ob体育 is warning consumers about companies that claim they can fix a poor credit rating. ob体育 is running a month-long campaign, with other Commonwealth, state and territory agencies, to help consumers understand that by using credit repair and debt management firms they may end up paying high fees.
Consumers should be aware these companies often fail to fix credit and debt issues, which can leave people in a worse financial situation.
ob体育 Deputy Chair, Peter Kell said consumers may not realise that free services exist to help them fix credit reports or resolve their debt problems, such as the National Debt Helpline.
鈥楥onsumers experiencing money or debt problems don鈥檛 need to put themselves under further financial stress by paying high fees to firms providing credit repair and debt solution services鈥�, Mr Kell said.
鈥業f 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.
鈥業f you think you have had a credit default wrongly listed against you, contact the creditor and ask for it to be removed. 听If you aren鈥檛 satisfied with the response you receive you can contact the relevant dispute resolution service for help鈥�, added Mr Kell.
People experiencing debt problems can seek free help and guidance from financial counsellors and the National Debt Helpline on 1800 007 007 or go to ndh.org.au.
In 2016, an ob体育 report[1] found 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 suggested consumers can consider alternative services like financial counselling before engaging a debt solutions firm.
Consumers should be aware that lenders will review their credit report when they apply for credit or a loan and they should check their credit history details are correct. 听Consumers are entitled to obtain one free copy of their each year from a credit reporting agency.
For more information and guidance on , free financial counselling services, and , visit website.
Background
ob体育 is the lead Australian Government agency for financial literacy, consistent with its strategic priority and statutory objective to promote confident and informed consumers and investors.听ob体育's financial capability program includes:
- leading the National Financial Literacy Strategy;
- providing consumer information via ob体育's MoneySmart; and
- delivering ob体育's MoneySmart Teaching program.
The , led and coordinated by ob体育, is a framework to guide policies, program and activities that aim to strengthen Australians' financial capability.
In addition to ob体育, other agencies involved in the campaign include the Australian Competition & Consumer Commission (ACCC), Consumer Affairs Victoria, NSW Fair Trading and the Queensland Office of Fair Trading.
The Federal Court recently found, in proceedings brought by ob体育, that credit repair business Malouf Group Enterprises Pty Ltd and its director Jordan Francis Malouf breached the Australian Consumer Law by making false and misleading representations and engaging in unconscionable conduct. In addition to penalties imposed by the Court, the Malouf Group will pay $1.1 million to consumers (refer: 18-114MR).
Free financial services available to consumers
Financial Counselling
Financial counselling is a free service offered by community organisations, community legal centres and some government agencies. 听Financial counsellors can help consumers solve their money problems.
National Debt Helpline听听
The free hotline - 1800 007 007听-听is open from 9:30am to 4.30pm, Monday to Friday (opening hours can differ in different states) to help consumers struggling with debt. 听Consumers can visit the website for information and resources.
The Department of Agriculture runs a to support primary producers, fishermen and small rural businesses that are suffering financial hardship, for further details call 1800 686 175.
website provides a financial counsellor online search tool to locate a financial counsellor near you.
External Dispute Resolution (EDR) services
A credit repair company may offer to contact an to resolve a consumer case. 听The company could charge a fee, even though those services are free and are designed to be easy for people to use. 听Consumers can save time and money by contacting an Ombudsman directly, rather than going through a credit repair company.
Credit and financial services EDR schemes
(FOS) - 1800 367 287
FOS handles complaints about banking, credit, loans and debt collection, life insurance, superannuation, financial planning, insurance broking, stockbroking, investments, managed funds, timeshares, general insurance, finance and mortgage broking. 听They do not deal with complaints about compulsory third party, private health, public liability and workers' compensation insurance.
(CIO) - 1800 138 422
CIO handles complaints about credit unions, building societies, non-bank lenders, mortgage and finance brokers, financial planners, lenders and debt collectors, credit licensees and credit representatives. 听
Other dispute resolution services
Energy, water and telecommunication ombudsman services provide free advice and conciliation services for consumers with complaints about providers in those industries.
- 听(TIO) - 1800 062 058
- 听- (08) 9220 7555 or 1800 117 000
- 听听(EWON) - 1800 246 545
- 听听(EWOV) - 1800 500 509
- 听(EWOQ) - 1800 662 837
- - 1800 806 380
- 听(EWOSA) - 1800 665 565
- - 1800 001 170
- (for water) - 1800 001 170
- 听(ACAT) - 02 6207 1740
听
[1] ob体育 Report 465, Paying to get out of debt or clear your record: The promise of debt management firms, January 2016