's perspective on today's trends regarding Australians facing financial difficulty, and how MyBudget deals with this issue. He at no stage mentioned discussing allegations made by anyone regarding the conduct of MyBudget. The conduct of Mr Hoy suggests that he sought to interview Ms May at a time when she had no notice of the allegations he actually intended to raise. As a result, Ms May presented as less confident and credible than she otherwise would. This suited the agenda of the Segment, being to criticise the activities of MyBudget. Mr Hoy and the ABC demonstrated a lack of impartiality and unduly favoured one perspective over another. Standards 5.1 and 5.3 - Participants in ABC content should normally be informed of the general nature of their participation; where allegations are made about a person or organisation, make reasonable efforts in the circumstances to provide a fair opportunity to respond For the reasons canvassed above, Mr Hoy and the ABC breached these Standards. In addition to matters previously addressed, the Segment also inferred that Ms May had become extremely wealthy, with a personal wealth of $20 million, by profiteering from financially disadvantaged people. This is a gratuitous, unwarranted and untrue attack on Ms May's character. The reference to Ms May as 'glamorous' was in the context of the publication gratuitous and intended to portray her unfavourably.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 27 Error: Reference source not found Ms May's personal wealth is significantly less than the $20 million figure reported by BRW. At the time this figure was released, MyBudget issued a statement which addressed this fact. Mr Hoy made no mention of the statement, and did not provide Ms May with a fair opportunity to respond to these assertions. Also, Mr Hoy was asked by MyBudget to indicate the matters he wished to discuss prior to conducting an interview with Ms May. There were detailed communications on the matter and the matters Mr Hoy chose to disclose (and not disclose) can only show that he intended to deliberately mislead Ms May and MyBudget. Consistent with that, after the interview with Ms May occurred, he was asked when he intended to air the Segment by our client. He did not respond. Future action The Segment and Republication are especially disappointing pieces of journalism given that MyBudget's aim is to assist financially disadvantaged people improve their financial situation and regain financial independence. It would be disappointing if these unbalanced and factually incorrect publications dissuaded potential MyBudget customers from seeking assistance. MyBudget seeks a finding that the Segment constitutes a breach of the Code. MyBudget also seeks that a correction and apology be published as soon as practicable on the 7.30 programme which addresses the matters raised above. We ask that the ABC forward a draft correction and apology to us for consideration. We request that the Segment and Republication be taken down from the internet as soon as practicable, pending the ABC's final determination on these matters, in order to prevent any further damage to our client. In the event that this complaint is made out, we request that the Segment and Republication remain taken down. Please contact me if you require any further information in order to consider this complaint. Otherwise, we look forward to your prompt determination of this complaint. We ask that you give this complaint your urgent attention, having regard to the damage to our client and those financially disadvantaged people who may be deterred from seeking our client's assistance. To the ABC on 13 March 2013: We refer to your letter dated 27 February 2014, in response to our client's complaint regarding the 7.30 story 'The businesses cashing-in on people under financial stress' (Story). Our client is disappointed with your response to its complaint and maintains that the Story was in breach of the ABC Code of Practice. While not an exhaustive response to your letter, the following issues cause our client particular concern. First, 7.30 broadcast specific allegations of financial mismanagement by MyBudget without obtaining our client's response to those allegations. The assertion that our client responded to these allegations by responding to more general concerns regarding MyBudget's activities is not correct. There is a significant difference between assertions of a general nature and allegations relating to specific circumstances. Specific allegations are given more credence by a viewing audience and add credibility to a story. Given that 7.30 had been in email contact with MyBudget prior to conducting the interview with Ms May, it would have been simple for the programme to again contact MyBudget by email

28 after speaking with these former clients to seek a response to the allegations. The fact that 7.30 did not do so is consistent with the bias present in the Story. Had these allegations been put to our client, MyBudget would have sought the consent of the former clients to provide documentary evidence and recorded telephone conversations to 7.30 which would have disproved the allegations. If the former clients had not provided consent (as is the current circumstance) this ought to have caused 7.30 to reconsider the reliability of these allegations. As it stands, our client still possesses information which disproves the allegations made by these former clients and is still seeking the former clients' consent to disclose this information to the ABC. We note your indication that the specific allegations were corroborated by financial counsellors. Any financial counsellor who corroborated these former clients' allegations were not acting on information from MyBudget and were likely only acting on information from the complainants themselves. As such, 7.30 merely obtained corroborative evidence from sources who, like the programme, were relying on information provided by the former clients. Secondly, we note your comment that 'impartiality does not require that every perspective receives equal time, or that every facet of every argument is presented'. However, impartiality should require 7.30 to provide MyBudget with the opportunity to respond and present its perspective to specific allegations such as those made in this case. If the case studies were to be used to evidence a more general point regarding a business, 7.30 ought to have confirmed that the case studies actually did confirm that more general point. This required 7.30 to seek information from MyBudget. Finally, as you have noted, Mr Hoy's email to Ms May seeking an interview requested an interview regarding today's trends regarding the numbers of Australians facing financial difficulty, what she puts this down to and MyBudget's approach to dealing with the issue. As such, the email clearly indicated that the story was going to relate to the large number of people in financial difficulty in the lead up to Christmas, the causes for such difficulties and MyBudget's activities. The interview and Story did not address the first two issues. Rather, it focused solely on MyBudget's activities. The initial email from 7.30 was designed to suggest that the Story would relate to people in financial difficulty in the lead up to Christmas and call on Ms May as an expert in the field. The email disguised the true purpose of the interview, being to obtain Ms May's responses to general accusations regarding MyBudget's conduct. Ms May was not informed of the general nature of her participation in the interview prior to attending. She was deceived. We request that the ABC reconsider its finding that the Story did not breach the ABC Code of Practice. We also request that the ABC take down the Story (and any transcript of the Story) from its website as a matter of urgency. If the Story is removed, we anticipate that we will obtain instructions to take the matter no further. The Story has caused significant financial damage to our client, and damaged Ms May's reputation. Our client takes these issues very seriously. If the Story is not taken down within 14 days, we are instructed that our client will pursue this matter further with the Australian Communications and Media Authority. We are also instructed that Ms May will seek independent legal advice from another firm regarding a personal defamation action against the ABC. As noted in your letter, 'her image is

