ASIC will launch a review into the debt management and credit repair sector, as part of its continued focus on protecting consumers, particularly those experiencing financial hardship.
ASIC Commissioner Alan Kirkland said: 'We are concerned some licensees may be failing to engage in credit activities efficiently, honestly and fairly, leaving financially vulnerable consumers worse-off as a result.
ASIC's surveillance will review how the sector, comprised of around 100 licensees, complies with the law. It will seek to understand the varying debt management and credit repair business models in operation.
ASIC will review instances where debt management firms may have failed consumers by not meeting the terms of their debt management agreement, charged high fees for no or limited services, or not communicated adequately with clients.
Commissioner Kirkland said: 'We have heard numerous accounts of debt management firms making promises to vulnerable consumers that may not have been kept.
'In one instance, we heard that a woman could not get an answer on why her debt management firm was not making any payments to her creditors. After numerous calls to the firm, she was told to enter into bankruptcy with no further explanation.
'Another man was at risk of having his car repossessed after his debt management firm failed to respond to default notices from creditors. When he cancelled his contract and asked for a partial refund from the debt management firm, they said there was a no-refund policy.
'Stories like these are disturbing and if we detect unfair and unlawful practices, we will take enforcement action to protect consumers.'
ASIC intends to publish insights from the review in a public report in 2026.
The project aligns with ASIC's key enforcement priorities and aims to strengthen practices across the sector, while addressing the potential for consumer harm.
Background
A licensing regime was introduced in 2021 for debt management and credit repair firms to protect consumers from predatory practices.
Entities operating under this regime are required to hold a credit licence and comply with provisions of the National Consumer Credit Protection Act 2009, as well as be a member of the Australian Financial Complaints Authority (AFCA).
ASIC commenced proceedings in August 2023 in the Federal Court against Bakken Holdings Pty Ltd (Bakken), an operator of the debt management business Solve My Debt Now, following concerns of substantial consumer harm (23-212MR). In June 2025, ASIC refused Bakken's application for a credit licence, meaning Bakken cannot provide debt management services (25-101MR).
ASIC also issued two infringement notices on debt management company Chapter Two Holdings Pty Ltd in April 2025 for alleged misleading statements made on its website regarding debt management outcomes. Chapter Two's website included statements that the company had wiped $80 million in debt and saved consumers $30 million in interest (25-061 MR).
For consumers
- Any complaints about potential misconduct should first be made with your debt management firm and if it is not resolved can be taken up with AFCA.
- Consumers who are looking for debt help can find a range of free resources about managing debt on ASIC's Moneysmart website.
- Free financial counselling is available via the National Debt Helpline on 1800 007 007.
- If financial challenges are impacting your mental health and wellbeing, help is available through Beyond Blue.
