Getting knocked back because of a default is frustrating for your clients, and it puts you in a difficult position as their broker. You want to help, but you also don’t want to sound like you’re pushing additional services when they’re already stressed about their finance application.
The key to a good default referral conversation is timing, context and positioning it as additional support rather than a sales pitch.
Got a client whose finance application is held up by a default? Our broker referral program shares the value with the introducer when their client engages us. One form. Structured intake. We run the whole dispute process so you keep the relationship.
This guide shows you exactly how to bring up default disputes naturally, what questions to ask, and how to position the referral in a way that feels helpful rather than pushy.
When to bring up default disputes
The conversation works best when it flows naturally from the finance situation, not as a separate topic. Here are the most natural moments:
During initial fact-finding
When reviewing their credit situation: “I can see there’s a default from 2022. Do you remember what that was about? Was it paid or are you still dealing with it?”
After a conditional approval with default conditions
When the lender wants explanations: “The bank is asking for a letter about the Telstra default. Do you recall the circumstances? Sometimes there are options to review these if the listing wasn’t handled correctly.”
Following a decline or pre-approval reduction
When defaults are the blocking factor: “The main issue here seems to be the unpaid defaults. Before we look at different lenders, it might be worth checking whether those defaults were listed properly.”
During credit file review discussions
When going through their free credit scan: “Looking at your file, I can see a couple of defaults that are affecting your options. Some of these may be worth reviewing, depending on how they were handled originally.”
Sample conversation starters
The natural inquiry approach
You: “I notice there’s a default on your credit file from early 2023. Can you tell me what happened there?”
Client: “Oh that. I thought I’d cancelled that gym membership but they kept charging me. I didn’t know about it until it went to collections.”
You: “Right, that’s actually quite common with gym memberships. Did you receive proper notice before it was listed as a default? Sometimes the process isn’t followed correctly, especially with automatic payments and address changes.”
Client: “I’m not sure. I think I might have moved house around that time.”
You: “That could be relevant. If the notices went to the wrong address, that might affect whether the default was listed correctly. There are people who specialise in reviewing these situations – it might be worth having someone take a look at the paperwork.”
The conditional approval conversation
You: “Good news – we’ve got conditional approval, but the bank wants a written explanation about the Optus default from last year.”
Client: “Ugh, I paid that ages ago. Why is it still causing problems?”
You: “Even paid defaults stay on your file for five years and can still affect lending decisions. The bank wants to understand the circumstances. When you say you paid it, do you mean you paid the original debt or you paid the default after it was listed?”
Client: “I paid the phone bill as soon as I found out about it, but by then it had already gone to collections.”
You: “That suggests the timing might be worth reviewing. If you weren’t properly notified about the overdue amount before it defaulted, that could be relevant. There are specialists who review exactly this kind of situation. Would you like me to put you in touch with someone who can check whether the process was followed correctly?”
What questions to ask
The right questions help you understand whether a default might be worth challenging, and they position you as thorough rather than pushy:
About the original debt
- “Do you remember receiving overdue notices before this went to collections?”
- “Were you at the same address when this happened?”
- “Did you dispute the original charges at the time?”
- “Was this debt from a cancelled service or an ongoing service?”
About the default process
- “Did you receive a notice that it was about to be listed as a default?”
- “Do you still have any of the correspondence from that time?”
- “Was the default amount higher than what you thought you owed?”
- “Did you pay it directly to the original company or to a debt collector?”
About current status
- “Is this showing as paid or unpaid on your credit file?”
- “Have you tried to get this removed or corrected before?”
- “Is this affecting other applications or just this home loan?”
These questions help you understand the situation while positioning yourself as someone who knows what matters in a default dispute.
How to position the referral
Focus on the review, not the outcome
Don’t say: “We can get this default removed from your credit file.”
Do say: “It might be worth having someone review whether this default was listed correctly. Depending on what they find, there may be grounds to challenge it.”
Position it as additional support
You: “While I focus on finding you the right loan structure, there are specialists who can review whether defaults were handled properly. It’s a separate process, but it could help with future applications even if we get this one through.”
Make it about their choice
You: “I can put you in touch with people who specialise in reviewing defaults, or we can just work with what’s on your file now. Either way, I’ll keep looking at lender options for your situation.”
Acknowledge the cost upfront
You: “There is a cost involved – they charge a flat fee for the review and dispute process. But given how defaults can affect lending for five years, it might be worth considering if there are genuine issues with how it was listed.”
Sample complete conversations
Scenario 1: Declined application
You: “I’ve got the formal decline from the bank. The main issue is the two unpaid defaults – one from Telstra and one from a gym membership. Before we approach other lenders, it’s worth understanding these better.”