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 29 Error: Reference source not found so closely associated with promoting the company'. Our firm will not be involved as our East Coast offices act for the ABC and we have a clearance to act in relation to this complaint, not any subsequent litigation. To the ACMA on 22 April 2014: This complaint relates to the 7.30 Segment called 'The businesses cashing-in on people under financial stress' (Segment). The ABC did not make reasonable efforts to ensure that material facts were accurate and presented in context. The ABC did not gather and present news and information with due impartiality, and unduly favoured one perspective over another. The ABC did not inform a participant in the broadcast of the general nature of their participation or, in a circumstance where allegations are made about a person or organisation, make reasonable efforts to provide a fair opportunity to respond. Standard 2.1 The Segment breached this Standard in that it contained numerous inaccuracies and reasonable efforts were not made to ensure that these inaccuracies did not arise. 1. The Segment quoted two former MyBudget customers, [L] and [W]. The allegations made against MyBudget by [L] and [W] are factually incorrect. MyBudget possesses correspondence, audio recordings of telephone calls and records of text messages which demonstrate the factual inaccuracy of these allegations. We have requested that [L] and [W] consent to the disclosure of this material. While MyBudget is legally able to disclose this material, our internal procedures require us to seek our clients' consent. Please let us know if you would like us to provide this material. None of these matters were put to MyBudget. We had no opportunity to correct them in circumstances where it would have been reasonable to provide such an opportunity. In the ABC's dealings with MyBudget the journalist, Mr Greg Hoy, made no reference to [L] or [W]. 2. The Segment alleges that MyBudget charges high fees and always prioritises payment to itself, leaving the creditors of a particular debtor to fight for what remains. This is untrue. MyBudget charges fees of a reasonable level which vary to take account of each debtor's individual circumstances. In the event that a debtor cannot afford to pay both fees and their debts in a particular period, MyBudget's practice is to forego its fees for that period. MyBudget 'writes-off tens of thousands of dollars in unpaid fees each year, and uniformly elects not to pursue clients who do not pay. 3. The Segment infers that MyBudget preys on members of the community who are in poor financial circumstances rather than referring them to lower cost schemes run by charities or Financial Counselling Australia. This is not the case. As Ms Tammy May, MyBudget CEO, informed the ABC by email prior to the publication of the Segment, MyBudget commonly refers people with limited financial means to various not for profit financial counsellors and charities. Approximately 3,280 people have been referred to such services in 2013 alone.

