There have been some recent developments with the Credit Ombudsman and the credit repair industry. The Credit Ombudsman has recently indicated they may consider not accepting complaints from credit repair companies. This announcement although not yet policy has been met with significant resistance from the credit repair industry and even other professional bodies. It would certainly seem a significant and rather extreme step given the role of the Credit Ombudsman is one of an impartial party that is there to help people rectify disputes, to cut off a whole market sector seems, in my opinion, is unwarranted.
To understand why the Credit Ombudsman has seen fit to make this announcement we need to explore the reason the Ombudsman feels so strongly towards the credit repair industry. As the director of Clean Credit Pty Ltd, I am the first to admit there are other credit repair companies that are not acting in a fair and ethical manner. In my opinion, some within the industry are giving misleading information and making claims they are in no position to back up. These clams include giving guarantees to people when in reality no such guarantee can be given.
It would seem the focus of some of these companies is to extract as much money from people as possible rather than focusing on helping them. Passing the matter to the Ombudsman benefits these companies as they can claim to be doing something when in reality they are doing very little.
With so many credit repair companies referring often groundless complaints to the Ombudsman and expecting them to do all the work it’s no wonder they are unhappy with the industry.
I can state with authority that when conducted correctly credit repair does not operate this way.
Complaints should be taken up directly with the credit provider and the Ombudsman should only be contacted when adequate grounds to remove the offending credit listing have been found and yet the listing party still refuses to delete the item. In other words, the Ombudsman should be a last resort for a credit repair company and not the first port of call.
I can count on one hand how many times Clean Credit Pty Ltd has involved the Ombudsman when trying to rectify a situation with a client’s credit file.
Perhaps a more measured approach by the Credit Ombudsman would be rather than blanket policy against the entire credit repair industry they could assess what companies are abusing their services and focus on them. I feel to cut off an entire market sector due to the conduct of a few is not appropriate and frankly not necessary.
If the Credit Ombudsman was to ban an entire industry one wonders where this will end. Does this mean if the Ombudsman receives a large number of complaints from saying the legal or accounting industry would their answer be to also ban them, clearly not?
We know that the issue is the credit repair industry itself as unfortunately due to the actions of a few the industry has been tarnished. This is a shame as when conducted correctly credit repair services offer a valuable service to people, it would be a great shame to see this service disappear due to an unfounded belief that all credit repair companies are dishonest as I can assure you this is not the case.
John Dickinson
Clean Credit Pty Ltd