“If you’re in debt, who is best to help you?” This is the central question posed in a new “debt dating” video launched earlier this month at www.yourfinancialrights.org. The video follows the pitfalls many Australians face when looking for help with their financial problems.
The video and accompanying website are part of a new financial literacy campaign aimed at steering consumers away from “Debt Management Firms,” otherwise known as Debt Vultures, towards free and independent financial counselling services.
“Anyone who has watched late night TV, listened to commercial radio or typed “debt help” into Google have seen the flood of ads for these financial predators,” said Alexandra Kelly, Principal Solicitor of the Financial Rights Legal Centre. “These companies may look like simple, helpful options for people experiencing financial stress, but often they make things worse through high fees, ill-suited advice or questionable business practices. Their cheap tricks end up being quite expensive. What’s worse is that they prey on those who can least afford it.”
Debt management firms include:
- credit repair companies – who claim to fix your credit ratings
- money managers – who charge you to manage your income, bills and debts
- debt negotiators – who present debt negotiating as something they do as a “professional’ and
- debt agreement brokers – who direct people into debt agreements – a form of insolvency.
A report by the Australian Securities and Investments Commission (ASIC) released earlier this year found that there is “no uniform regulatory framework for debt management firms”.
“ASIC’s report confirmed that these predatory businesses use high pressure sales techniques and sell unsuitable products,” said Financial Rights’ Ms Kelly. “This is leading to a huge number of complaints about these businesses. Something needs to be done at a legislative level to ensure that these business are regulated appropriately.”
The Your Financial Rights video can be seen at www.yourfinancialrights.org and you can follow the campaign on:
@Fin_Rights_CLChttps://twitter.com/Fin_Rights_CLC
www.instagram.com/yourfinancialrights
www.facebook.com/yourfinancialrights
If you have financial problems call the Credit & Debt Hotline 1800 007 007 or ICAN on 1300 369 878.