30 The ABC could easily have taken steps to ensure that the material facts reported in the Segment were accurate and reported in context. Standards 4.1 and 4. 5 The manner in which information on which the Segment was based was collected demonstrates a lack of impartiality on the part of the ABC. [L] and [W] were afforded the opportunity to provide their version of events regarding their interactions with MyBudget. MyBudget was not aware of any allegations being made by these former customers until the story aired. MyBudget was not afforded the opportunity to provide information as to what happened in each case, despite the fact that an interview with Ms May was recorded for the Segment. By failing to afford MyBudget the same opportunities as [L] and [W], the ABC demonstrated a lack of impartiality. In addition, the ABC was not frank as to the purpose of its interview with Ms May prior to its occurrence. The ABC indicated that it wanted to hear Ms May's perspective on today's trends regarding Australians facing financial difficulty, and how MyBudget deals with this issue. At no stage prior to interview were allegations made by anyone regarding the conduct of MyBudget mentioned. The conduct of the ABC suggests that it sought to interview Ms May at a time when she had no notice of the allegations it actually intended to raise. This suited the agenda of the Segment, being to criticise the activities of MyBudget. Standards 5.1 and 5.3 For the reasons canvassed above, the ABC breached these Standards. In addition to matters previously addressed, the Segment also inferred that Ms May had become extremely wealthy by profiteering from financially disadvantaged people. This is a gratuitous, unwarranted and untrue attack on Ms May's character. The reference to Ms May as 'glamorous' was, in the context of the publication, gratuitous and intended to portray her unfavourably. Ms May's personal wealth is significantly less than amount claimed. At the time this figure was released by BRW, MyBudget issued a statement which addressed this fact. The ABC made no mention of the statement, and did not provide Ms May with a fair opportunity to respond to these assertions. Also, the ABC reporter was asked by MyBudget to indicate the matters he wished to discuss prior to conducting an interview with Ms May. There were detailed communications on the matter and the matters the ABC chose to disclose (and not disclose) can only show that it intended to deliberately mislead Ms May and MyBudget. Consistent with that, after the interview with Ms May occurred, the ABC reporter was asked when he intended to air the Segment by our client. There was no response.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 31 Error: Reference source not found Attachment C ABC’s submissions To the complainant on 27 February 2014: Thank you for your letter regarding the 7.30 story The businesses cashing-in on people under financial stress. In keeping with the Corporation's complaint handling procedures, it has been referred to me for response. We apologise for the delay in responding. The reporter has been on leave over the summer period and his cooperation and advice was essential to a proper investigation of your concerns. Your concerns have been investigated by Audience and Consumer Affairs, a unit which is separate to and independent of program making areas within the ABC. We have carefully considered your concerns and information provided by the program, reviewed the broadcast and assessed it against the ABC's editorial standards for accuracy, impartiality and fair and honest dealing. 7.30 has explained its original intention was to report on the number of Australians suffering financial distress in the lead up to Christmas, the reasons why and the options available to those people. The program sought to discuss this with organisations dealing with those in financial distress and the first organisation it contacted was MyBudget, based on the fact that it heavily promotes itself to people suffering financial distress as "Australia's largest, trusted personal budgeting specialist". 7.30 advise that it soon discovered broad and consistent criticism of MyBudget within the financial counselling sector, with many informed, senior staff of a range of financial counselling services expressing concern that MyBudget was responsible for creating greater financial burdens for customers it had promised to assist. The program refined its focus to examine the personal budgeting industry and its impact on the financially distressed. 7.30 satisfied itself that this issue was highly newsworthy and represented a matter of significant public interest. Accuracy 2.1 Make reasonable efforts to ensure that material facts are accurate and presented in context. 7.30 has explained that the claims made by [L] and [W] in the broadcast were corroborated by financial counsellors familiar with their specific cases, and their concerns were consistent with a broad pattern of criticism of MyBudget, which the program confirmed with a range of financial counsellors who had direct dealings with its dissatisfied customers. The sources relied upon by 7.30 included Financial Counselling Australia, the Consumer Credit Legal Service, the Salvation Army and other financial counsellors contacted during the production of the report. The program confirmed this pattern of criticism included poor budgeting advice, bills going unpaid, vulnerable customers not properly understanding the service, high up-front and on-going fees, negotiations with creditors not taking place as promised, inappropriate advice about bankruptcy options and delays in responding to requests to change arrangements. The specific criticisms expressed in the two case studies of [L] and [W] are consistent with these broader criticisms of MyBudget, and the reporter put those general criticisms to Ms May for response;

32 GREG HOY: Well they say that you ensure that you get paid, but very often creditors don't and the victims can end up in a worse predicament. TAMMY MAY: We've helped over 30,000 Australians countrywide, and if that was the case, then we wouldn't have a very good business and we wouldn't have clients coming to us month on month and have this growing business of- that's growing at more than 50 per cent per annum. GREG HOY: Some say you just profiteer off those in financial distress. Does that worry you? TAMMY MAY: It doesn't necessarily worry me because I know what we do improves our clients' financial position, and actually, the amount of clients that I hear tell me that MyBudget has saved their life, helped improve their financial position, let alone save their marriage, is so encouraging. GREG HOY: The concern is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you? TAMMY MAY: Oh, that's absolutely not the case at all because we make sure our fees are affordable for our clients. And the other thing is they're not locked into a long-term contract. They can give us 30 days' notice and actually leave us if the service wasn't working. We are satisfied that 7.30 met the reasonable efforts requirement in standard 2.1 by confirming the nature, extent and accuracy of the criticisms expressed by the two case studies in the report with multiple sources. We are satisfied that 7.30 made reasonable efforts to ensure those case studies were an accurate reflection on the broad and consistent criticism made about MyBudget by a range of dissatisfied customers, that those general criticisms were put to Ms May for response and that her response was prominently presented, in context. We are satisfied that it was relevant, and in context, for the program to present the broad criticism, expressed by both customers and financial counsellors, that MyBudget's fees are too high and that it prioritises payment to itself before a customer's creditors. We note this criticism was put to Ms May during her interview, and that her response was included in the broadcast; GREG HOY: Well they say that you ensure that you get paid, but very often creditors don't and the victims can end up in a worse predicament. TAMMY MAY: We've helped over 30,000 Australians countrywide, and if that was the case, then we wouldn't have a very good business and we wouldn't have clients coming to us month on month and have this growing business of- that's growing at more than 50 per cent per annum. 7.30 confirmed there is widespread agreement within the financial counselling and charity sectors that the personal budgeting industry is significantly under-regulated, and that MyBudget and other companies in the industry, require much more stringent regulation. Although 7.30 undertook considerable research on the extent to which this industry is regulated, it was unable to confirm the factual basis for Ms May's claim that MyBudget is "stringently" regulated. The program's research included a detailed explanation from the Federal Department of Treasury Consumer Credit service, which included the advice that; "MyBudget are not "stringently" regulated on credit regime. They do have a credit licence, but ASIC do not have regulatory power where all they are doing is making repayments on credit contracts on your behalf, or where they are negotiating repayments with a credit provider.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 33 Error: Reference source not found ASIC certainly do not have power in relation to when MyBudget do anything regarding other consumer contracts that are not credit contracts (i.e. telco, utilities). Further, the obligation under the NCCP Act to do all things necessary to engage "efficiently, honestly and fairly" only relates to licensees' credit activities authorised by the licence, not its whole business. MyBudget are not stringently regulated under the National Consumer Credit Protection Act 2009. If you look at the license authorisation, they are authorised to engage in credit activities other than as a credit provider by providing a credit service. If you look at the definitions in s6, 7 and 8 of the NCCP as to what a credit service is, then it is clear MyBudget is not undertaking any of those activities, they are not suggesting a consumer apply for a particular credit contract, apply for an increase, remain in a particular credit contract, etc. As such, no positive obligations flow. Further, where you have clients in receipt of Newstart and Disability Support Pension, none of their debts are "credit contracts". The NCCP does not apply at all, as the debts are not consumer credit contracts. The NCCP does not apply. We have lodged disputes in the Financial Ombudsman Service against MyBudget. We have been advised that FOS cannot look at the amount of a fee and can only look at a breach of a legal obligation or duty. We scoured the NCCP and found no positive duty on MyBudget and consequently had to argue under the Australian Consumer Law, tort and contract." I am advised by 7.30 that Ms May's claim that MyBudget was adequately regulated was initially included in the report, but owing to time constraints the program was unable to examine this aspect of the industry in any detail and as such it was not included in the broadcast. Given the program's research confirmed many informed concerns about the lack of regulation of this burgeoning industry, and the inability of the program to examine this issue in detail, we are satisfied there was no editorial requirement for 7.30 to include Ms May's statement. Nevertheless, we note your statement that MyBudget is subject to "stringent regulation". We note that Ms May informed the reporter that her company refers people with limited financial means to not-for-profit financial counselling services and charities. 7.30 has noted that Ms May has also publicly stated in MyBudget promotions that there was nowhere else to send the many customers her company now has, and so she decided to establish a business to help them herself. This report was focused on the concerns raised by financial counsellors and charities about MyBudget's dissatisfied customers, not those who have been referred elsewhere. The report did not state that MyBudget "preyed" on people in poor financial circumstances. We are satisfied that it is self-evident that MyBudget is a for-profit company whose service is directed at, and customer base consists of, those suffering severe financial difficulty. I am advised by the program that [the Executive Director, Financial Counselling Australia], [the Representative, Consumer Credit Legal Centre] and other counsellors were very specific in their criticisms of MyBudget and were not speaking generally, as Ms May "suspects". Financial Counselling Australia has intimate knowledge of the two case studies featured in the report and explained to the reporter that the experiences of [L] and [W] are consistent with a strong pattern of problems counsellors across the country are reporting following the exponential growth of MyBudget, in particular, and the industry more generally; GREG HOY: [the Executive Director, Financial Counselling Australia], is concerned about the growing for-profit debt counselling market represented by services like MyBudget.

