A credit repair business has been ordered to pay penalties totalling $1.7 million after it was found to have breached the Australian Consumer Law.
The Federal Court has found Malouf Group Enterprises, and its director Jordan Francis Malouf, guilty of engaging in “unconscionable conduct” and “misleading consumers” during the period 1 January 2014 and 31 December 2015.
The court has ordered Malouf Group to pay a pecuniary penalty of $400,000 and has fined Mr Malouf $100,000, in addition to the $1.1 million in remediation that the company will be required to pay to affected customers, following an Enforceable Undertaking issued by the Australian Securities and Investments Commission (ASIC).
The court found that Malouf Group engaged in misleading or deceptive conduct by entering customers with no negative credit listings into contracts.
ASIC alleged that Malouf Group’s sales tactics misrepresented the services that it offers to customers, and failed to ascertain if the consumer had negative listings or if any negative listings were able to be removed.
Such breaches included:
The court deemed the conduct “disturbing and unconscionable”, describing it as “cynical and calculated”.
Further, the court found that Mr Malouf was knowingly involved in the contraventions of the Australian Consumer Law. The court noted that Mr Malouf had:
Following the ruling, ASIC deputy chair Peter Kell said: “Consumers who seek out credit repair services should understand that there can be no guarantees that their credit history can be ‘cleaned’. Further, consumers may request corrections to be made to their own credit file for free.”
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