The Australian Financial and Security Authority (AFSA) has warned the public of potential dodgy insolvency advisors targeting individuals who are in financial distress. AFSA has launched a campaign to raise awareness of these unregulated and unregistered advisors who exploit vulnerable people, especially in times like this.
“People who find themselves dealing with large debts for the first time as a result of COVID-19 may be tempted to turn to advisors who say they have a quick fix and later find out what they’ve done is illegal,” AFSA’s Deputy Chief Executive Gavin McCosker explained.
“It’s not always easy to spot a dodgy advisor, but if someone offers a solution to your financial problems that sounds too good to be true, it probably is,” he added.
AFSA has provided some guidance on what to look out for, and to avoid insolvency advisors that:
- Charge a large up-front fee, often with little or no detail as to what the fee covers;
- Promise to get you out of bankruptcy within a few months with a payment;
- Recommend that you include false, exaggerated or fake debts in your bankruptcy application;
- Offer to organise your affairs so that your assets are protected under bankruptcy; and
- Advise you bankruptcy or debt agreements will not affect your credit rating.
AFSA is aware of the prevalence of dodgy advisors in the industry and is actively taking steps to investigate and take action against such advisors.
“When we discover or are notified about a dodgy advisor, we investigate and take action. Each year we inspect hundreds of personal insolvency administrations, and attend creditors’ meetings if dodgy activity is suspected,” said Mr McCosker.
What should you do to avoid dodgy advisors?
You should always obtain advice from qualified professionals. The best person to provide advice on bankruptcy including its impacts and options available to avoid it, is a registered bankruptcy Trustee. And this is where we can help as our firm consists of registered bankruptcy Trustees, Chartered Accountants and members of the Australian, Restructuring, Insolvency and Turnaround Association.
Contact Us
Please contact us if you wish to discuss the contents of this article, or your financial circumstances. We are registered bankruptcy Trustees and are able to discuss all options that are available to you and assist you to avoid bankruptcy, if that is a feasible option. So, please contact either our Brisbane or Gold Coast offices for an initial obligation-free consultation.