34 [EXECUTIVE DIRECTOR, FINANCIAL COUNSELLING AUSTRALIA]: We are really worried about for-profit providers targeting people in financial difficulty who only offer one solution, a solution that involves high fees, high set-up costs, ongoing fees. [REPRESENTATIVE, CONSUMER CREDIT LEGAL CENTRE]: They always prioritise the payment to themselves first and the payment to the creditors are largely left to be sort of fought amongst those creditors. And I think there's a great deal of self-interest in these organisations and they're in effect profiteering off people's hardship. GREG HOY: Some say you just profiteer off those in financial distress. Does that worry you? TAMMY MAY: It doesn't necessarily worry me because I know what we do improves our clients' financial position, and actually, the amount of clients that I hear tell me that MyBudget has saved their life, helped improve their financial position, let alone save their marriage, is so encouraging. In light of this, we are satisfied that Ms May's comments were presented in context and are in keeping with the accuracy standards in 2.1 of the ABC Code of Practice. We note the report accurately attributed the claim that Ms May has an estimated personal fortune of $20 million to its source, the BRW; GREG HOY: MyBudget has made its glamorous founder, Tammy May, very rich. Named Telstra's South Australian Businesswoman of the Year. BRW estimates her personal wealth at $20 million. All from offering to help victims of financial distress. MyBudget manages their income and takes responsibility for paying their debts, deducting what Tammy May describes as "small fees"- an admin' fee of around $2,000 a year, plus a substantial establishment fee. 7.30 has explained that it considered the above references to Ms May to be relevant context, based on her high-profile and the fact that her image is so closely associated with promoting the company. The ABC understands that MyBudget is a for-profit business and that the principal source of that profit is the fees charged to people in severe financial distress. We are satisfied that that the reference to Ms May as "glamorous" was presented in context and was not made gratuitously. We have concluded that the report's reference to Ms May accumulating her wealth ''from offering to help victims of financial distress" is accurate and in keeping with standard 2.1. Impartiality 4.1 Gather and present news and information with due impartiality. 4.5 Do not unduly favour one perspective over another. It is important to understand that impartiality does not require that every perspective receives equal time, or that every facet of every argument is presented. We are satisfied that the report included a range of principal relevant perspectives, that the criticisms made about MyBudget were followed by that company's clear and emphatic responses to those criticisms and we have concluded that no perspective in the report was unduly favoured over another. Fair and Honest Dealing

