Debt Wipeout founder David Murphy has been found unfit to stand trial and unlikely to become fit in the next 12 months, following a fitness hearing in the NSW District Court.

On 26 April 2022, Mr Murphy was charged with four counts of engaging in dishonest conduct while carrying on a financial services business and three counts of making false or misleading statements (22-102MR).  ASIC alleged that Mr Murphy, by advertising the Debt Wipeout business on billboards, websites and in person, represented that he could discharge consumers' debts for an upfront payment when he could not, and did not discharge those debts.

The matter was referred to the NSW District Court after a question as to Mr Murphy’s fitness to stand trial was raised.

In determining that Mr Murphy is unfit to stand trial, Judge Beckett relied on medical evidence tendered by the Crown. Judge Beckett found that, despite Mr Murphy being unfit to stand trial, a prima facie case had been established in relation to each of the offences for which Mr Murphy had been charged.

Her Honour made an order under s 20BC(5) of the Crimes Act 1914 (Cth) to release Mr Murphy with conditions, including that he:

• Obtain and accept treatment as recommended to him by his medical provider,
• Not provide financial services or financial advice of any kind, including by a way of a website or social media.

ASIC investigated Mr Murphy following reports from consumers affected by his activities. ASIC then referred a criminal brief to the Commonwealth Director of Public Prosecutions resulting in charges being brought against Mr Murphy.  

Background

ASIC previously obtained Federal Court orders against Mr Murphy and other parties, including orders which prohibited Mr Murphy from carrying on, advertising or promoting a business in which consumers with debts pay for Mr Murphy or certain other parties to discharge the consumer’s debts with a non-cash payment (20-243MR).

On 27 April 2021, ASIC obtained additional orders by consent in the Federal Court restraining certain other parties from carrying on, promoting or providing referrals to any business associated with Mr Murphy or another party, where consumers pay for their debts to be discharged with a non-cash payment (21-089MR).

Moneysmart.gov.au has further information about getting debt under control, and how to manage debt.