What Jordan Malouf And His Company Malouf Group Enterprises* Have Admitted They Did Wrong!
*Jordan Malouf’s Business Names & Websites:
- Credit Clean Australia;
- Credit Wash;
- Credit Fix Australia;
- Clean Your Credit;
- CreditFixAustralia.com.au; and
Further to our initial report on the Court Orders:
The Federal Court has now published the text of the orders made on Monday 23 April 2018 allowing us to examine the declarations of fact in addition to the orders (already reported) of the Court.
The orders are a consequence of an agreed set of facts that were filed with the Court by all parties together. We are still waiting on a copy of the agreed set of facts however, it seems reasonably clear that the substantive allegations brought by the ASIC have now been admitted by the company Malouf Group Enterprises and Mr Jordon Malouf.
For the original ASIC filing in the Federal Court Of Australia.
Who Are MGE?
Malouf Group Enterprises PTY LTD ACN 115 371 581 (“MGE”) has traded or advertised as Credit Clean Australia, Credit Wash, Credit Fix Australia, Credityourcredit and Clean Your Credit and at CreditCleanAustralia.com.au, MGEonline.com.au, Creditwash.com.au, CreditFixAustralia.com.au and CleanyourCredit.com.au.
Currently, it has registered the business names Credit Clean Australia and Credit Fix Australia to its ABN.
For an earlier Court case concerning MGE, which describes how the business operated see Veda Advantage Limited v Malouf Group Enterprises Pty Limited  FCA 255 (21 March 2016)
MGE Finally Admitted To Misleading And Deceptive Conduct In Relation To:
1. Falsely Claiming To Have Been Voted Number One
MGE claimed to have been voted “Australia’s number one credit repair solution company”, or “voted Australia’s first choice for a second chance” when in fact there had never been any vote “pursuant to an objective and verifiable voting process conducted by an entity other than itself.”
2. Publishing Fake Testimonials
MGE published testimonials on various websites that were not genuine testimonials from persons who had used the services of the company.
3. Lying About The Work They Would Do
MGE published the words “let us clean your credit” thereby leading people to believe that there would be services provided by MGE in relation to 3rd parties.
When in fact the scope of actual work performed by MGE in exchange for $1095 consisted of:
- MGE providing the consumer with a copy of the consumer’s credit report; and
- MGE providing the consumer with written instruction about, among other things, how to seek to repair their credit file; and
- MGE was not required itself to act on behalf of the consumer in dealing with third parties (such as creditors or the Credit Reporting Bodies).
4. Lying About Only Taking On Clients They Could Help
MGE had salespeople use a script that said:
- that upon receiving the consumer’s application MGE would obtain and consider the consumer’s credit file to determine whether MGE could assist with the negative listings; and
- before approving the consumer’s application MGE would establish whether credit providers had correctly followed any relevant procedures before making a negative listing.
When in fact:
- there was no review process (indeed there was no review team);
- applications were approved without establishing whether MGE could help the consumer at all;
- MGE did nothing until being paid; and
- only then obtained a copy of the report which may have revealed that there were no negative listings at all on the credit report.
5. Lying About Having An Investigation Team When All They Had Were Salesmen
MGE had salespeople use a script that said “once we receive your application, our investigation team will open your file and look into it” or “I’ll get that application straight to our investigation team and are or have an answer back to you within an hour.”
When in fact there was no investigation team separate from the sales representative the consumer was talking to.
6. Lying About Being Selective As To Clients They Took On
MGE had salespeople use a script that said “… now please don’t take it personally if you’re not accepted… Unfortunately, not everyone is… But if you are accepted and approved that’s great. I only say this as I had a client this morning that abused me because she wasn’t accepted so I just want you to keep that in mind, okay.”
When in fact no such client interaction had occurred that day.
7. Lying (by omission) About Whether They Could Guarantee Results
If a consumer asked MGE salespeople whether they could guarantee that the negative listings would be removed, MGE salespeople would refer to their guarantee policy, representing by omission, that the negative listings would be removed, when in fact they could not guarantee any such removal.
8. Lying About The Negative Consequences Of Not Acting Today
MGE salespeople said that because MGE had already checked the customer’s credit file (made an enquiry), that MGE’s enquiry would alert future lenders, and if the customer didn’t proceed there and then, they’d have to make a fresh enquiry later which might lessen the chances of getting finance.
