COSL has asked industry and consumer groups for feedback on proposed changes to the way they deal with credit repair agencies and other representatives of consumers who ‘behave badly’.

COSL is concerned that some credit repair agencies target consumers in financial distress and charge them significant fees to access services that consumers can access without charge.

Other ‘bad behaviours’ include obstructing COSL’s dispute resolution process, making unreasonable decisions (such as ones which will increase the consumer’s liabilities) and engaging in misleading and deceptive conduct. You can read the full media release here.

FOS has also sought to address concerns about representatives behaving badly. In its recently released consultation paper on proposed changes to its terms of reference, it has proposed empowering FOS to:

  • refuse to consider a dispute lodged by a fee-for-service agent (not including legal aid, financial counsellors and community legal services) where the dispute is not accompanied by sufficient supporting information at the time of lodgement;  
  • require an applicant to stop using a representative if the representative’s involvement is inconsistent with the cooperative, efficient, timely and fair resolution of the dispute.

Other notable proposed changes to the terms of reference include:

  • creation of the role of Adjudicator to deal with low value disputes;  
  • implementation of a one step process, under which complaints will be automatically referred to the credit provider’s IDR scheme;  
  • shortening the timeframe for FOS to close complaints which fall outside the Terms of Reference; and  
  • excluding disputes about small business facilities which exceed $3M.

The changes are slated to commence on 1 January 2015.