“Debt management” firm J Daniels & Associates and Nationwide Debt Collection sued for breaches of Australian Consumer Law: MEDIA RELEASE

Consumer Action Law Centre (Consumer Action) has issued proceedings in the Federal Circuit Court of Australia on behalf of a Melbourne family who were charged over $8,000 in fees and had a caveat lodged over their home by J Daniels & Associates (J Daniels).

Katrina and Joe (surname withheld) allege that J Daniels misled them and engaged in unconscionable conduct.

J Daniels is a so-called “debt management” firm. These firms are very poorly regulated, with no requirements to be licensed, meet professional or ethical standards, act in their client’s best interest, or resolve complaints through the new Australian Financial Complaints Authority (AFCA).

Consumer Action CEO Gerard Brody said that the case demonstrates the need for immediate regulation of the debt management sector. “Our lawyers and financial counsellors regularly speak to families who have signed up to high risk, high cost services that simply do not help. In fact, many people end up in a much worse situation”

Katrina and Joe allege that in 2015, shortly after their lender commenced to repossess their home, they received personalised letters from Australian Real Estate Group (AREG). The letters warned that their lender was ‘one step away’ from obtaining a court judgment and taking their home.

After they received the letters, Katrina and Joe allege that J Daniels, together with AREG, suggested that they sign up to excessive services that would apparently save their home.

Katrina and Joe’s claim alleges multiples breaches of the law, including unconscionable conduct, misleading or deceptive conduct, failure to provide services with due care and skill and unfair contract terms.

The claim alleges that J Daniels:

  • did not negotiate directly with the bank in relation to their mortgage and repossession proceedings to help save their home;
  • failed to seek adequate instructions from Katrina and Joe;
  • acted against Katrina and Joe’s instructions; and
  • did not respond to the Financial Ombudsman Service (FOS) within the requested timeframes and did not pass on FOS’s communications to Katrina and Joe.

Katrina and Joe allege that, despite this, J Daniels engaged debt collectors Nationwide Debt Collection Pty Ltd to demand over $8,000.

A Senate Inquiry was recently launched into credit and financial services targeted at Australians at risk of financial hardship, including debt management firms. You can read our submission to the Inquiry here.

Katrina and Joe are not available for comment. Consumer Action are able to provide comment on debt vultures and the “debt management” industry.

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