Credit Counsellors Australasia

In a paper published jointly by Consumer Credit Legal Service Inc and Eastern Access Community Health, November 2005 the authors are scathing not only of the process of Part IX in general but also of both administrators and brokers. As to administrators the paper states:

1. “the debt agreement administrator can charge fees ‘up front’ and as a deduction from payments” (sic).
2. “the money to be made from Agreements has created a new industry.”
3. “Many Agreements fail before they are concluded. Since the commencement of Part IX, the annual rate of Agreements exiting the system due to termination (failure) has ranged from 60% to 75%”
4. “The key identified causes of problems debtors experienced with Agreements are:
   1. Inadequate information about Agreements given to debtors prior to signing and Agreement proposal”
   2. Lack of information provided to debtors about other possible options;
   3. Lack of information given to debtors about the effect of an Agreement on their credit report;
   4. Lack of trained and/or experienced Administrators;
   5. Poor service provided by Administrators;
   6. Aggressive marketing and pressure selling of Agreements by Administrators;
   7. Unsuitability of many Agreements from the start;
   8. Misleading conduct by some Administrators; and
   9. Excessive fees charged by some Administrators.”

The paper however also states inter alia “Community based financial counsellors do not generally take on the role of Administrator for a range of reasons including concerns about holding clients’ monies”.

This comment alone may be seen to support a view that some jealousy may exist within the ranks of community service agencies as to the role of administrators.