Information about Credit Repair Agencies
CIO has become increasingly aware of some 'credit repair' agencies which offer to 'fix' a consumer’s credit records for a considerable fee.
The credit repair industry is not regulated. This means that anyone can offer credit repair services. No qualifications are required for practitioners.
The agencies obtain the consumer’s authority to access their credit records and then make a complaint to the credit reporting body or the credit provider that certain credit entries are incorrect and should be removed.
The credit repair agencies often also approach the various Ombudsmen, whose services are available to consumers free of charge, to have the entries removed. Indeed, about a third of all complaints CIO receives about alleged incorrectly listed credit defaults are from credit repair agencies.
The results of a survey conducted by the Energy and Water Ombudsman NSW (EWON) revealed that the minimum average fee per listing was around $1,000 despite the fact that in the overwhelming majority of cases, the debt amount for which the consumer was credit listed was under $500 and sometimes as little as $120.
What some credit repair agencies do not inform consumers is:
- if a default or other negative listing is correct, in most cases it cannot be removed from their credit records,
- they could approach the various Ombudsmen schemes (such as CIO, FOS, TIO, EWON and EWOV) to investigate incorrect listings for no charge, or
- the credit agencies themselves might be using these free Ombudsmen services despite charging consumers a fee.
Our approach to complaints about default listings and serious credit infringements is set out in our Position Statement 4
If you think a listing has been incorrectly made on your credit records and you cannot resolve the problem with your credit provider, you can make a complaint to CIO for free by completing a complaint form
If you are unsure whether you can make a complaint to us or you have questions about our process, you can call us on 1800 138 422.