Consumer advocates have long been concerned that debt management firms charge people for services they can access for free.
Consumers suffering financial hardship are being charged a variety of fees by firms that promise to help restructure personal debt and offer no refund if they fail.
The fees are high and often opaque, according to an investigation started by the Australian Securities and Regulation Commission (ASIC) following complaints by consumer advocates, banks, lawyers and ombudsmen schemes.
The credit card market is fiercely competitive, but lenders are battling it out on reward and loyalty features rather than interest rates.
A senate inquiry has found that competition is generally more intense on less important card features, such as rewards and transfer programs.
The Senate Economic References Committee’s report released prior to Christmas says consumer inertia means many people have the wrong product for their needs and often don’t know the interest rate they are paying.