When an adverse credit listing comes up on a client’s credit check - it may be hard to know how to help them, or indeed if they should be helped at all.
Sure, we can fit the client in to a non-conforming product – sure, we can tell them to come back when the listing ‘drops off’. But we can’t ignore that there are cases where credit listings are disputable, and a successful dispute can save the client thousands in interest.
‘Bad credit’ may become more prevalent in the future – especially when new data sets open up to lenders in March next year.
It has been demonstrated time and again that despite the free channels open to individuals to dispute their own credit listing, many clients prefer and or need to use an advocate to get results.
But referring clients to other professionals can be a delicate situation. Credit repair – with all of its criticisms from various bodies – including all the way up to ASIC - may leave some brokers unsure of its ethics and indeed its place in credit reporting.
The credit repair industry is currently plagued with short term operators, giving quasi-legal or legal advice without adhering to the restrictions of the law.
So how should those credit repairers who are intent on seeing the important field of credit reporting advocacy survive in coming months and years respond to this criticism? (And some of the criticism is valid by the way).
In the absence of regulation of credit repair today, I believe that the only option for self- regulation is the overarching framework of being an Incorporated Legal Practice, being a firm regulated under the Legal Profession Act 2007.
Apart from offering a framework for regulation, it also offers significant benefits for credit repair:
• A lawyer can act in court processes including the removal of Judgment and Writ services, a non-lawyer cannot act in these proceedings;
• A lawyer can identify legal issues and give your client advice on these;
• A lawyer can prepare binding agreements, conduct formal negotiations and then follow through with enforcement where necessary;
• A lawyer can make formal recommendations to Credit Providers making reference to the law, and making representations on the client’s behalf.
Those credit repairers currently performing the above tasks without a practising certificate may be treading dangerous ground.
• A submission from a lawyer to a Credit Provider will be taken seriously. If requests are ignored real consequences can be deployed.
I have chosen to move my company under this framework, because I believe consumers deserve it - and so does the credit repair industry. The choice is yours as to whether you believe your clients should be disputing inconsistencies on their credit file – and if so which type of advocate should be handling the dispute.
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