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Credit Repair Companies and Removing Defaults

Thursday, March 29, 2018 - Posted by Michael McCulloch

Recently we have again seen an influx of requests by credit repair companies requesting that payment defaults or Judgments be removed from consumer credit files.

Typically these requests are received after a debt has been paid in full or settled with consumers being told by credit repair companies that they can remove a default. Such a request usually involves the credit repair company forwarding a default removal request and a signed privacy consent form with reference to Section 2.23 of the Credit Reporting Code of Conduct. Of interest in receiving these requests is a demand that the request be complied with within 10 business days. This is in fact incorrect in that the credit repair companies are making reference to the repealed Part IIIA of the CRCC:

That aside the formal stance from Equifax regarding the removal of defaults can be found on their page Can I Have Information Removed from My Credit File?

Generally speaking a default will only be removed if:

  • the entire listing is incorrect;
  • the debt is Statute Barred;
  • the listing was a result of unavoidable circumstances and a new arrangement entered into with the Credit Provider

It is our recommendation that should such a request be received that:

  • you conduct a thorough review of your Code issued Notices to ensure strict compliance including the timing of the issue of each Notice;
  • copies of any such Notices be forwarded to the credit repair company;
  • it is clarified that the listing will not be removed; and
  • that correspondence received from them quoting repealed Part IIIA of the CRCC could be interpreted as misleading and deceptive conduct and future references to this section may be reported to ASIC.

If you believe that you may require an opinion regarding the legality of any such request you can contact Collection Law Partners by phone or email to obtain written advice.

Image Source: Office of the Australian Information Commissioner - Privacy Business Resource 3: Credit Reporting - What Has Changed

Disclaimer: The information contained in this article does not constitute legal advice and should not be used as such. You should obtain your own independent legal advice before acting or relying on its content.

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