ASIC warns consumers about paying high fees for credit repair and debt advice services
ASIC is warning consumers about companies that claim they can fix a poor credit rating.
ASIC is running a 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.
ASIC 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.
“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,” Mr Kell said.
“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.
“If you think you have had a credit default wrongly listed against you, contact the creditor and ask or it to be removed. if you aren't satisfied with the esponse you receive. you can con-ct the relevant dispute resolution ervice for help: added Mr Kell. People experiencing debt prob-ems can seek free help and guid-ance from financial counsellors and the National Debt Helpline on 1800 007 OW or go to nclh.oro.au. In 2016. an ASIC report found debt management firms
• were offering services where fees and costs were not well ex-plained:
• often required payments be made before services were provided
• sometimes used high-pressure ales techniques Mr Kell suggested consumers can consider alternative services like financial counselling before en-aging a debt solutions firm. Consumers should be aware hat lenders will review their credit eport when they apply for credit or loan and they should check their redit history details are correct. Consumers are entitled to ob-tain one free copy cf their credit report each year from a credit re-porting agency. For more information visit ASIC's Money Smart website at www.moneysmart.gov.au.