The Federal Court has found that credit repair business, Malouf Group Enterprises Pty Ltd (Malouf Group), and its director Jordan Francis Malouf breached the Australian Consumer Law by making false and misleading representations and by engaging in unconscionable conduct.
Malouf Group has traded under various business names including: Credit Clean Australia, Credit Wash, Credit Fix Australia, and Clean Your Credit.
The court found that during the period of 1 January 2014 and 31 December 2015 Malouf Group in engaged in misleading conduct by:
- making of false representations on websites operated by Malouf Group as to its standing as a credit repair company;
- displaying false testimonials on the Malouf Group websites;
- making false representations as to Malouf Group’s ability to clean up a consumer’s credit history; and
- making false representations in Malouf Group’s sales scripts about the work Malouf Group had done for the consumer prior to the payment of the Malouf Group fee.
The court also found the tactics used by Malouf Group to induce people to enter into contracts were unconscionable, describing the conduct as ‘cynical and calculated’.
- a court-ordered pecuniary penalty of $400,000 for Malouf Group and $100,000 for Mr Malouf; and
- refunds up to a total of $1.1 million to consumers who did not have any negative listings on their credit files when they entered into contracts with Malouf Group during the 2014-2015 period.
Consumer Action is calling on the Federal Government to act on regulating credit repair businesses as a matter of urgency. Unlike other financial services providers, credit repair businesses are not licensed and are not subject to appropriate consumer protections.
For a history of problems with credit repair, see our submission to the Financial Services Royal Commission (p8-9), available here.
Consumer Action CEO Gerard Brody is available for comment.