Untrustworthy debt advisors

If you’re facing personal financial problems, it’s important to know where to go for help that you can trust. That means speaking to an independent advisor who can give you options, and help you make the right decisions for your situation.

In your search for debt and bankruptcy help or information about debt consolidation, you may come across unregulated, unlicensed advisers. Some advisors provide untrustworthy advice, purposely targeting vulnerable people in times of financial crisis and pressure.

Don’t be caught off guard, learn how to identify signs of dodgy debt advice. Remember, if it sounds too good to be true, it probably is.

Video: Untrustworthy debt advisors

Where to get help

If you are in debt and need help to work out what to do, there are a number of options available to you. For more information about informal options see Dealing with debt or for information about your formal insolvency options see What are my options?.

You can also get help by speaking to a free financial counsellor. Financial counsellors offer free, independent and confidential services to help you get back on track and discuss your options for dealing with unmanageable debt. To speak with a financial counsellor contact the National Debt Helpline on 1800 007 007

For more information about who to contact for genuine debt advice visit Where to find help.

Case study: Untrustworthy advisors

 

Case study: Manpreet

Beware of dodgy advice

Remember Manpreet? He owns and operates a coffee bean supply company, roasting his own beans and selling them to local cafés.

Despite some recent uptick in trade since COVID-19 hit Australia in March, most of his customers (small local cafés) continue to be impacted financially. This is taking its toll on Manpreet’s cash flow and his ability to pay his own debts on time.

Manpreet’s business and personal debts are now over $700,000, so he decided to research what he could do to get out of debt quickly. While searching, Manpreet stumbled across an ad that read:

“Get out of debt in 10 minutes. Start again with a clean slate.”

Despite thinking this was too good to be true, Manpreet was under a lot of stress and decided to click on the link anyway. Before he knew it, he was talking with Dodgy Dave, a representative from the company that placed the ad.

Dodgy Dave advised Manpreet to transfer his coffee bean business and his house, which he owns outright and is valued at $1 million, into his wife’s name, and then declare bankruptcy. He said that would allow Manpreet to wipe the slate clean, be debt free, keep his house and continue running his business. The only catch would be that Manpreet would need to pretend that his wife was now running the business.

Dodgy Dave wanted $20,000 in cash for the advice and to fill in some paperwork. Manpreet went home after work that night and discussed the advice with his wife. Manpreet’s wife didn’t like the sound of Dodgy Dave’s advice, and told Manpreet to contact the National Debt Helpline for free financial counselling.

The National Debt Helpline’s financial counsellor explained to Manpreet that taking Dodgy Dave’s advice could result in a criminal conviction. Instead, the financial counsellor explained the legal options available to Manpreet, provided advice on how to negotiate with his creditors and recommended that he contact AFSA about the advice he received from Dodgy Dave.

 
*These case studies do not constitute legal or financial advice. You should consider whether the options referred to in the case studies are appropriate for you, and seek advice if necessary, before taking any action.