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 35 Error: Reference source not found 5.1 Participants in ABC content should normally be informed of the general nature of their participation. 5.3 Where allegations are made about a person or organisation, make reasonable efforts in the circumstances to provide a fair opportunity to respond. 7.30 has referred to a copy of its initial email approach to MyBudget, requesting an interview with Ms May to seek her perspective on the following; "As Christmas approaches we were hoping to do an interview with your founder Tammy May to hear her perspective on today's trends re numbers of Australians facing financial difficulty. What she puts this down to. MyBudget's approach to dealing with this." The program has advised that MyBudget responded and inquired whether there were "any other questions apart from the ones you proposed?", to which the reporter responded that there may be further questions, depending on Ms May's comments or other information gathered by the program on these issues in the course of its research. 7.30 has provided the following .statement regarding its approach to the interview; "In the course of the interview we put to MyBudget the general issues first flagged and explained there were strong criticisms of MyBudget raised with us by Financial Counsellors in the field. Ms May's responses to such criticisms were forthright and strong." It is important to understand that there was no editorial requirement for the program to set out in precise detail every issue or question that may be raised during an interview, including specific customer complaints. Given the reporter's email setting out the general nature of the issues to be raised with Ms May; her perspective on today's trends regarding the numbers of Australians facing financial difficulty, what she puts this down to and MyBudget's approach to dealing with it, we are satisfied that7.30 adequately provided MyBudget with the general nature of its participation in the report. We note that it was made clear to MyBudget that there may be further questions, depending on the comments of Ms May and any other issues or information that may arise during the program's research. The reporter has advised that he informed MyBudget, prior to the interview that the program was just starting to research the issue and would be speaking widely with financial counsellors and not for profit charities as part of its research. At the time of the interview with Ms May, 7.30 had not yet interviewed [L] or [W], so could not put their specific claims to her for response. Those two case studies were included in the report to illustrate the consistent nature of the complaints made by MyBudget customers to financial counselling services that 7.30 spoke to while producing the report. As the founder and head of the company, it is expected that Ms May would have intimate knowledge and understanding of its procedures and administration, including its history of dissatisfied customers and the nature of their complaints and criticism. We are satisfied that she would be aware of, and well placed to respond to, the critical issues raised by the reporter. We note that Ms May responded to the questions with confidence and assurance and clearly stated her responses to the criticism raised by the reporter. For these reasons we have concluded the program met the editorial requirements of 5.1 and 5.3

36 We are satisfied there was no editorial requirement for the program to offer Ms May a fair opportunity to respond to the fact the program noted that BRW had estimated her wealth at $20 million. A copy of the ABC Code of Practice is enclosed, for your reference. Should you be dissatisfied with this response to your complaint, you may be able to pursue the matter with the Australian Communications and Media Authority http://www.acma.gov.au Please be assured that your concerns have been brought to the attention of the program's Executive Producer. The ABC appreciates the opportunity to respond to your concerns.

To the complainant on 24 March 2014: Thank you for your letter regarding the 7.30 story The businesses cashing-in on people under financial stress. For the reasons set out in our previous response, we are satisfied the broadcast is in keeping with the Corporation's editorial standards. While noting your concerns regarding the specific criticisms raised by the case studies in the report, we are satisfied that 7.30 met the reasonable efforts requirement in standard 2.1 by confirming the nature, extent and accuracy of the criticisms expressed by those case studies with multiple sources. We are satisfied that 7.30 made reasonable efforts to ensure those case studies were an accurate reflection of the broad and consistent criticism made about MyBudget by a range of dissatisfied customers, that those general criticisms were put to Ms May for response and that her response was prominently presented, in context. We are satisfied that it was relevant, and in context, for the program to present the broad criticism, expressed by both customers and financial counsellors, that MyBudget's fees are too high, that it has failed to make payments to creditors on time and that it prioritises payment to itself before a customer's creditors. We note these criticisms were put to Ms May during her interview, and that her response was included in the broadcast. We are satisfied the program informed MyBudget of the general nature of their participation in the report, as required by standard 5.1 of the ABC Code of Practice. The ABC Code of Practice is available online at the attached link; http://about.abc.net.au/wp- content/uploads/2012/12/CodeofPractice2013.pdf Should your client remain dissatisfied with our response to their complaint, they may be able to pursue the matter with the Australian Communications and Media Authority http://www.acma.gov.au

To the ACMA on 24 March 2014: Standard 5.1 Standard 5.1 requires that participants in ABC content should normally be informed of the general nature of their participation.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 37 Error: Reference source not found In email exchanges with MyBudget and MyBudget’s public relations company (attached), the reporter provided the following information about the general nature of Ms May’s participation in the program: - As Christmas approaches we were hoping to do an interview with your founder Tammy May to hear her perspective on today’s trends re numbers of Australians facing financial difficulty. What she puts this down to. MyBudget’s approach to dealing with this. - As for other questions. Perhaps there will depending on what Tammy M. has to say or what others have to say about current trends. The excerpts from the interview with Ms May incorporated in the segment illustrate that trends in numbers of Australians facing financial difficulty and MyBudget’s approach to dealing with this issue were canvassed: - TAMMY MAY, FOUNDER, MYBUDGET: We're finding all of the cities, there's a growth in people feeling that the financial strains, particularly around the rising cost of utilities. - TAMMY MAY: It can be anywhere from $600 to $1,500. In fact, a lot of the time, people are telling us, our clients are telling us, that they don't even recognise the fees. At the time of the interview with Ms May, the reporter was at an early stage in his research into Australians facing financial difficulty and emerging trends. Prior to the interview being conducted, others to whom the reporter was speaking were expressing concerns about the emergence of commercial enterprises targeting this financially distressed group, including MyBudget. The reporter’s inclusion of questions reflecting criticism of MyBudget’s practices was consistent with his pre-interview advice that other questions might be put to Ms May depending on what she or others had to say about current trends. Ms May readily responded to these criticisms: - TAMMY MAY: We've helped over 30,000 Australians countrywide, and if that was the case, then we wouldn't have a very good business and we wouldn't have clients coming to us month on month and have this growing business of - that's growing at more than 50 per cent per annum. - TAMMY MAY: It doesn't necessarily worry me because I know what we do improves our clients' financial position, and actually, the amount of clients that I hear tell me that MyBudget has saved their life, helped improve their financial position, let alone save their marriage, is so encouraging. - TAMMY MAY: Oh, that's absolutely not the case at all because we make sure our fees are affordable for our clients. And the other thing is they're not locked into a long-term contract. They can give us 30 days' notice and actually leave us if the service wasn't working. - The program satisfied the requirement to advise MyBudget of the ‘general nature’ of Ms May’s participation in the program. Standard 5.3 Standard 5.3 requires that where allegations are made about a person or organisation, reasonable efforts should be made in the circumstances to provide a fair opportunity to respond.

