AFSA announces its regulatory focus through its third annual Regulatory Action Statement, identifying 4 key harms which undermine the system and adversely impact Australians.
The focus areas for 2025–26 are:
- Manipulating personal insolvency proposals and creditor meetings to protect wealth
- Unauthorised access to trust funds for personal gain
- Harmful insolvency advice and debt agreements
- Not removing registrations on the Personal Property Securities Register (PPSR).
AFSA Chief Executive and Inspector General in Bankruptcy, Tim Beresford said: "These harms were not new, but ongoing issues that require targeted and sustained intervention.
"We must be alert to changes we're seeing in the personal insolvency landscape and address identified harms, so they don't undermine confidence in the system.
"A strong personal insolvency system is one where there's collective stewardship and appropriate regulation, which maintains the integrity of the system and is critical in ensuring public confidence and the flow of credit in the economy."
AFSA will be intensifying scrutiny of Personal Insolvency Agreements (PIAs) and creditor meetings to ensure they are not being manipulated to the harm of creditors.
We will continue enforcement efforts, including intervening in unreasonable proposals, setting aside arrangements that cause harm and taking disciplinary action against trustees who fail to conduct proper investigations.
"We know there are individuals out there who seek to exploit the system for their own personal benefit, working on preventing this is a top priority.
"The management of practitioner trust accounts will also come under greater scrutiny to prevent mismanagement, and illegal behaviour ranging from unauthorised fee withdrawals to reckless or deliberate misappropriation of client funds."
AFSA will continue to respond to widespread concern from industry about the rise in harmful insolvency advice and debt agreements.
"We are working hard to ensure debtors are aware of their rights, including access to free advice. While targeting advisors that encourage debtors to avoid obligations or enter damaging agreements. AFSA will investigate all suspected misconduct, and take the necessary enforcement action against these advisors."
Finally, AFSA will seek to reduce the misuse of the PPSR which can delay finance applications, disrupt loan settlements, and harm credit access for individuals and businesses.
Read AFSA's full Regulatory Action Statement.
