Debt collection in Australia is guided by a series of laws and practices designed to ensure that both parties involved in debt, the debtor and the creditor, are treated fairly.
- Australian Consumer Law: This law provides consumers with certain protections and rights. It includes provisions for misleading conduct, unfair practices, warranties, and guarantees. It also provides for dispute resolution.
- National Consumer Credit Protection Act 2009: This legislation is designed to protect consumers in relation to credit-related matters. Lenders and other credit providers must hold an Australian credit license and adhere to responsible lending conduct.
- The Privacy Act 1988: This Act provides guidelines on how personal information can be used by businesses and government agencies. This is particularly important in the context of debt collection, where personal information is often used.
- Debt Collection Guidelines: These guidelines, developed jointly by the Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC), provide the debt collection industry with guidance on fair and appropriate behaviour when collecting debts. The guidelines cover the conduct of creditors and their agents and provide guidance on what constitutes harassment, the use of physical force, undue harassment or coercion for payment of debts.
- Bankruptcy Act 1966: This legislation governs the law of bankruptcy in Australia. It provides procedures for declaring bankruptcy and the consequences of bankruptcy.
These laws regulate how debts can be collected, who can collect them, and what methods they can use. Collection agencies are not allowed to harass or intimidate people who owe money and must respect privacy laws. If a person believes they are being treated unfairly by a debt collector, they can make a complaint to the ACCC or the ASIC.
What can Collection Agencies Do and Can’t Do
Debt collectors in Australia are regulated by both federal and state laws, and they have certain powers to collect unpaid debts. However, they must operate within the confines of the law. Here’s a general idea of what debt collectors can do in Australia:
- Contact You About the Debt: Debt collectors can contact you to request payment, explain the consequences of non-payment, offer to settle your account, or make alternative payment arrangements. They can contact you by phone, letter, email, social media, or face-to-face.
- Legal Action: If you refuse to pay a debt or can’t come to a repayment agreement, a debt collector can initiate legal action. This may include applying for a court order that demands payment of the debt.
- Bankruptcy Proceedings: If the debt is large enough, a debt collector can initiate bankruptcy proceedings against you.
However, the actions of debt collectors are also subject to restrictions under the law. For instance:
- They should not contact you more than three times a week or ten times a month, and not outside of the hours of 7:30am to 9:00pm on weekdays and 9:00am to 9:00pm on weekends.
- They should not contact you at your workplace if they know that your employer does not approve or if you ask them not to.
- They must respect your wishes if you ask to be contacted in writing only (though in certain circumstances they may be able to contact you by phone).
- They must not pursue you for a debt if you’ve requested evidence of the debt and they have not provided it.
- They must not mislead you, harass you, or act unconscionably towards you.
- They must not reveal information about your financial situation to others without your permission
Debtor’s Rights
- Be treated respectfully and professionally.
- Be informed about the details of the debt.
- Have access to assistance if they are in financial hardship.
- Make a complaint if they feel they are not being treated fairly.
Debt collection procedures often involve initially contacting the debtor to inform them of the debt and asking for payment. If the debtor is unable to pay, they may be able to negotiate a payment plan. If they still do not pay, the creditor may take legal action to recover the debt, which could result in the debtor’s property being seized, or in some cases, the debtor may be declared bankrupt.
In case your rights were violated then you may follow these steps.
Step 1: Contact the Creditor or Debt Collection Agency
Your first step should be to contact the creditor or the debt collection agency directly. It’s possible that the issue may be resolved through direct communication. Clearly explain your issue and provide any evidence you might have. Make sure to keep records of all communication.
Step 2: File a Complaint with AFCA
If your issue is not resolved satisfactorily through direct contact, you can file a complaint with the Australian Financial Complaints Authority (AFCA). AFCA provides fair and independent financial services complaint resolution that’s free to consumers.
You can submit your complaint online through the AFCA website or by calling them on 1800 931 678.
Remember to provide as much information as possible including details about your complaint, why you’re not satisfied with the outcome of your direct contact with the creditor or debt collection agency, and what outcome you’re seeking.
Step 3: Contact the ACCC
If the debt collector’s conduct has been particularly egregious, such as repeated harassment or intimidation, you can also report this conduct to the Australian Competition and Consumer Commission (ACCC). The ACCC regulates the conduct of debt collectors but note that they don’t resolve individual disputes.
You can contact the ACCC by calling their hotline at 1300 302 502 or filling out the complaint form on their website.
Step 4: Legal Action
If your issue still remains unresolved after these steps, you may need to consider legal action. This can be a complicated process, and it would be a good idea to consult with a legal professional or a financial counsellor before proceeding. Various community legal centres around Australia may be able to provide free or low-cost advice.
There may have been changes or developments in these laws It’s recommended to seek legal advice if you find yourself involved in a debt collection process.
Top Collection Agencies in Australia
- Milton Graham (formerly Dun & Bradstreet): Milton Graham has a long history of operations in Australia and offers a wide range of services including debt recovery and credit reporting.
- ARL Collect Pty Ltd (formerly known as Receivables Management Group): ARL Collect provides a full suite of receivable management solutions including debt purchasing, debt sale, and contingency collections.
- Collection House Limited: An Australian-based company offering debt collection services, receivables management, and debt purchasing.
- Lion Finance (part of the Collection House Limited group): Lion Finance is a large debt acquisition and collections company.
- Credit Corp Group: This is one of the largest debt collectors and buyers of debt in Australia.
- Baycorp: Baycorp is a leading player in the Australian and New Zealand debt collection industries.
- Probe Group: Probe Group provides a broad range of outsourcing services including debt collection.
- Prushka Fast Debt Recovery: An Australian-owned company that provides no recovery, no charge debt collection services.
- EC Credit Control: Offering debt recovery services, EC Credit Control also provides services around terms of trade and credit management.
- AMPAC Debt Recovery: AMPAC offers comprehensive commercial debt recovery services across Australia.
Each of these companies has a slightly different focus and different strengths, and they all operate within the legal frameworks provided by Australian law.
Remember to always do your own research when choosing a debt collection agency to work with, to ensure that the agency is reputable, treats debtors fairly, and complies with all applicable laws and regulations.