38 The program satisfied the requirement to make reasonable efforts by arranging an interview with Ms May in which she was given the opportunity to respond to allegations that MyBudget profiteered from those in financial distress, charging high fees while mismanaging debt repayments. GREG HOY: Some say you just profiteer off those in financial distress. Does that worry you?

TAMMY MAY: It doesn't necessarily worry me because I know what we do improves our clients' financial position, and actually, the amount of clients that I hear tell me that MyBudget has saved their life, helped improve their financial position, let alone save their marriage, is so encouraging. And: GREG HOY: The concern is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you?

TAMMY MAY: Oh, that's absolutely not the case at all because we make sure our fees are affordable for our clients. And the other thing is they're not locked into a long-term contract. They can give us 30 days' notice and actually leave us if the service wasn't working. And: GREG HOY: Well they say that you ensure that you get paid, but very often creditors don't and the victims can end up in a worse predicament.

TAMMY MAY: We've helped over 30,000 Australians countrywide, and if that was the case, then we wouldn't have a very good business and we wouldn't have clients coming to us month on month and have this growing business of - that's growing at more than 50 per cent per annum. Standard 5.3 requires consideration of the circumstances and what is reasonable. The circumstances here were that the program had not yet interviewed [L] or [W] when the interview with Ms May was conducted. However, the allegations of profiteering and mismanagement which lay at the heart of [L’s] and [W’s] claims had already been put to Ms May at interview. Ms May’s responses to these allegations were included in the broadcast. There has been no breach of standard 5.3.

To the ACMA on 20 November 2014 Standard 5.1 …

The obligation imposed by standard 5.1 is qualified. This wording is deliberatively employed to ensure that the standard supports good journalism and does not compromise public access to information. It is in the nature of journalism that works evolve as a story progresses. In this case, a story idea about Australians facing financial difficulty and MyBudget’s approach to this

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 39 Error: Reference source not found growing market became a more rounded piece after the reporter looked into criticisms that had been levelled at companies providing these services. [Standard] 5.1 imposes no obligation on the ABC to set out the detailed elements it intends to cover with a particular interviewee. Nor does it oblige the ABC to inform the interviewee of the final shape of the story. The Code requires only that participants should normally be informed of the general nature of their participation. The general nature of Ms May’s participation did not change as the story came into clearer focus. Her participation was always to be as CEO of MyBudget, answering questions about the market for debt management services, MyBudget’s approach, and any other relevant questions which emerged from Ms May’s answers and views elicited from others. This is precisely what occurred in the interview. …The reporter stated directly in his first email that MyBudget’s approach would be a focus of the interview. Given that it was 7.30 seeking this interview - the ABC’s flagship current affairs program with a reputation for rigorous journalism – there could be no reasonable expectation that the reporter would not ask challenging questions about MyBudget’s approach to dealing with its customers in a market which exists precisely because its customers are financially vulnerable. The reporter has also advised that on 26 November he spoke by telephone with MyBudget’s public relations adviser and explained that the program would cast a wide net to research the story, as is normal practice for 7.30. He told the adviser that the program intended to speak with financial counsellors and charities around Australia to develop an understanding of the issues and the story itself. During further exchanges with the public relations adviser, the reporter made clear that other questions may be asked depending on what Ms May or others had to say. Furthermore, we do not agree that the story as broadcast was ‘a feature about the specific allegations of L and W’. It was a story about the growth in for-profit debt counselling services and financial counsellors’ experience of systemic problems in the way such services are delivered, as evident in repetitive complaints from customers of such services. The accounts of L and W were suggested to the program by financial counsellors as illustrative of the systemic problems being reported. …

Standard 5.3 Standard 5.3 provides that ‘Where allegations are made about a person or organisation, make reasonable efforts in the circumstances to provide a fair opportunity to respond’. The [ACMA] lists the allegations that were put to Ms May as follows: i) ‘Well they say that you ensure that you get paid, but very often creditors don’t and the victims can end up in a worse predicament.’

ii) ‘Some say that you just profiteer off those in financial distress. Does that worry you?’

iii) ‘The concern is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you?’

However, [the ACMA] claims that the following allegations were not put to Ms May:

40 iv) ‘Rather than help them, however, customers who spoke to 7.30 say My Budget only made matters worse, charging high fees while mismanaging debt repayments.’

v) ‘I wasn’t getting told about payments not being made.’

vi) ‘My Budget’s service fees were deducted, he says, but MyBudget neglected to renegotiate with or pay key creditors’

vii) W’s account of his conversation with the bank in which he was told that MyBudget had not contacted them: ‘”Has MyBudget not been contacting you about what’s going on?” And he’s going, “No, I haven’t heard anything. We haven’t received any money. We – you know, they haven’t even contacted us.”’

