When people on the verge of defaulting during the pandemic went to Solve My Debt Now, they expected help.
But despite the name, the debt management company allegedly rarely paid down clients' outstanding debts, and often left them in a worse position.
The alleged conduct was revealed by business regulator ASIC on Thursday as it detailed court proceedings against Solve My Debt Now's operator, Bakken Holdings.
ASIC says consumers were subject to an "unconscionable system of conduct" that could or did leave them with higher debts or more adverse entries on their credit report.
Between April 2020 and June 2022, Bakken collected $3.6 million from 978 customers.
However, only $1.1 million of this money was passed on to creditors representing 348 customers, court documents allege.
The unlicensed financial services company allegedly prioritised its own fees over creditors, who only received funds after striking an agreement with Bakken.
In many cases, the fees Solve My Debt Now charged for its services exceeded the amount the debts were reduced, leaving clients worse off.
"To have customers engage a debt management company and be worse off in their debt, as we allege here, is completely unacceptable," ASIC deputy chair Sarah Court said in a statement on Thursday.
"Debt management businesses are supposed to help people find a pathway out of debt, but instead, we allege, Solve My Debt Now signed customers up to a service that provided little to no financial benefit.
"In many cases, it worsened the client's financial hardship situation."
ASIC also accuses Bakken Holdings of making more than a dozen false or misleading representations.
These include that it had the power to remove black marks on credit reports, or that it could require creditors to cease recovery action.
Customers were also financially rewarded for leaving positive reviews on Facebook, while staff received commissions for signing up new clients, such as those coming off JobKeeper or juggling multiple pay-day loans.
The Federal Court case also accuses Bakken's director and co-owner, North Avoca woman Merrilyn Anne Mansfield, 59, of taking part in some of the alleged false or misleading representations made by her company.
Dr Mansfield, who holds a PhD in religious studies, owns a 50 per cent stake in Bakken.
She was contacted for comment.
An automatic email reply stated Solve My Debt Now did not pay clients' debts, but negotiated payment plans on their behalf.
"Our primary goal is to get interest and fees held on your debts. In a high proportion of cases, we achieve this," Dr Mansfield's auto-reply said.
She also said the company had a "kindness policy" and would block and delete any email "that is less than kind, to preserve the mental health of our wonderful team".
ASIC is seeking declarations, pecuniary penalties and a disqualification order from the court.
The case will be heard in the Federal Court at a later date.
