ASIC Commissioner Alan Kirkland voiced apprehensions that some of the approximately 100 industry licensees might be participating in unfair or dishonest credit activities, ultimately worsening the financial situations of already vulnerable clients. Reports have surfaced of firms failing to honor commitments made to consumers, raising alarms within the commission.
During the probe, ASIC will review diverse business models within the industry to assess compliance with the law. The industry has been under heightened scrutiny since the implementation of a licensing regime in 2021, aiming to protect consumers from exploitative practices. Since these regulations were put in place, ASIC has already taken legal actions against several entities, including Bakken Holdings, for significant consumer harm.
Bakken Holdings, operator of Solve My Debt Now, was sued by ASIC in August 2023 after accusations of collecting $3.6 million from clients but remitting only $1.1 million to creditors, leaving many customer debts unpaid. Similarly, Chapter Two Holdings Pty Ltd received penalties for allegedly misleading advertising on their website about their debt management achievements.
The review's outcome, anticipated to be published as a public report next year, is expected to shed light on industry practices and offer insights for consumers seeking reliable debt management solutions. ASIC remains committed to taking enforcement actions if any unlawful activities are uncovered during the investigation.
