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ASIC Crackdown on Debt Management Firms

Tuesday, May 30, 2017 - Posted by Michael McCulloch

Recently the Australian Securities and Investments Commission ("ASIC") have been investigating the claims by several debt management firms regarding misleading advertising.

The companies investigated to date include:

Capital Debt Solutions
False claims on their website where they claimed it was "trusted and recommended by more than 6,000 Australians." Capital Debt Solutions could not substantiate this claim. Fined $10,800

Debt Assist Australia
Asked by ASIC and subsequently complied with a request to remove a claim on their website that their Debt Agreement proposals were "Government Approved"

Bankruptcy Experts
Asked by ASIC and subsequently complied with a request to remove testimonials on their website there they were unable to substantiate.

ASIC did note that while Debt Agreements are regulated that this does not mean that they are Government approved. ASIC Deputy Chair, Peter Kell, said, "Recommendations and statements, like 'Government Approved' can have a strong influence when vulnerable consumers in financial hardship are seeking help with their debts."

It should be noted that while Capital Debt Solutions complied with the infringement notice that this is not an admission of liability and further investigation by ASIC revealed that they were not in breach of s12DB(1)(e) of the Australian Securities and Investments Commission Act 2001.

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