Addressing harmful conduct
AFSA supports a strong credit system for the Australian community by ensuring people and businesses engage with Australia’s personal insolvency and personal property securities systems easily, effectively and with assurance.
Our annual Regulatory Action Statement (RAS) explains where we will focus our regulatory efforts in 2026-2027.
We will address these harms using the full range of regulatory tools, including education, compliance activities, investigations and enforcement action. We do this in line with our Compliance and Enforcement Policy 2025–30.
Focus areas
Manipulation of personal insolvency proposals
The harm
- Use of personal insolvency proposals to hide wealth resulting in unfair outcomes for creditors and undermining confidence in the process.
Our focus – actively monitoring and intervening in
- Inadequate investigations by practitioners into a debtor’s financial position.
- Reporting to creditors that is unclear, incomplete or inaccurate.
- Inappropriate or non-compliant conduct during creditor meetings.
Outcomes
- Ensuring practitioners undertake thorough, evidence-based investigations.
- Improving the quality, accuracy, and transparency of information provided to creditors so they can make informed decisions, including voting.
- Ensuring all parties engage in creditor meetings ethically, fully and in good faith.
Harmful debt agreements
The harm
- Practices that lead to unaffordable debt agreements, poor or incomplete advice, and uninformed decision making.
Our focus – actively monitoring and intervening in
- Debt agreements that are unaffordable, contain unrealistic or incomplete budgets and are not sustainable.
- Insufficient and poor quality of advice to debtors including about the consequences of debt agreements, available alternatives (particularly when there are more suitable options) and availability of free financial advice.
- Excessive or poorly structured Registered Debt Agreement Administrator (RDAA) fees, including total costs over the life of the agreement.
Key outcomes
- Ensuring debt agreements are affordable, sustainable, and based on accurate financial assessments.
- Improving the quality, transparency and completeness of information and advice provided to debtors.
- Supporting informed decision making by debtors and the Official Receiver.
- Promoting fair and appropriate fee structures that align with the outcomes delivered.
Strengthening the integrity of the Personal Property Securities Register (PPSR)
The harm
- Expired, invalid or improper PPSR registrations that restrict access to credit and/or cause harm to individuals and businesses (i.e. misuse).
Our focus – actively monitoring and addressing
- Failure to remove invalid registrations.
- Misuse of the PPSR through registrations that are disingenuous, fraudulent, frivolous, vexatious, offensive, or against the public interest or poorly administered.
Key outcomes
- Ensuring the lawful, accurate and proper use of the PPSR.
- Ensuring registrations reflect genuine and enforceable security interests.
- Reducing unnecessary barriers to credit and commercial activity.
- Strengthening confidence in the PPSR as a trusted public register.
Enduring Priorities
Some forms of conduct pose persistent and serious harm to the integrity of the personal insolvency and personal property security systems. These enduring harms disadvantage debtors and creditors and erode trust and confidence in the credit system. They remain an ongoing focus for AFSA as we work to ensure fair and balanced outcomes for everyone using our systems.
- Misappropriation of trust funds for personal gain.
- Inappropriate fee practices and unjustified prolonged estate administration.
- Concealment or disposing of assets with the intent to defraud creditors.
RAS 2025-26 Outcomes Summary
1. Manipulating personal insolvency proposals and creditor meetings to protect wealth
Stronger oversight of personal insolvency proposals:
- AFSA identified systemic misuse of personal insolvency proposals.
- Of 278 proposals reviewed, 17% or 48 were escalated, with 10 requiring statutory intervention and a number under consideration for disciplinary action.
- Show cause notices have been issued to a number of registered trustees regarding concerns about potential non-compliance with statutory and professional obligations.
- In 24 proposals – half of those escalated for review – trustees were instructed to issue a supplementary report, so creditors could make an informed decision.
Enforcement key outcome
AFSA’s prompt and decisive intervention in Jon Adgemis’ personal insolvency proposal demonstrated the importance of robust regulatory oversight.
Mr Adgemis proposed settling approximately $1.8 billion in debts with a $3 million payment, returning just 0.15 cents in the dollar to creditors. AFSA attended creditor meetings to raise concerns about the proposal and acted to ensure the controlling trustees adhered to their statutory duties and standards.
The Federal Court’s decision to declare Mr Adgemis bankrupt reinforces the integrity of the personal insolvency system and AFSA’s role in protecting creditor interests.
2. Unauthorised access to trust funds for personal gain
- AFSA audited the trust accounts of 6 registered trustees and 5 Registered Debt Agreement Administrators (RDAAs), to verify the accuracy of account reconciliations.
A 5% sample of registered trustees was audited, with 42% of the administrations reviewed requiring escalation for further examination.
Out of those:
- In 8 matters, the information disclosed in the trustee’s end-of-year reports to AFSA didn’t match their underlying financial records
- In one case, a closing balance was transferred to an unidentified bank account without a clear justification.
Audit of 20% of active RDAAs:
Out of those:
- In all cases, further information was required to determine if their accounting records presented a complete account of the reconciliations undertaken.
- Deficiencies related to the quality of source records used for reconciliations and the timeliness of addressing unreconciled balances.
Enforcement key outcome
The Inspector-General in Bankruptcy initiated Federal Court proceedings against former registered trustee Paul Leroy and registered trustee Gavin King, sending a strong regulatory signal to practitioners and personal insolvency firms about their legal obligations to act in the best interests of creditors.
3. Harmful insolvency advice and debt agreements
Better protection for vulnerable Australians:
- AFSA identified risks in the debt agreement system, reviewing over 6,000 proposals with 13% or almost 800 requiring closer scrutiny.
- One RDAA was referred to ASIC for false and misleading advertising.
- Enhanced regulatory collaboration with ARITA, ASIC, and major creditors.
- Strengthened consumer engagement with vulnerable communities and small business owners.
Enforcement key outcome
The County Court of Victoria sentenced John Michael Voitin to 3 years’ imprisonment, with a minimum non‑parole period of one year, for perverting the course of justice and obtaining a financial advantage.
The outcome followed a joint AFSA and Australian Federal Police investigation into an elaborate scam by the Melbourne‑based lawyer targeting business owners who were in financial distress or facing bankruptcy.
4. Removing expired registrations on the Personal Property Securities Register (PPSR)
- Over 200,000 outdated registrations have been removed, a significant increase on the previous year.
- This large-scale clean-up, delivered in partnership with over 120 secured parties, represents more than 80 per cent of indefinite registrations.
- This campaign has improved data accuracy - reducing barriers for consumers and businesses and enabling faster, more efficient transactions.
Key focus: Registrations without end dates are not automatically removed from the PPSR upon expiry, creating a significant risk that these registrations will remain on the register long after the underlying security interests have ceased.
Compliance key outcome
Inactive or outdated registrations prevent consumers from accessing credit and delay business transactions. AFSA has engaged with credit providers to clean up the register, with strong cooperation. One major motor vehicle financier proactively identified and discharged 39,000 outdated registrations, while a major financial institution identified gaps in its internal oversight framework and initiated broader internal clean‑up activities, resulting in the removal of 26,000 registrations, with more expected.