Powered by MOMENTUM MEDIA
the adviser logo
Compliance

ASIC flags credit repair risks

by Reporter4 minute read
ASIC

The regulator is running a month-long campaign to warn consumers about the risks associated with seeking credit repair and debt management services.

The Australian Securities and Investments Commission (ASIC) has announced that it will commence a month-long campaign — along with the commonwealth, state and territory governments — designed to inform consumers of the high level of fees charged by credit repair and debt management firms.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

ASIC claimed that consumers may be left worse-off, with some firms failing to adequately address the credit and debt issues of their clients.

“Consumers experiencing money or debt problems don’t need to put themselves under further financial stress by paying high fees to firms providing credit repair and debt solution services,” ASIC deputy chair Peter Kell said.

Advertisement
Advertisement

“If people are having difficulty obtaining loans because of an incorrect default listing on their credit report, there are actions they can take that are free of charge to have it corrected.”

Mr Kell urged consumers who suspect that a credit default has been wrongfully listed against them to contact their creditor.

“If you aren’t satisfied with the response you receive, you can contact the relevant dispute resolution service for help,” the deputy chair added.

The campaign follows on from a 2016 ASIC report which found that debt management firms:

  • were offering services where fees and costs were not well explained;
  • often required payments be made before services were provided;
  • sometimes used high-pressure sales techniques.

Mr Kell noted that consumers could consider alternative services like financial counselling before engaging a debt solutions firm.

Further, ASIC stated that consumers should be aware that lenders will review their credit report when they apply for credit or a loan and they should check that their credit history details are correct, adding that consumers are entitled to obtain one free copy of their credit report each year from a credit reporting agency.

[Related: ASIC to ‘intensify scrutiny’ of licensing applications]

ASIC flags credit repair risks
asic ta
TheAdviser logo
asic ta

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Anja Pannek CEO PLAN

Anja Pannek named MFAA CEO

The board of the Mortgage & Finance Association of Australia (MFAA) has confirmed that Anja Pannek will be the...

READ MORE
mike felton mfaa ta jdayl5

Aggregator heads reflect on Mike Felton’s legacy

Following on the news that Mike Felton is to retire next month and step down as chief executive of the Mortgage &...

READ MORE
melanie kiely afg ta mzh8zm

AFG non-executive director steps down from board

Australian Finance Group Ltd (AFG) has advised that Melanie Kiely will be stepping down from the AFG board to...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more