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In a previous post, the Credit Ombudsmen Service ("COSL") was proposing to exclude credit repair style companies from accessing COSL's free services, as authorised representatives on behalf of debtors.
COSL have released a revised consultation that instead targets the conduct of a representative instead of focusing on the fact the representative charges a fee. There was also an issue that complaints concerning privacy should be dealt with by EDR before being referred to the Office of the Australian Information Commissioner.
COSL have set out a number of circumstances in a guideline where they will deal directly with the consumer instead of the representative where after due warning, the representative does any 2 actions against the guideline.
The guidelines largely follow the ACCC and ASIC Guide to debt collection and include; not disclosing the availability of the free service and EDR provide, obstructing the EDR process, making unreasonable decisions, not informing the consumer of all their options, asking EDR to investigate matters the representative should already know, misleading and deceiving, acting contrary to the consumers best interest.
Feedback we are receiving from our clients with respect to paid representatives who charge a fee, is that these companies are advising debtors to make an EDR complaint that has no basis, and then use this window of opportunity where no action can be taken against them to wither enter into a Part IX debt agreement or proceed to full bankruptcy. This then generates an unnecessary charge from the EDR scheme to the creditor.