Deregistration of Sam Pos Pty Ltd trading as DebtCutter

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Background

In March 2023, the Inspector-General in Bankruptcy cancelled the debt agreement registration of Sam Pos Pty Ltd (trading as DebtCutter) for failing to meet the obligations of the Bankruptcy Act 1966 (Bankruptcy Act) or the fit and proper person requirements.

Following the deregistration, existing agreements that were administered by Sam Pos Pty Ltd were transferred to the Official Trustee in Bankruptcy to administer. Both the Inspector-General in Bankruptcy and the Official Trustee are part of the Australian Financial Security Authority (AFSA).

Further investigations by AFSA identified that $1.1 million held in trust by Sam Pos Pty Ltd was transferred to an unrelated business. AFSA is taking legal, investigative and forensic accounting action to pursue potential recovery of the allegedly misappropriated (taken) funds and support affected debtors and creditors.

Frequently asked questions

Why was Sam Pos deregistered?

AFSA received a tip-off highlighting allegations of financial mismanagement within the company. An inspection by AFSA identified issues with record management and risk controls.

This resulted in a decision by the Inspector-General in Bankruptcy to deregister the company on the grounds that it did not meet its obligations under the Bankruptcy Act or the fit and proper person requirements. For further information please refer to our public statements.

What does this mean for debtors and creditors?

Following the deregistration, existing agreements that were administered by Sam Pos (trading as DebtCutter) were transferred to the Official Trustee, which sits within AFSA.

This means all debt agreements are now being administered by the Official Trustee. Debtors and creditors have been contacted by AFSA to inform them of the transfer of debt agreements.

Will AFSA remain as administrator from now on?

Yes, AFSA (via the Official Trustee) will continue to manage all debt agreements transferred from Sam Pos.

As a debtor do I need to inform my creditors?

No. AFSA has contacted your creditors to explain the circumstances around the transfer.

What action is AFSA taking in response to the deregistration of Sam Pos?

We appreciate that this is a difficult and uncertain time for affected people and wish to assure you that resolution of this matter remains a top priority for AFSA.

Following the deregistration AFSA has:

  • Taken over the administration of all debt agreements and undertaken a comprehensive review of impacted administrations.
  • Launched an investigation, including seeking a return of the allegedly misappropriated (taken) funds.
  • Worked to identify options for the best way forward to support debtors and creditors.
  • Assigned a dedicated case manager to manage debtor and creditor enquiries associated with each individual debt agreement.
When can we expect a resolution to this matter?

This is a complex and challenging matter that has required extensive legal, investigative and forensic accounting work.

AFSA is seeking guidance from the Federal Court to identify the best way to progress debt agreements going forward. Given the complexity of the matter this may require a number of Federal Court appearances over the coming months.

We expect to be able to provide further advice on how your debt agreement will be progressed following the outcomes of the Federal Court proceedings. Updates will be provided on this web page as the matter progresses through the court system.

I’ve paid off my debt agreement. When will I get my Notice of Completion?

Under the law, a Notice of Completion can only be provided once both the debtor has met their obligations and creditors have been paid. The missing $1.1 million allegedly misappropriated (taken) by Sam Pos Pty Ltd means there is a shortfall in the pool of money available to pay creditors what they are due.

AFSA is seeking guidance from the Federal Court on the best way forward to address this. Given the complexity of the matter this may require a number of Federal Court appearances over the coming months.

We expect to be able to provide further advice on the distribution of all Notices of Completion after the Federal Court proceedings are completed. Updates will be provided on this web page as the matter progresses through the court system.

We thank you for your ongoing patience and wish to assure you that resolution of this matter remains a top priority for us.

If you require further information please contact your AFSA case manager. If you are unsure of who your case manager is or how to contact them please email OTDAtransfers@afsa.gov.au or call 1300 364 785.

When will the debt agreement be removed from my credit reports?

This matter has raised a number of complex legal issues for which AFSA is seeking guidance from the Federal Court. One of those matters involves the distribution of Notices of Completion. Please see FAQ I’ve paid off my debt agreement. When will I get my Notice of Completion?

Not issuing Notices of Completion has an impact on credit reporting.