As the ABC has explained, the program had not yet interviewed L or W at the time the interview with Ms May was conducted. However, L and W’s stories were selected because they were illustrative of the systemic problems claimed by financial counsellors. These systemic problems had been put to Ms May at interview. Specifically: - Allegation iv) – that MyBudget made matters worse for some customers, charging high fees while mismanaging debt repayments – is reflected in allegation i) – that often creditors don’t get paid and customers can end up in a worse predicament – and allegation iii) – that MyBudget charges heavy fees. - Allegation v) – that payments were not being made to creditors and customers were not aware of this - is incorporated in allegation i) – that often creditors don’t get paid and customers can end up in a worse predicament. - Allegation vi) – that MyBudget charged its fees but mismanaged payments to creditors – is precisely what is contained in allegation i) – that MyBudget prioritises payment of its fees, but creditors are often not paid. - Allegation vii) - that MyBudget had not contacted a creditor or made payments – is again explicit in allegation i) – that creditors don’t get paid. The criticisms that were put to Ms May for response at interview were not ‘broad’: they were the very criticisms made by L and W, illustrative of the common complaints that peak bodies had been raising directly with MyBudget. Ms May rejected the criticisms that were put to her. She did not concede any problems with MyBudget’s service delivery. Financial Counselling Australia had told the program that its counsellors had been reporting problems with MyBudget ‘pretty much since its inception’ and the organisation had met with MyBudget directly on a number of occasions to discuss these concerns. These meetings took place both before 7.30’s interview with Ms May and have continued since broadcast. The Executive Director of Financial Counselling Australia, Fiona Guthrie, told the program of the many casework experiences that illustrate problems of poor training, poor standards and inappropriate advice involving at times very vulnerable people, and which have exacerbated the financial hardship of MyBudget clients.

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 41 Error: Reference source not found Financial Counselling Australia also advised the program that the South Australian Financial Counsellors Association had met with MyBudget a number of times to discuss concerns, both before and after the 7.30 item aired. During the interview, the reporter identified to Ms May that Uniting Church, Salvation Army and St Vincent de Paul financial counsellors were amongst those who had raised these concerns with the program. …We note the ACMA’s references to the ABC’s ‘Fair Opportunity to Respond’ Guidance Note. The ACMA states that the ‘Note places focus on a fair opportunity to respond prior to disclosure of allegations’. To be clear, this reference is to the focus of the particular Guidance Note, not the scope of the standard overall. The ACMA also draws attention to this statement: ‘It is not usually enough to tell the person that you wish to talk to them about some general topic. Even if you believe the person is familiar with the allegations already, you should not assume that and should set out the relevant information.’ During the interview with Ms May, the reporter did not simply say that he wished to talk to her about a general topic. He set out the relevant information, which was included in his questions: - ‘Well [charities we have been speaking to] say that you ensure that you get paid, but very often creditors don't and the victims can end up in a worse predicament’ - ‘Some [charities we have been speaking to] say you just profiteer off those in financial distress. Does that worry you?’ - The concern [of these charities we have been speaking to] is that people get drawn in with big promises and then you milk heavy fees out of those who can least afford it. Do you? [On the ACMA’s view that] ‘it would not have been unreasonable to expect the ABC to provide MyBudget with an opportunity to respond to [allegations iv) to vii)] prior to the broadcast’. Firstly, we would make the point that the standard does not require every reasonable effort to be made: it requires efforts that are reasonable in the particular circumstances. Rephrasing the standard to focus on what would not have been unreasonable does not assist in assessing compliance. Secondly, the program had already put these allegations to Ms May during interview, she had provided clear responses which addressed the criticism, and it was unnecessary for this step to be repeated. It was reasonable in the circumstances for the program to be satisfied that the allegations had been put to Ms May and answered. The approach taken in this story is quite typical of journalistic practice whereby the accumulated criticisms of a number of individuals or groups are put to an interviewee for response. There was no misrepresentation of Ms May’s response and we disagree …that ‘The result was that Ms May was not given the opportunity to counter [L and W’s] allegations and an ordinary reasonable viewer could have formed the impression that she did not challenge them.’ It is clear from the broadcast that Ms May challenged each of the critical propositions put to her. It is also clear from the broadcast that Ms May was responding to criticisms of systemic failings in MyBudget service delivery, not to any individual case. The circumstances were such that a viewer could not reasonably have formed the impression that Ms May did not challenge the criticisms L and W made of MyBudget. …It is unsurprising that the allegations put to Ms May at interview were more specific than what had been conveyed in the emails arranging interview. The emails from the reporter to MyBudget did not provide an opportunity to respond; they were preliminary to this step, being

42 concerned with establishing whether Ms May would agree to an interview, the general nature of the issues to be discussed, and logistical arrangements. Again, we note that these emails were not confined to ‘trends’: they specifically indicated that the reporter wanted to discuss MyBudget’s approach and stated that other questions may also be asked, depending on his discussions with other sources. These emails were also augmented by a discussion between the reporter and MyBudget’s public relations adviser in which the reporter explained that the program would cast a wide net to research the story, and would be speaking with financial counsellors and charities around Australia to develop an understanding of the issues and the shape the story would take.

