Submission: Licensing debt management firms
ARITA’s submission noted its support of reforms announced by the Treasurer on 15 January 2021 that ensure small business and consumers are protected from predatory practices of debt management firms by requiring them to hold an Australian Credit License when they are paid to represent consumers on matters related to credit activities.
We also submitted that the reforms needed to extend the exemption from licensing requirements for registered liquidators and trustees to the provision of debt management assistance outside of a formal appointment and capture restructuring pursuant to the new Part 5.3B, which by its very nature constitutes debt management assistance.
Highlighting that ARITA has long taken the position that illegal phoenix activity, facilitated by dodgy pre-insolvency advisers, is undermining the effective operation of the market and strips assets from other rightful creditors in external administrations, we reiterated our support for licensing but noted that it is only one piece of the puzzle in fighting illegal phoenixing.
Read ARITA's submission
Treasury consultation: Licensing debt management firms