We expect to be able to provide further advice on credit reporting shortly. Updates will be provided on this web page as the matter progresses through the court system.

If you require further information please contact your AFSA case manager. If you are unsure of who your case manager is or how to contact them please email OTDAtransfers@afsa.gov.au or call 1300 364 785.

When can creditors expect to start receiving dividends?

This is a complex and challenging matter that has required extensive legal, investigative and forensic accounting work.

AFSA is seeking guidance from the Federal Court to identify the best way to progress debt agreements for the benefit of both debtors and creditors.

We expect to be able to provide further advice on dividend payments following the outcomes of the Federal Court proceedings. Updates will be provided on this web page as the matter progresses through the court system.

We appreciate that this is a difficult and uncertain time and thank you for your ongoing patience.

If you require further information please contact your AFSA case manager. If you are unsure of who your case manager is or how to contact them please email OTDAtransfers@afsa.gov.au or call 1300 364 785.

Why does this matter have to go through the Federal Court?

The misappropriation (taking) of over $1.1 million of money paid by debtors under their debt agreements means there is a shortfall in the pool of money available to pay creditors what they are due. This has affected debt agreements because creditors have not been paid all of the dividends (money owed) as per the agreements.

In order to resolve the issue, the Official Trustee (part of AFSA) is seeking direction (guidance) from the Federal Court. The guidance will be essential to help identify the fairest way to resolve this matter for both debtors and creditors.

Updates will be provided on this web page as the matter progresses through the court system.

What happened at the 10 April 2024 Federal Court hearing?

The purpose of the 10 April hearing was to seek judicial advice (guidance) to help identify the fairest way forward for both debtors and creditors following the misappropriation (taking) by Sam Pos of over $1.1 million paid by debtors under their debt agreements. 

It is anticipated that the Judge will hand down his decision (guidance) in the coming weeks.

An update will be provided to affected debtors and creditors once the decision (guidance) has been handed down and considered by the Official Trustee. Updates will also be provided on this web page as the matter progresses.

Why is it taking so long to resolve this matter?

This is a complex and challenging matter that has required extensive legal, investigative and forensic accounting work to:

  • identify how much money was misappropriated (taken)
  • explore ways to try to recover the misappropriated (taken) money
  • identify the best way forward for the benefit of both debtors and creditors.

Significant progress has been made, however there are still complex legal questions that need resolving. The Official Trustee (part of AFSA) has applied to the Federal Court for direction (guidance). The guidance will be essential to help identify the fairest way to resolve this matter for both debtors and creditors.

A court hearing was held on Wednesday 10 April 2024 (please refer to FAQ What happened at the 10 April 2024 Federal Court hearing?). It is anticipated that the Judge will hand down his decision (guidance) in the coming weeks.

An update will be provided to affected debtors and creditors when the decision (guidance) has been handed down and considered by the Official Trustee. Updates will be provided on this web page as the matter progresses through the court system.

We appreciate that this is a difficult and uncertain time and thank you for your ongoing patience. If you require further information, please contact your AFSA case manager. If you are unsure of who your case manager is or how to contact them, please email OTDAtransfers@afsa.gov.au or call 1300 364 785.

My question isn’t here. Where can I go for help?

Please contact your case manager. If you are uncertain who your case manager is, call 1300 364 785 or email OTDAtransfers@afsa.gov.au.

Please also see the Further Information section below where there are links to relevant support services, should you wish to seek any additional advice.

Further information

Enquiries

T: 1300 364 785

E: OTDAtransfers@afsa.gov.au

Need a translator?

If you have difficulty speaking or understanding English, contact us through the Translating and Interpreting Service (TIS) - www.tisnational.gov.au 131 450 and ask for AFSA on 1300 364 785.

Support services

Information and links to a range of support services, including financial counselling, Indigenous assistance, free legal advice, mental health and wellbeing can be found on our Where to find help managing debts page.

Commonwealth Ombudsman

The Commonwealth Ombudsman responds to complaints about the administrative actions of Government agencies, including AFSA. If you have concerns with how your debt agreement has been handled by AFSA and are not satisfied with our response to your complaint, you can contact the Commonwealth Ombudsman for assistance.

Further information is available at www.ombudsman.gov.au or by telephone on 1300 362 072.

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