In these uncertain times, it’s not surprising so many Australians are being tempted by debt management firms promising a quick-fix solution, an end to crippling debt, and a way out of potential bankruptcy. Unfortunately, many of these businesses operate with little to no financial experience and no regulatory oversight, and their solutions can leave many people worse off in the long term. If you’re considering seeking a financial solution to your spiralling debt situation, it’s vital you heed this warning.
Debt Vultures on the rise
When it comes to the regulation of debt management services, Australia is sadly lagging behind the rest of the world, says Consumer Action Law Centre CEO, Gerard Brody.
In response to a growing concern around the number of debt management firms that promise consumers a way to get out of debt, Mr Brody said these promises simply don’t live up to reality.
“The fact is they [debt management firms] can charge hidden and high fees, they can mislead about what it is they can do, and leave people in further debt,” said Mr Brody.
“Anyone can set up one of these debt businesses — whether it be a debt negotiator, a debt broker or a credit repair agency — without many, or any, regulatory requirements at all,” he said.
In many instances, the consultants at these businesses provide advice that they aren’t qualified to provide, along with financial solutions and repayment schemes that customers simply won’t be able to maintain.
“They can’t respond to people’s individual needs — they’re just there for the hard sell to get you to sign up,” Mr Brody said.
Finding a viable solution
If you are facing a debt crisis or financial hardship, it’s vital you seek help in the right place. Talk to your Mortgage Express broker first: Our team of financial experts can provide advice and financial solutions, best suited to your unique personal needs and action plans that can help you get out of debt without compromising your financial future.
What’s more our advice is tailored to your unique situation, rather than a one-size-fits-all approach. Along with options to refinance your existing mortgage and consolidate your debt, we can assist you with advice around downgrading your home loan, keeping up with your loan repayments, or a solution to refinance in six months’ time if you’re unable to do so now.
Contact our team today to find out more.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.