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The investigation aims to weed out those exploiting financially vulnerable consumers by not meeting debt management terms, charging high fees, or not communicating adequately with customers.
ASIC said it is concerned some licencees are engaging in these unfair practices that can leave these customers worse off.
There are around 100 organisations in the sector offering these services that will come under the regulator’s scrutiny.
ASIC commissioner Alan Kirkland said there have been multiple reports of these debt management firms not following through on promises made.
“In one instance, we heard that a woman could not get an answer on why her debt management firm was not making any payments to her creditors. After numerous calls to the firm, she was told to enter into bankruptcy with no further explanation,” said Kirkland.
“Another man was at risk of having his car repossessed after his debt management firm failed to respond to default notices from creditors. When he cancelled his contract and asked for a partial refund from the debt management firm, they said there was a no-refund policy.”
Kirkland said these “disturbing” instances will help identify those who are breaching responsibilities.
The full report will come in 2026 and enforcement action is expected to follow.
The regulator provided some tips for consumers who are affected by credit repair or debt management providers:
- Any complaints about potential misconduct should first be made with your debt management firm and, if it is not resolved, can be taken up with AFCA.
- Consumers who are looking for debt help can find a range of free resources about managing debt on ASIC’s Moneysmart website.
- Free financial counselling is available via the National Debt Helpline on 1800 007 007.
- If financial challenges are impacting your mental health and wellbeing, help is available through Beyond Blue.
ASIC implemented a licensing regime for credit repair and debt management providers in 2021, aimed at protecting consumers.
Following this, the regulator commenced proceedings against Bakken Holdings, operator of Solve My Debt Now, in August 2023.
In June 2025, ASIC refused Bakken’s application for a credit licence, meaning Bakken cannot provide debt management services.
Chapter Two Holdings was hit with two infringement notices in April 2025 for alleged misleading statements made on its website after it claimed it had wiped $80 million in debt and saved consumers $30 million in interest.
[Related: ASIC targets brokers amid crackdown on predatory lenders]