When in fact this was not the case but rather “even if the company accessed the consumers credit record on multiple occasions, doing so would not be recorded on the copy of the credit report available to a credit provider, but rather would only be recorded on a copy of the credit report obtained by the consumer or the consumer’s representative.”
9. Having A Sales System Based On These Lies
MGE had a sales system that:
- targeted its services towards consumers who were financially vulnerable;
- created television advertisements and website advertising as conduits to telephone sales calls;
- paid its sales representatives in whole or in part by commission;
- used the conduct referred in paragraphs 1 to 8; and
- used unfair tactics
and was thereby engaging in conduct that was unconscionable.
If we compare these findings with the original allegations set out in the notice of filing of 30 June 2017, they are essentially the same allegations.
The Overall Aim Of The Lies
It is therefore clear that the MGE sales model consisted of misleading consumers to believe that:
- MGE had an investigation team who would look at applications when they were received;
- MGE did not accept every application but only those who would be successful;
- MGE had reviewed their application’s merit before accepting it;
- MGE had identified negative listings in their credit file before accepting the application;
- MGE had identified failings by the creditor in the default listing process which would enable the default to be removed before accepting the application;
- MGE would actively help the consumer to remove the default;
- MGE had implied, but not specifically stated, that it could guarantee success.
- clients had to act that day in order to secure assistance from MGE and to avoid further enquiries being recorded on their credit history if the client delayed the process to a later date.
- MGE was voted Australia’s number one business in this area.
Whereas In Fact
- all applications were accepted without any review process;
- there was no investigations team to undertake investigations in any event;
- only once the client paid MGE, was a copy of the credit file obtained;
- if there were no defaults on the credit file, MGE still retained their fee;
- if there was a default on the credit file, MGE would only provide written instructions suggesting how the client could remove the default themselves;
- MGE did not provide ongoing assistance in the form of dealing with third parties like Creditors, Ombudsman Services or Credit Reporting Bodies.
Observations On Penalties Imposed
MGE has been ordered to pay $1.1 million in compensation to reimburse only the customers who’d paid MGE when in fact they had no defaults to remove.
There was nothing ordered to compensate any of the customers who did have a default on their credit file, but who were otherwise misled and deceived by the conduct of the company.
The Court has found that there were people who believed MGE was going to actively help them with Creditors and Credit Reporting Bodies but instead, they were just left to try to “muddle through” on their own.
As ASIC said in its original filing (at 9f) :
“MGE represented that … after accepting a consumer for its service, MGE itself would act on behalf of the consumer in dealing with third parties to remove incorrect negative listings from their credit file. However, this was not the service offered pursuant to the MGE Agreement.“
There is nothing in the orders other than the comfort of knowing that the company has been fined $400,000, Mr Malouf fined $100,000 personally, and ASIC’s $100,000 costs to be paid.
In light Of The Above, Please Remember:
- MyCRA Lawyers is a boutique law firm focused solely on assisting clients to remove bad credit listings from their credit files;
- MyCRA Lawyers employs Solicitors and suitably qualified Paralegals;
- Our staff obtain and review client credit history reports, and the records of the creditor to identify potential breaches of the relevant rules and then advocate on behalf of clients;
- Our advocacy can include writing to, telephoning creditors and if necessary, Ombudsman Services, Privacy Commissioner (The Office of the Australian Information Commissioner), ASIC etc. on behalf of our clients;
- As a law firm, all our work is covered by our costs agreements. Sometimes our work is performed on a fixed fee basis but in any event, all work is fully itemised in written reports provided to the client;
- As a Law Firm, we operate a trust account, hold Professional Indemnity Insurance, are subject to overview by both the Legal Services Commission and The Queensland Law Society, and must meet the standards expected of the Legal Profession.
- All testimonials and reviews published by the firm are (as legally required) verifiable genuine comments, from actual clients.
We have previously published our views that credit repair work should be reserved for lawyers and you can read further here
If you would like to engage a firm with the expertise and proven track record to help you clean up your credit file for real, please call 1300 667 218 to make an appointment to speak to our professional, friendly team today.
Chief Executive Officer