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21-369MR SR & Associates Pty Ltd not licensed to provide debt management services
On 17 December 2021, SR & Associates was advised by ASIC that its application for an Australian Credit Licence to provide debt management services was taken to be withdrawn. As a result of that withdrawal the National Consumer Credit Protection Act 2009 (National Credit Act) prohibits SR & Associates from providing debt management services after that date.
Previously, SR & Associates Pty Ltd (SR & Associates) was able to operate a debt management service because it had applied for a licence, and that application had not been dealt with by ASIC or withdrawn.
ASIC reminds credit licensees that under section 31 of the National Credit Act they are prohibited from conducting business with unlicensed persons.
On 29 April 2021, the National Consumer Credit Protection Amendment (Debt Management Services) Regulations 2021 (now set out in the National Consumer Credit Protection Regulations 2010) were made, which prescribe certain debt management services as a ‘credit activity’ for the purposes of the National Credit Act.
Under these amendments, from 1 July 2021, providers of debt management services (including firms offering ‘debt negotiation’ or ‘credit repair’ services) are regulated under the National Credit Act, and are required to obtain an Australian Credit Licence authorisation to provide a debt management service.
Transitional arrangements enabled providers of debt management services to continue to provide these services after 1 July 2021, if they had made an application to ASIC by 30 June 2021 to hold an Australian Credit Licence with a debt management authorisation and the application has not been withdrawn, or otherwise dealt with by ASIC. However, the transitional arrangements cease to apply where an application is withdrawn by the applicant or is dealt with by ASIC.
More information about the changes can be found here.