ASIC warns con­sumers about pay­ing high fees for credit re­pair and debt ad­vice ser­vices

Alpine Observer - - Regional Extra -

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

for it to be re­moved.

“If you aren’t sat­is­fied with the response you re­ceive, you can con­tact the rel­e­vant dis­pute res­o­lu­tion ser­vice for help,” 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 ASIC re­port 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-presure 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.

Con­sumers are en­ti­tled to ob­tain one free copy of their credit re­port each year from a credit re­port­ing agency.

For more in­for­ma­tion visit ASIC’s MoneyS­martweb­site at www.mon­eysmart.gov.au.

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