The federal government has ignored warnings that a regulatory void is allowing so-called debt vultures to operate unchecked, consumer advocates say.
It has been 18 months since the Australian Securities and Investments Commission (Asic) warned that debt management firms were engaging in misleading or, in some cases, predatory conduct.
The firms offer to help often-vulnerable individuals manage their debts, usually by stopping calls from creditors or cleaning up their credit reports. But Asic found they often charged hidden fees and costs, used high-pressure sales techniques and had a poor understanding of their legal requirements.
Australia, unlike Britain, lacked a proper regulatory regime to govern the behaviour of debt manage…