​The growing tide against credit repair

by External10 Jan 2014
Clean Credit’s John Dickinson argues for a different perspective on credit repair

I recently read an article by Choice awarding a credit repair company with a Shonky Award. This seems to be the most recent in a long line of negative media regarding the credit repair industry.

Much of this media has gone unanswered, however as the director of what I believe to be an honest and ethical credit repair company, I feel it necessary to offer another perspective. 

Before I begin I acknowledge there are questionable practitioners within the credit repair industry and due to the behaviour of some, the industry is suffering an identity crisis at present. Unfortunately the lure of an unregulated industry has attracted its share of dishonest operators in search of a fast dollar; this is a great shame as these motives are not universal within the industry.

We do, however, need to keep this in perspective; from builders to accountants, I’m not aware of any industry that has not had issues with regard to dishonest behaviour. I’m sure most would have heard of corrupt behaviour within the legal industry and while it would be accurate to say some lawyers are corrupt, it certainly wouldn’t be fair to say all lawyers are corrupt; the same can be said for the credit repair industry.

I would venture to say that most journalists who have written articles about credit repair would have never been the victim of an incorrect credit listing or the reality of having to try to rectify this themselves. I’m confident that anyone who had would not be so quick to suggest a consumer can always resolve these problems themselves by making a simple call to a government body; I can assure you the truth is often far more complex and involved than this.

The general consensus with much of this negative media seems to be “credit repair companies are charging people for something they can do themselves for free”. As mentioned, I feel confident that most making this claim have never actually been involved with the process themselves, however could this not be said for most industries? Other than a few exceptions aren’t people free to do most things themselves rather than engage the services
of a third party?

The real question should be “is it always in the consumer’s best interest to do it themselves?”

It has been suggested that all credit repair companies do is lodge a complaint with the relative Ombudsman on their client’s behalf, nothing more. While there are some questionable credit repair companies doing just this, the same cannot be said for all within the industry.

I am in no way questioning or demeaning the place of any Ombudsman or other government resource, however I know from experience that in some cases consumers benefit from having the involvement of an experienced and engaged credit repair practitioner in their corner.

While in some situations credit repair companies will involve the applicable Ombudsman when dealing with a credit issue, discussions regarding legal process and legislation with the listing party should be handled directly by the credit repair company. Given this it is essential all practitioners within the credit repair industry have extensive knowledge in this area along with effective communication skills, but sadly this is not always the case.

In order to protect consumers, effective reform and regulation within the credit repair industry is essential; the problem is how to correctly and sensibly administer this. As the credit repair industry itself does not offer finance or financial advice, there doesn’t seem to be a current legislative platform directly suited to this industry. Given this, something will need to be designed which no doubt will take time.

In the meantime I believe there are immediate steps that should be taken to help protect consumers and ensure all operating within the credit repair industry are acting in the best interest of their clients.

I feel a positive start would be to ensure that all within the industry comply with the same requirements as a person applying for a credit licence. This would mean all concerned would be adequately background checked, including a police report, and must carry relative experience as well as having to belong to a recognised External Dispute Resolution Scheme such as The Financial Ombudsman Service.

I acknowledge this alone will not completely reform the industry but it would be a step in the right direction and help ensure a credit repair operator would be of suitable character and has an ability to operate within the industry.

I hope that time will show that the credit repair industry is not “evil” like it is currently being portrayed to be and when offered correctly it cannot only help people, but can change lives.