Status update
- Update 4 November 2024.
- The Federal Court of Australia has recently indicated that judgment (the decision) on the Official Trustee’s application for directions (heard on 10 April 2024) may be delivered later in November 2024.
- When the decision is handed down and considered, the Official Trustee will contact impacted debtors and creditors with more information and next steps.
- This decision will be an important step towards a resolution but, depending on the decision, may not be the final step.
- While we wait for a decision, work continues to:
- explore ways to try to recover the misappropriated (taken) money
- map inconsistencies in data to identify options to help resolve this matter in a way that is fairest for everyone
- explore if debt agreements can be varied and completed
- plan for various possible outcomes from the Federal Court decision so we are well placed to respond when the decision is handed down.
- We appreciate this is a difficult and uncertain time. Support services are available .
- If you require more information please contact your AFSA case manager. If you are unsure who your case manager is or how to contact them please email OTDAtransfers@afsa.gov.au or call 1300 364 785.
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).
AFSA is taking legal, investigative and forensic accounting action to help resolve this matter and support affected debtors and creditors.
Investigations identified $1.1 million held in trust by Sam Pos has been misappropriated (taken) and also uncovered significant issues with Sam Pos recordkeeping and processes.
On 10 April 2024 the Official Trustee sought direction (guidance) from the Federal Court in a hearing to help identify the fairest way to resolve this matter for debtors and creditors.
In parallel work continues to:
- explore ways to try to recover the misappropriated (taken) money
- map inconsistencies in data to identify options to help resolve this matter in a way that is fairest for everyone, including possible notation on the National Personal Insolvency Index NPII*
- explore if debt agreements can be varied and brought to an end.
As of 19 August 2024 the Official Trustee is awaiting a decision from the Federal Court.
Please refer FAQs below for more detail.
*NB: This is pending the handing down of the decision from the 10 April 2024 Federal Court hearing.
Frequently asked questions
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.
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.
Yes, AFSA (via the Official Trustee) will continue to manage all debt agreements transferred from Sam Pos.
No. AFSA has contacted your creditors to explain the circumstances around the transfer.
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.
AFSA is seeking guidance from the Federal Court to identify the best way to progress debt agreements going forward.
We will provide more information on how debt agreements will be progressed and next steps when the Court’s decision has been handed down and considered by the Official Trustee.
Due to the complexity of the legal issues, the need for detailed forensic accounting work and the impact of the misappropriation on the funds available for distribution to creditors, further Federal Court appearances may be required.
Updates will be provided on this web page as the matter progresses.
Under the law, a Notice of Completion can only be provided once both the debtor has met their obligations and the debt administrator has paid dividends to creditors.
The missing $1.1 million misappropriated (taken) by Sam Pos means there is a shortfall in the pool of money available to pay creditors what they are due.
The Official Trustee is seeking guidance from the Federal Court to address this. We will provide further information following the Federal Court’s decision and as next steps are determined.
We appreciate this is a difficult and uncertain time and assure you resolving this matter is a high priority.
If you require further information please contact your AFSA case manager. If you are unsure who your case manager is or how to contact them please email OTDAtransfers@afsa.gov.au or call 1300 364 785.
No. Debtors who have met their obligations (completed their payments) will not be asked by AFSA to pay more to cover the $1.1 million taken by Sam Pos.
Your obligations as a debtor are set out in your debt agreement. It is important that you continue to make payments as per your agreement. If you have any concerns or questions about your payments, please contact your AFSA case manager. If you are unsure who your case manager is or how to contact them please email OTDAtransfers@afsa.gov.au or call 1300 364 785.
This matter has raised several complex legal issues for which the Official Trustee is seeking guidance from the Federal Court. One of those matters involves the issue of Notices of Completion. Please see FAQ I’ve paid off my debt agreement. Why can’t I get my Notice of Completion?
Not issuing Notices of Completion has an impact on the National Personal Insolvency Index (NPII) and credit reporting.
We propose to provide information on NPII and credit reporting following the Federal Court’s decision and as next steps are determined.
Updates will also 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.
The Official Trustee 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 will provide further information on dividend payments following the outcomes of the Federal Court proceedings and as next steps are determined. Updates will also 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.
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 the dividends (money owed) as per the agreements.
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.
Due to the complexity of the legal issues, the need for detailed forensic accounting work and the impact of the misappropriation on the funds available for distribution to creditors, further Federal Court appearances may be required.
Updates will be provided on this web page as the matter progresses through the court system.
The purpose of the 10 April hearing was to seek judicial advice (guidance) to help inform 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.
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.
The Official Trustee is still awaiting the decision (guidance) from the hearing listed on 10 April 2024 Federal Court. The time to make a decision will depend on a number of factors, including the complexity of the case and the Judge’s workload. The Federal Court provides some guidance on judgements and orders, including around timing.
An update will be provided to affected debtors and creditors once the decision (guidance) has been handed down.
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
- map inconsistencies in data
- identify the best way forward for the benefit of both debtors and creditors.
Significant progress has been made but there are still complex legal questions that need resolving. In parallel with the Federal Court proceedings, we are continuing to progress other work to help resolve this matter in a way that is fairest for everyone involved.
Updates will be provided on this web page as the matter progresses.
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.
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
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.