Following on from our previous article, the Federal Government has warned the public of potential dodgy insolvency advisers. These unregistered and unregulated advisers target vulnerable people who are in financial distress. The Australian Financial and Security Authority (AFSA) recently launched a campaign to raise awareness of the advisers who seeking to exploit individuals who are in financial difficulties.

People who find themselves dealing with large debts for the first time as a result of COVID-19 may be tempted to turn to advisers who say they have a quick fix and later find out what they’ve done is illegal,” AFSA’s Deputy Chief Executive Gavin McCosker explained.

AFSA has provided some guidance on what to look out for. Typically, you should avoid advisers that:

  • Recommend that you include false, exaggerated or fake debts in your bankruptcy application;
  • Promise to get you out of bankruptcy within a few months with a payment;
  • Offer to organise your affairs in a away that your assets are protected in bankruptcy;
  • Charge a large up-front fee; and
  • Advise you bankruptcy or debt agreement will not affect your credit rating.

These types of pre-insolvency advisers often provide no details of any experience or qualifications, have no professional indemnity insurance and are not registered or regulated. This means you will not be able to make a complaint about services provided or seek any form of compensation or refund(s).

“It’s not always easy to spot a dodgy adviser, but if someone offers a solution to your financial problems that sounds too good to be true, it probably is,” he said.

AFSA has been working with the industry to curb these advisers and protect those who are experiencing financial uses. They are actively taking steps to investigate and take action against such advisors, however, it is a difficult and slow process.

Contact us for assistance

Our staff include registered bankruptcy Trustees and Chartered Accountants and we are subject to regulation by AFSA and Chartered Accountants Australian and New Zealand. We pride ourselves on providing correct and honest advice about a debtor’s circumstances.

If you wish to discuss the contents of this article or to explore all the options that may be available to you, get in touch with us on 1300 906 966 or send us an email at mail@cactusconsulting.com.au to arrange a free confidential initial discussion.

Posted on 25-02-21 in Bankruptcy Assistance, Personal Debt Solutions, Personal Debts, Personal finance insights and updates.