Standards 4.1 and 4.5 …

Fair treatment …As set out above, the broadcast included the questions that were put to Ms May and her responses. The questions did not refer specifically to L or W, but asked for Ms May’s response to what were alleged to be systemic problems in MyBudget’s approach which were reflected in L and W’s accounts. An ordinary reasonable viewer would not have concluded that ‘MyBudget was not able to defend its position in regard to [L and W’s] specific allegations’. Rather, an ordinary reasonable viewer would have understood that Ms May rejected criticism of systemic failings in MyBudget’s approach, and that she had not been asked to respond to L and W’s individual cases. As set out above, the program knew from speaking to charities and financial counselling organisations that MyBudget was familiar with these common complaints about its practices. It was these common complaints that were put to Ms May so that her response could be fairly included in the broadcast. The program has advised that it has been led to understand that since the segment aired, a representative of MyBudget has met with Financial Counselling Australia and has accepted that the company has issues that it needs to address. A working party has been established with representatives of MyBudget, Uniting Communities and the South Australian Financial Counsellors Association and the group’s terms of reference have been accepted. MyBudget has requested a proposal from Uniting Communities about providing training to MyBudget staff. MyBudget has also committed to appointing a new manager for Internal Dispute Resolution.

Open mindedness …It is not clear to the ABC how lack of challenge to L and W’s accounts could be construed as a lack of open mindedness, particularly in view of the [proposition] that in relation to statements that MyBudget charges high fees and prioritises payments to itself, ‘the material was presented and/or reinforced by subject matter experts (including to some extent by Ms May)’ and both the views of MyBudget and its critics ‘were explored in the segment and neither was misrepresented’. The reporter had made reasonable efforts to confirm L and W’s accounts and had included them in the program to illustrate the systemic concerns being raised. No

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 43 Error: Reference source not found allegations were being made about L or W that would require a more challenging approach to their accounts in the broadcast. As will be clear from the above, we do not agree that MyBudget was given no opportunity to contest the criticisms that had been made of its business model and service delivery. The criticisms of MyBudget that were contained in L and W’s accounts had been put to Ms May at interview and her responses included in the broadcast. The language…– ‘victims’, ‘milk’ – reflected the concerns that had been expressed to 7.30 and which the program was now putting to Ms May for response. This was not editorial commentary from the program. This was made clear in the surrounding context: ‘they say that you ensure that you get paid, but very often creditors don’t and the victims can end up in a worse predicament’; ‘[t]he concern is that people get drawn in with big promises and they you milk heavy fees … Do you?’ The reporter did not employ sarcasm; his tone was measured and courteous; he put these allegations to Ms May in this form so that she could understand the strength of the criticisms that had been made and respond appropriately. Putting critical propositions to interviewees is an important means by which journalists pursue the public interest. The use of these two phrases in this context is consistent with impartial journalism and does not demonstrate that the reporter had made a pre-judgement.

Opportunities over time for principal relevant perspectives on matters of contention to be expressed The ABC’s impartiality standards do not oblige programs to provide opportunities for principal relevant perspectives to be expressed on all matters of contention. Such a requirement would unduly constrain journalistic enquiry and be contrary to the Code’s note on interpretation. It would also run counter to the principles relevant to section 4 of the Code which explicitly state that ‘Impartiality does not require that every perspective receives equal time, nor that every facet of every argument is presented’. In this instance, the criticisms contained in L and W’s accounts were put to Ms May for response. Her principal relevant perspective on the contentious matter of alleged systemic problems in MyBudget’s approach to dealing with its customers was presented in the program …

44 Attachment D

Some considerations to which the ACMA has regard in assessing whether or not particular content is factual material for the purposes of broadcasting codes of practice  In practice, distinguishing between factual material and other material, such as opinion, can be a matter of fine judgement.  The ACMA will have regard to all contextual indications (including subject, language, tenor and tone and inferences that may be drawn) in making its assessment.  The ACMA will first look to the natural and ordinary meaning of the language used.  Factual material will usually be specific, unequivocal and capable of independent verification.  The use of language such as ‘it seems to me’ or ‘we consider/think/believe’ will tend to indicate that the content is contestable and presented as an expression of opinion or personal judgement. However, a common sense judgement is required and the form of words introducing the relevant content is not conclusive.  Statements in the nature of predictions as to future events will rarely be characterised as factual material.  Statements containing hyperbole will rarely be characterised as factual material.  The identity of the person making a statement (whether as interviewer or interviewee) will often be relevant but not determinative of whether a statement is factual material.  Where it is clear in the broadcast that an interviewee’s account is subjective and contestable, and it is not endorsed or corroborated, their allegations will not be considered as factual assertions.  Where an interviewee’s stance is separately asserted or reinforced by the reporter or presenter, or proof of an allegation is offered so that it becomes the foundation on which a program or a critical element of the program is built, it may be considered a factual assertion.6

 Sources with expertise may be relied on more heavily than those without, in determining whether material is factual, but this will depend on: o whether the statements are merely corroborative of ‘lay’ accounts given by other interviewees, o the qualifications of the expert, o whether their statements are described as opinion, o whether their statements concern past or future events7 and o whether they are simply comments made on another person’s account of events or a separate assertion about matters within their expertise.

6 See investigation 2712; Channel Seven Adelaide Pty Limited v Australian Communications and Media Authority [2014] FCA 667; 7 See investigations 3066, 2961

ACMA Investigation Report 3214 – 7.30 broadcast by the ABC on 9 December 2013 45