iscoverThe Australian Financial Security Authority has revealed its regulatory focus for 2025–26 to help identify key harms which undermine the insolvency system, adversely impacting Australians.
AFSA to home in on 4 ‘key harms’ in FY25
30 July 2025
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8 minute read
As part of its third annual Regulatory Action Statement (RAS), AFSA has identified four key harms it will focus on for the financial year ahead to help mitigate their impacts on society.
AFSA noted its objective for the RAS was to outline how it would address misuse of Australia’s credit system as it aimed to “ensure confidence in Australia’s personal insolvency and personal property securities system and manage proceeds of crime”.
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The four “key harms” outlined by AFSA included manipulating personal insolvency proposals and creditor meetings to protect wealth, unauthorised access to trust funds for personal gain, harmful insolvency advice and debt agreements and not removing registrations on the Personal Property Securities Register (PPSR).
According to the body, it would achieve its aims through full use of its regulatory toolkit of education, compliance, investigation and enforcement, as well as the application of the Compliance and Enforcement Policy 2025-30.
Tim Beresford, AFSA chief executive and bankruptcy inspector-general, said these key harms were not new, but were ongoing issues that required targeted and sustained intervention.
“We must be alert to changes we’re seeing in the personal insolvency landscape and address identified harms, so they don’t undermine confidence in the system,” he said.
“A strong personal insolvency system is one where there’s collective stewardship and appropriate regulation, which maintains the integrity of the system and is critical in ensuring public confidence and the flow of credit in the economy.”
AFSA said it would focus on intensifying its scrutiny of personal insolvency agreements and creditor meetings to protect Australians and ensure they were not being manipulated.
Enforcement efforts would also be continued, including intervention in unreasonable proposals, setting aside arrangements that caused harm and taking disciplinary action against trustees who failed to conduct proper investigations.
Beresford said AFSA would continue to address “widespread concern” from industry about the rise in harmful insolvency advice and debt agreements.
“We know there are individuals out there who seek to exploit the system for their own personal benefit, working on preventing this is a top priority.”
“The management of practitioner trust accounts will also come under greater scrutiny to prevent mismanagement, and illegal behaviour ranging from unauthorised fee withdrawals to reckless or deliberate misappropriation of client funds.”
AFSA also noted that it would seek to reduce the misuse of the PPSR, which would delay finance applications, disrupt loan settlements and harm credit access for individuals and businesses.
“We are working hard to ensure debtors are aware of their rights, including access to free advice. While targeting advisors that encourage debtors to avoid obligations or enter damaging agreements,” Beresford said.
“AFSA will investigate all suspected misconduct, and take the necessary enforcement action against these advisors.”
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