The Inspector-General in Bankruptcy has cancelled the debt agreement registration of Sam Pos Pty Ltd trading as Debtcutter, effective 8 March 2023.
The Australian Financial Security Authority (AFSA) received a tip-off highlighting allegations of financial mismanagement within the company, impacting returns to creditors. An inspection by AFSA in February 2023 identified issues with record management and risk controls.
AFSA issued a show cause notice to Debtcutter, raising concerns about the management of their debt agreement business. Debtcutter did not dispute the issues raised in the show cause notice.
The Inspector-General found that Debtcutter did not meet the standards of the Bankruptcy Act 1966 or the fit and proper person requirements to maintain registration as a debt agreement administrator.
AFSA Chief Executive Tim Beresford highlighted the importance of registered debt agreement administrators being trustworthy, acting with integrity and discharging their duties responsibly.
‘AFSA has a critical role overseeing Australia’s personal insolvency system,’ Mr Beresford said.
‘We take strong action against deliberate misuse and wrongdoing. In this case we identified that Debtcutter was no longer fit to be registered as a debt agreement administrator and we deregistered them.
‘This should serve as a reminder to all insolvency practitioners that AFSA will act swifty and decisively in such matters.’
‘Tip-offs are an important way for AFSA to maintain the integrity of the personal insolvency system.’
‘I encourage anyone who has information about suspected wrongdoing, criminal misconduct, dishonesty or fraud to report it.’
‘The tip-off form takes a few minutes to complete and you can remain anonymous.’
‘Creditors also have a role to play in identifying and reporting anomalies in dividends or other payments.’
Existing agreements that were administered by Debtcutter will now be administered by AFSA, as the Official Trustee. Those impacted by the deregistration have been contacted directly.
Further information about the fit and proper person requirements for personal insolvency practitioners is available in AFSA’s practice guidance.
For more information about anonymous tip-offs see Reporting a tip-off.
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