Treasury provided the below summary for the rationale behind this:
“An element of the reforms is protecting consumers from the often predatory practices of debt management firms by requiring them to hold an Australian Credit License when they are paid to represent consumers on matters related to credit activities.“
These changes took place 1 July 2021 with transitional arrangements.
The below link takes you to the ASIC site which provides further detail if you are interested.
Since the anticipated changes were first announced, Fix Bad Credit has been working hard to ensure we can meet our regulatory obligations for complying with the relevant policies and procedures under the National Consumer Credit Protection Act 2009, and in doing so complying with the new license requirements.
These obligations include:
- conduct credit activities efficiently, honestly and fairly;
- have adequate arrangements in place to manage conflicts of interest;
- comply with any applicable credit licence conditions;
- comply with the credit legislation;
- ensure representatives comply with the credit legislation;
- have adequate resources (including financial, human and technological);
- maintain competence to provide the credit activities;
- adequately train representatives and ensure they are competent;
- have adequate risk management systems
- have adequate internal dispute resolution procedures
- have compensation arrangements in place (PI insurance)
- Directors and Managers meet a fit and proper person test.
Fix Bad Credit celebrates the regulation of the industry as now people like Ricky below won’t be negatively impacted by industry cowboys that nearly destroyed his financial future, his relationship and the industry’s reputation.
Adios Amigos! We say goodbye to the cowboy.
Ricky’s Story – why credit repair and debt negotiation industry regulation will benefit everyone, but the cowboys
Ricky is a young man working as a landscape gardener in Perth. In May 2021 Ricky was at work laying artificial grass for the company he works for – Rods Artificial Grass.
A friendly neighbour named CJ complimented Ricky and his team on how great the job was looking, and how hard they were working. Ricky thanked CJ for the compliment, and asked what he did for a job.
The conversation went something like this.
CJ – “I work for a credit repair, and debt solutions company”
Ricky – “Oh you’re one of those guys aye?”
CJ – “It sounds like you have had a bad experience mate – I’m not surprised, unfortunately my industry has a shocking reputation”
Ricky “Well I engaged a company from Queensland Called Credit #$%! (not real name for privacy purposes). I paid them a S*&% load of money, and all they did was send me a PDF telling me what to do. No surprise but that didn’t work. After a lot of frustration, wasted time and effort we ended up going to the Ombudsman. The result of that. The Ombudsman couldn’t do a damn thing about it. All I was left with was further in debt, and a stressed relationship”.
CJ – “Damn Ricky that sucks. Sadly, it is a far too common story, sorry to hear that”.
CJ then spoke to the Fix Bad Credit management team who agreed to step in to help Ricky out.
In just weeks Fix Bad Credit were able to assist Ricky improve his credit score from 210 to 805.
Hear what Ricky has to say now about the industry.
With the introduction of the new regulatory requirements, we hope that the companies like whom Ricky initially dealt with will disappear, improving the industry’s reputation and protecting everyday Australian’s from the industry cowboys.
But don’t believe us – read what the team at Hunt & Hunt Lawyers have to say.
“We predict these changes will herald a major shakeup in the debt management and credit repair industries and we will see many players struggle to obtain and maintain licenses from ASIC.”
We can now proudly announce that Fix Bad Credit is a credit representative of QED Credit Services Pty Ltd licenced with ASIC under the National Consumer Credit Protection Act 2009. Australian Credit Licence (ACL) Number 387856. Our AFCA Membership number is 83926.