ASIC crackdown on debt management misleading advertising

ASIC fines debt resolution firm, orders others to remove misleading information.

Debt management firms in the gun

The Australian Securities and Investments Commission (ASIC) has started a crackdown on misleading advertising by debt management firms, fining one and ordering others to remove false claims.

The firms offer to assist customers struggling to pay their debts by providing a range of services including bankruptcy advice, informal debt agreements, debt consolidation and formal debt agreements.

Capital Debt Solutions was fined $10,800 for claiming on its website that it was 'trusted and recommended by more than 6000 Australians', when there was no basis for the claim. ASIC also ordered that the false claim be removed, and to take down a claim that its debt agreements were ‘Government Approved’.

Debt Assist Aust, another debt management firm, was also forced to take down a claim that its agreements were ‘Government Approved’, while the company Bankruptcy Experts had to remove testimonials from its website from customers that were not able to be substantiated.

ASIC explained that, while debt administrators are regulated, it does not mean they are ‘approved’ by the Government.

“Recommendations and statements, like 'Government Approved' can have a strong influence when vulnerable consumers in financial hardship are seeking help with their debts,” ASIC Deputy Chair Peter Kell said.

“Firms must ensure their marketing materials and promotional statements are based on fact.”

Under the ASIC Act, a person involved in the supply or promotion of financial services must not make false or misleading representations in relation to the service having any sponsorship or approval characteristics.

Have you seen any misleading advertising regarding financial services? What action have you taken?

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    COMMENTS

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    Nerk
    11th May 2017
    11:37am
    Has any one noticed the KFC adds,,,pieces of chicken overflowing in their take away boxes and bucket, yet when you buy it, it's only half filled, bit of a con...
    KSS
    11th May 2017
    12:56pm
    That goes for any packaged/pre-cooked and boxed food.
    MICK
    11th May 2017
    5:12pm
    Serious? How about dishonest advertising all over the place. 'Woolworths the Fresh Food People'....selling fruit and vegetables which cam be a year old? Currently this company is advertising mandarines@$2 per kg and by the look of them I'd be willing to bet they are a year or more old. Also, bought some bread rolls today which were cool and damp...straight out of the refrigerator?
    In all fairness Woolworths is not alone and business is allowed to lie lie lie. I even contacted the ACCC a few years ago about a business running blatantly deceitful advertising which was likely a scam. The result was NO ACTION and a suggestion that I should take the matter up with Fair Trading when I had not even purchased. But then this is what you get back from the ACCC...a letter but NO ACTION. That is common knowledge from comments I have read.
    Let's have $million fines for blatant intentional deceit by business accompanied by a register naming the culprits for all to be able to access and see who the crooks are. You won't get that because these business have 'rights'.......but you and I have none.
    Pass the Ductape
    12th May 2017
    9:14am
    The fresh food people have absolutely no interest in consumer satisfaction Mick. They're only interested in maximising the bottom line for their shareholders. Happens everywhere.... That's one of the reasons I don't buy anything these days unless I absolutely can't do without it. I'm totally sick and tired of having to pay good money for faulty goods, then having to return them the following week to exchange the goods for the same crap - or get your money back - or purchase crook food which looks good all when packaged up, but once unpacked, the bad stuff is hidden in the middle! Prime example is meat from the butcher where large amount of fat is cleverly hidden inside the roast but you pay an exorbitant amount for it anyway. No wonder people would rather leave their money in a bank. The advertising game is an important part of the rip-off and ACCC has no intention of doing anything about the practice of ripping off the consumer.
    Lookfar
    12th May 2017
    3:23pm
    'The Fresh food people', - yes, fresh from the cool room, - that is not fresh, a genuine definition should be applied by ACCC, not a fake one.

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