Caution Exercised In Engaging Services Of Credit Repair Organizations

Credit repair or credit restoration is a recent phenomenon emerging in Australia some five years ago, gathering significant momentum in the last two years. During this period a number of organizations have emerged offering their services of repairing credit files.

Typically, credit repair organizations charge upfront fees irrespective of assessing the probability of a correction or alteration being achieved. It should be noted that there are reputable credit repair organizations operating in Australia. This article is aimed at the companies that are less than reputable.

Prior to engaging a credit repair company, the following questions should be asked.

  • Is it the sought of matter I can handle myself?
  • What fees are charged upfront and are they sufficiently disclosed at the beginning of the retainer?
  • Has the company assessed my matter and determined the prospects of success, prior to charging a fee?
  • Does the company conduct their own credit report, and does such report contain the credit repair company’s footprint, therefore arousing the suspicion of a prospective lender? 
  • Does the company discuss all options available to you?
  • Does the company have a sufficient grasp of the legislation surrounding credit reporting in Australia?

Does the company have professional indemnity insurance?

  • If the answer to any of the above is no! You should immediately, re think the engagement of the company. Credit repair in Australia is governed by the Privacy Act 1988 as Amended and supplemented by the Credit Reporting Code of Conduct. The legislation is there to assist consumers not corporations, although credit reporting agencies advance the same courtesy to companies.
  • It must be noted not all listings on credit files are able to be removed. Only contestable listings which are inaccurate or incorrect are legislated for and as such are able to be removed. A credit repair organization which promises to deliver miracles and charges an upfront fee should be viewed with skepticism.
  • With the changes to Australian credit reporting on the horizon, the importance of maintain the integrity of your credit file has never been greater.

An organization which willfully attempts to remove a default or judgment knowing that the same is lawfully listed is acting fraudulently.

Caution should be exercised by consumers who have several affectations by way of defaults and Judgments on their file, as the removal of one or two affectations will not necessary improve their position as to credit worthiness. The net result is money has been spent without advancing the clients position.

In choosing the right professional to work with you, consideration should be given to their level of expertise, the fees they charge, together with their commitment to ethical practice.

Prior to engaging the services of a credit repair company one should research the company they seek to employ and if possible speak to your accountant, financial planner or finance broker who may be able to refer you to a reputable organization. Even in such referral one should establish if your referrer is being paid a referral fee, as such schemes rarely leads to your best interest being persued.

This article is written as a guide only and should not be relied on as legal advice. Joseph Trimarchi & Associates Solicitors adopt a no win no pay policy, which guarantees we only get paid once the job is done. There is no better guarantee than this.

Feel free to call us to discuss how we may be of assistance.

Joseph Trimarchi Solicitor
March 2013