Media Release: Credit Wash “cleans up” vulnerable consumer

Originally posted April 7, 2015


A former customer of Malouf Group Enterprises (Malouf), which holds itself out as being “Leaders in Credit Repair Solutions” has issued proceedings in the Victorian Civil and Administrative Tribunal (VCAT) against Malouf seeking damages for alleged breaches of the Australian Consumer Law.

In the case, the customer says that he engaged Malouf (trading as Credit Wash) after allegedly being told by the company that they could “clean” his credit file. However, the former customer says that his credit file wasn’t cleaned by Malouf, and he was instead told to make a complaint to various Industry Ombudsman Schemes.

“Our client told us he was motivated by Malouf’s television advertising which, he says, promised a clean start. But all he appears to have ended up with was a $1095 cost – and a referral to services he could have accessed for free”, said Gerard Brody CEO of Consumer Action Law Centre

“Despite Consumer Action receiving a number of calls about “credit repair” traders, efforts to respond to these business models are piecemeal because credit repair companies live in the regulatory gap zone. One regulator should be empowered to regulate any business purporting to provide solutions to credit reporting problems.”

“We have long called for action to tackle what we believe are misleading and exaggerated claims made by so-called “credit repair” businesses. For instance, despite presenting as a financial services provider, there is no requirement for these traders to be a member of an external dispute resolution scheme, such as the Financial Ombudsman Service,” said Mr Brody.

The case alleges that Malouf Group breached various sections of the Australian Consumer Law by engaging in misleading and deceptive conduct and by allegedly failing to render its services with due care and skill. It is also claimed that Malouf Group’s contract included an unfair contract term.

Media Contact: Michael Bellairs, 0413 299 567

Background:

  • Victorian residents with concerns about a ‘credit repair’ company can call Consumer Action’s advice line on 03 9629 6300, or for country or mobile callers 1800 466 477. Residents of other states should seek advice from their local community legal centre.
  • Australians can get a free copy of your credit report from Dun & Bradstreet or Veda.
  • Further information about credit reports and how to correct errors is available at MoneySmart or by ringing MoneyHelp on 1800 007 007.
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