Client: “I thought I’d sorted those out.”
You: “Let’s go through them. The Telstra one – do you remember what happened there?”
Client: “We moved house and I think some bills got lost in the transition. By the time I realised, it was already in collections.”
You: “That’s actually quite common, and it raises some questions about whether you received proper notice. If bills were going to the wrong address, that could affect whether the default process was followed correctly.”
Client: “What does that mean?”
You: “Well, there are specific steps creditors have to follow before listing a default. If you weren’t properly notified because of the address issue, that might give you grounds to challenge the listing. There are specialists who review exactly these situations.”
Client: “Would that actually work?”
You: “I can’t promise an outcome, but I’ve seen cases where defaults were removed because the proper process wasn’t followed. It depends on the specific facts and documentation. The question is whether it’s worth having someone review your situation.”
Client: “How much would that cost?”
You: “The service I’m familiar with charges $399 per default. So for both defaults, you’d be looking at around $800. They handle the whole dispute process and explain what they find. No undertaking of removal, but they’ll tell you whether there are grounds to challenge based on what actually happened.”
Client: “And this wouldn’t affect getting a loan now?”
You: “The dispute process runs separately. I’ll keep working on lender options while that happens. Even if we get you approved somewhere else, having incorrect defaults removed could help with rates and options down the track.”
Scenario 2: Conditional approval
You: “Great news – we’ve got conditional approval from ANZ. They want a letter explaining the Target default from 2022, and proof it’s been paid.”
Client: “I’ve got the receipt showing I paid it.”
You: “Perfect. When you paid it, was that after it had already been listed as a default?”
Client: “Yes, I paid it as soon as I found out about it, but it was already showing on my credit file.”
You: “Okay, so you weren’t aware of the debt before it defaulted?”
Client: “No, I’d moved and they had my old address. The first I heard about it was when I checked my credit file for this loan application.”
You: “That could be significant. If they were sending notices to the wrong address, there might be questions about whether the default process was followed properly. I’ll draft the letter for the bank based on what you’ve told me, but you might also want to consider having the default itself reviewed.”
Client: “What would that involve?”
You: “There are specialists who review whether defaults were listed correctly. They’d look at the timeline, the notices you received, the address records – that sort of thing. If the process wasn’t followed properly, you might have grounds to challenge the listing.”
Client: “Even though I’ve already paid it?”
You: “Yes, paid defaults can still be challenged if they weren’t listed correctly in the first place. And removing a paid default can still help with future lending options.”
Client: “Is it worth doing while we’re going through this loan?”
You: “The processes run independently. We’ll satisfy ANZ’s condition with the letter and payment receipt, but having the default reviewed could help long-term. It’s really up to you whether you want to pursue it.”
Common mistakes to avoid
Don’t oversell the outcome
Avoid: “This default will definitely be removed.”
Better: “Depending on what the review finds, you may have grounds to challenge this default.”
Don’t make it about the commission
Never mention referral fees or commissions. Keep the focus on the client’s benefit.
Don’t pressure for immediate decisions
Avoid: “You need to decide now while we’re working on your loan.”
Better: “It’s something to consider. The dispute process can run alongside getting your loan sorted.”
Don’t promise specific timeframes
Avoid: “They’ll have this fixed in 30 days.”
Better: “The process typically takes 30-60 days depending on how the creditor responds.”
Handling common client questions
“Will this affect my current loan application?”
Answer: “No, the default dispute runs separately from your loan application. I’ll keep working on your lending options regardless of whether you pursue the dispute.”
“How do I know if it’s worth the cost?”
Answer: “That depends on your specific circumstances and what the review finds. Generally, if there are genuine questions about how the default was handled, and it’s affecting your lending options, it can be worth reviewing. But there’s no undertaking of removal.”
“What happens if the default isn’t removed?”
Answer: “You get a clear explanation of why the default stands, which can actually be useful for future lender discussions. You also know you’ve explored all reasonable options.”
“Can you undertaking they’ll remove it?”
Answer: “No one can undertaking removal of a default. It depends on the specific facts and how the creditor responds. What they can do is review whether the default was listed correctly and challenge it if there are grounds to do so.”
What to check before making the referral
Before suggesting a default dispute, make sure you understand:
- The client’s timeline – When did the debt occur, when were they notified, when did it default?
- Address history – Were they at the same address when notices would have been sent?
- Payment status – Is the default paid or unpaid, and when was it paid?
- Impact on their goals – How much is the default affecting their lending options?
