Close the loophole on “Debt Vultures”

1“Debt vultures” are the so-called debt management firms who promise to help Australians in financial hardship or with listings of payment defaults on their credit reports. They typically offer services such as budgeting, debt negotiation and “credit repair”. They exist in a regulatory black hole, outside the remit of ASIC and finance sector Ombudsman schemes.

ASIC’s recent shadow shopping of the industry revealed high pressure selling techniques, one-size-fits-all products being offered despite their unsuitability, and poor disclosure of high fees – this includes “credit repair” traders selling services that are provided free-of-charge elsewhere.

Around forty representatives from consumer advocacy organisations, industry associations, ombudsman schemes, government agencies and regulators met in Melbourne on 18 February 2016 to discuss the social and industry impacts of businesses that provide quasi-financial service “solutions” to consumers with debt problems or who have concerns about their credit worthiness.

As a result of that meeting the representatives have released a ground-breaking communiqué calling for reform.

Policy contact: Cat Newton: 03 8554 6943 – cat@consumeraction.org.au

Media contact: Jonathan Brown: 0413 299 567 – media@consumeraction.org.au

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