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ASIC has cracked down on misleading advertising by debt resolution firms, which should serve as a warning to borrowers to be diligent when looking to engage with one.
ASIC has taken action again three debt management firms as part of a crackdown on misleading advertising.
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Firstly, Capital Debt Solutions Australia Pty Ltd falsely claimed it was 'trusted and recommended by more than 6,000 Australians' and that their debt agreements were 'Government Approved'.
Capital Debt Solutions has now removed these claims and has paid an infringement notice of $10,800.
Debt Assist Aust Pty Ltd also falsely claimed that their debt agreements were 'Government Approved', which have now been removed.
Finally Bankruptcy Experts Pty Ltd had testimonials on their websites from customers that were unable to be substantiated. These have now been removed.
According to ASIC, while debt agreements and debt administrators are regulated, this 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.”
