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Brokers have been urged to familiarise themselves with credit legislation so they can help clients repair their credit files for free.
Australian Retail Credit Association chief executive Damian Paull said brokers needed to understand what could and couldn’t be done under the new credit legislation.
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Mr Paull told The Adviser in a video interview that consumers are entitled to one free credit report every 12 months and can also demand corrections for free.
“I think the challenge for brokers will be to help their client go through their credit report, identify what they believe to be inaccuracies, and then contact either the credit provider or the credit reporting body that has provided the report and seek to have that information corrected,” he said.
Those parties then have 30 days to reply to correction request, Mr Paull said.
Consumers who receive negative replies can then take their case to an ombudsman or an external dispute resolution scheme, free of charge, he added.
Mr Paull also advised brokers that their clients can remove only incorrect information from credit reports, not legitimate defaults.
“The best way a consumer can fix that credit report is to maintain good behaviour in terms of repaying their payments,” he told The Adviser.
“The other thing that brokers should understand about credit repair is that it’s an unregulated industry, which means that there is a range of different services and different prices and different fee structures that consumers are being asked to pay, and often those fees that are being charged are for things that consumers could do themselves.”
[Related: Most borrowers unaware of new credit rules]
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