- Client’s attitude – Are they genuinely interested in reviewing it, or just frustrated?
Don’t refer defaults that are clearly valid and properly handled. Focus on cases where there might be genuine process issues.
Following up on referrals
Once you’ve made the referral, maintain appropriate boundaries:
Check in, don’t chase
Good: “How did you go with that default review we discussed?”
Avoid: “Have you booked your default dispute yet?”
Support their decision either way
If they proceed: “Good, I hope that works out for you. Let me know how it goes.”
If they don’t proceed: “No problem. We’ll work with your file as it stands.”
Keep the processes separate
Don’t delay their loan application waiting for default dispute outcomes. Process them independently.
How Default Gone helps
Default Gone helps Australians challenge unfair, incorrect or unlawfully listed defaults. We collect the relevant information, prepare the dispute, lodge it with the credit provider and/or credit reporting body, track the response and explain the outcome in plain English.
The standard Default Gone service is $399 per consumer, per default (limited launch pricing — normally $399). There are no stage fees, no success fees and no surprise invoices. The fee covers the work performed, not a sought outcome.
Brokers can refer clients through our partner program, which includes referral tracking and ongoing case updates to help you support your clients through the process.
Building trust through the conversation
The best referral conversations build trust by:
Acknowledging uncertainty
You: “I can’t promise this will be successful, but based on what you’ve told me about the address issues, it sounds like there might be grounds for a review.”
Positioning yourself as informed, not expert
You: “I’m not a credit specialist, but I work with people who are. From what I’ve seen, cases like yours sometimes have options.”
Focusing on the client’s long-term benefit
You: “Even if we get this loan through, having incorrect defaults on your file can affect things for the next five years. It might be worth checking.”
Being transparent about the process
You: “The dispute process typically takes 30-60 days. The creditor has 30 days to respond, and then there may be additional steps depending on their response.”
Next steps for brokers
When you’ve identified a potential default dispute case:
- Ask the right questions to understand the circumstances
- Position the referral as additional support, not a sales pitch
- Be clear about costs and realistic about outcomes
- Make the introduction without pressure
- Follow up appropriately while keeping processes separate
Remember, not every default is worth challenging. Focus on cases where there might be genuine process issues, and always position the referral as an option rather than a requirement.
Client stuck because of a default? Don’t lose the deal.
If a client’s finance application is held up by a default, you do not have to lose the client. Default Gone runs the entire dispute process — structured intake, document collection, lodgement and tracking. You keep the relationship. Our referral program shares the value with brokers, dealers, accountants and real estate agents who introduce clients we engage.
For more guidance on supporting clients with credit issues, see our guide on how the default dispute process works and realistic expectations for default removal timeframes.
Disclaimer
Default Gone is not a law firm and does not provide legal or financial advice. We do not undertaking that a default or judgement will be removed. Outcomes depend on the facts, documents and response from the credit provider, credit reporting body or relevant legal pathway.
Frequently asked questions
How do I know when a default is worth referring?
Focus on cases where there might be genuine process issues: wrong addresses, disputed debts, timing problems, or where the client wasn’t properly notified. Don’t refer defaults that are clearly valid and properly handled. Ask about the circumstances before suggesting a review.
What if my client asks me to undertaking the outcome?
Be clear that no one can undertaking default removal. Explain that the dispute process reviews whether the default was listed correctly and challenges it if there are grounds to do so. The outcome depends on the specific facts and the creditor’s response.
Should I wait for the default dispute before proceeding with their loan?
No, keep the processes separate. Continue working on their loan application while the default dispute runs in the background. Don’t delay their finance waiting for dispute outcomes, as the process can take 30-60 days.
How do I explain the cost to clients?
Be upfront about the flat fee structure. Explain that it covers the work performed, not a sought outcome. Position it as investing in their long-term credit position, since defaults affect lending for five years.
What if the client has multiple defaults?
Each default is assessed separately, with a separate fee per default. Focus on which defaults are most likely to have process issues rather than referring all of them automatically. Consider the client’s budget and priorities.
How do I follow up without being pushy?
Check in casually as part of your normal client contact. Ask how they went with the review rather than whether they’ve booked it yet. Support their decision either way and don’t make the loan application contingent on pursuing the dispute.
What information should I gather before making the referral?
Understand the timeline of events, address history during the relevant period, what notices they received, when and how they paid the debt, and whether they disputed it originally. This helps you assess whether there might be grounds for a challenge.
Can I refer paid defaults?
Yes, paid defaults can still be challenged if they weren’t listed correctly in the first place. Even successful removal of paid defaults can help with future lending options, as paid defaults still show on credit files for five years.