AFSA Regulatory Action Statement 2025-26

Addressing harmful conduct

AFSA supports a strong credit system for the Australian community. We ensure confidence in Australia's personal insolvency and personal property securities systems and manage proceeds of crime.

Our annual Regulatory Action Statement (RAS) outlines how we will address misuse of Australia's credit system, an enduring priority for AFSA. In 2025–26, we will focus our resources on addressing conduct resulting in the areas of significant harm listed below.

We will achieve this through the full use of our regulatory toolkit of education, compliance, investigation and enforcement, and application of the Compliance and Enforcement Policy 2025–30.

Focus areas

Manipulating personal insolvency proposals and creditor meetings to protect wealth

Practices manipulating the outcomes of personal insolvency proposals and creditor meetings to avoid bankruptcy, defeat creditors and protect wealth.

Unauthorised access to trust funds for personal gain

Mismanagement of trust funds ranging from unauthorised payment of fees through to reckless, fraudulent or deliberate misappropriation of funds for personal gain.

Harmful insolvency advice and debt agreements

Advice encouraging debtors to:

• not comply with obligations under the Bankruptcy Act
• enter debt agreements that cause harm.

Not removing registrations on the Personal Property Securities Register (PPSR)

Not removing registrations from the PPSR after a security interest expires resulting in negative consequences for individuals, businesses and the credit system.

RAS 2024–25 outcomes summary

Untrustworthy advice

• We stepped up our engagement with industry, strengthening our understanding of key harms. Meetings and workshops were held with regulators and industry members to deal with harmful adviser behaviour.
• An Untrustworthy Advice Education Plan for 2025–26 was created to help inform consumers and insolvency practitioners of the harm.
• We made it easier for people to find trusted pre-insolvency information by improving our website, and through an online marketing strategy ensuring our content is readily available.

Remuneration and fees

• Following the Inspector-General in Bankruptcy's review of trustees' fees, trustees were counselled and reminded to follow the law and good practice.
• The review found problems with overcharging tasks, undertaking unnecessary work, the same work done by more than one person, and lack of trustee oversight and review of fees being charged.

Debt agreements and other Personal Insolvency Agreements (PIAs)

• The Official Receiver sharpened its focus on debt agreements assessing proposals to ensure they are affordable.
• In the Hartnett case we took proportionate and purposeful enforcement action to set aside a PIA that was not in the best interests of creditors.
• We engaged with practitioners on debt agreements and PIAs and intervened in creditor meetings when necessary. This included providing guidance and issuing warnings in appropriate cases and running webinars for trustees about conduct of concern.

Personal Property Securities Register (PPSR)

• The Registrar of Personal Property Securities improved their ability to detect privacy issues on the PPSR and helped users understand their responsibilities.
• Updates were made to ensure users acknowledge and understand when they can use and access the PPSR and that they have an authorised purpose to conduct a search.
• The Registrar delivered education and engagement activities with stakeholders focused on the legislative requirements for registrants on the PPSR, including removing registrations in a timely manner and highlighting the importance of keeping the register up to date to support the free flow of credit.

Vulnerability

• We equipped staff with training and offered guidance on how to support individuals experiencing financial vulnerability.
• An easy-to-read illustrated guide was developed to help financial counsellors explain the bankruptcy process. AFSA joined several events focused on multicultural communities and financial counselling.

Enforcement and offences

• In 2024–25, 7 people were taken to court for 18 offences, including offences for fraudulent conduct and false statements. We issued 3 infringement notices and 27 official cautions.
• 17 cases were sent to the Commonwealth Director of Public Prosecutions, with 63 investigations ongoing and 26 matters resolved without going to court. Serious cases have led to jail sentences.