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‘Unconscionable conduct’: Credit repair group to pay $1.7m

by Reporter4 minute read

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 making of false representations on websites operated by Malouf Group as to its standing as a credit repair company.
  • The display of false testimonials on the Malouf Group websites.
  • The making of false representations as to Malouf Group’s ability to clean up a consumer’s credit history.
  • The making of false representations in Malouf Group’s sales scripts about the work Malouf Group had done for the consumer prior to the payment of Malouf Group fee.

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:

  • devised and implemented the business model of Malouf Group;
  • approved the content of the websites and advertising;
  • approved the content of the sales scripts; and
  • was involved in the training and supervision of sales staff to ensure that they followed the sales scripts.

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.”

[Related: 10 years of jail for most serious Corporations Act breaches]

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