The Australian Financial Complaints Authority has used its power to exclude credit repair companies and other paid representatives for the first time, banning MCR Partners from lodging complaints on behalf of consumers and small businesses.

MCR, which describes itself as an accounting firm “dedicated to helping and individuals and small business in financial hardship”, is excluded from lodging complaints for 15 months.

AFCA did not spell out the reasons for the ban but its rules allow it to take action where “the agent is engaging in inappropriate conduct which is not in the best interests of the complainant.”

While AFCA said it will not deal with MCR on any new or existing complaints, it will continue to process complaints currently in the system, either dealing directly with the complainant or a replacement representative.”

AFCA chief executive David Locke said in a media release: “It is important that consumers know they do not need to pay someone to lodge a complaint with AFCA. We are free to consumers.”

Paid representatives have long been a thorn in the side of financial ombudsman services. A number of submissions to the 2014 Financial System Inquiry criticised credit repair companies for charging high fees to deal with matters that could otherwise be done free of charge, for promising to fix things they could not fix (such as default filings in credit reports) and for making the process of external dispute resolution more litigious.

In 2015, Ian Ramsay, Paul Ali and Lucinda O'Brien from the Melbourne Law School published a review the credit repair industry, arguing that the sector should be regulated.