Fair Debt Collection Practices In Australia

by Thomas Vargo

When recovering debts in Australia, debt collectors must act within the law. They must obey all of the laws that were designed to protect consumers from being harassed. Under this set of laws, a person, company, or organization must not use any type of coercion or physical force (such as forcing or compelling you to do something), hassle or harass you to an unreasonable extent, deceive or mislead you (or try to do so), take unfair advantage of any disability, vulnerability or other similar circumstance affecting you (this is known as unconscionable conduct).

The information below will help people who are currently being contacted by debt collectors or collection agents and who may be dealing with debt problems. It describes your rights that are outlined under the Commonwealth Consumer Protection Laws in Australia, as well as some general advice for people who are having problems with their level of debt.

Unacceptable And Unlawful Practices By Debt Collectors

The types of conduct set out below are likely to breach consumer protection laws, and may breach other Australian laws as well. This is not a complete list and if you are experiencing any of these behaviours or other types of similar misconduct, you should take immediate action against them.

Extreme Conduct - Trespass, Force, And Intimidation

Immediately report any extreme conduct you were confronted with, by a debt collector, to the police.

Debt collectors must not:

Threaten or use any type of force towards you, a family member, or any other person connected with you. Debt collectors must not threaten to damage or damage your property, block your way or block access to your property, fail to leave when you ask them to, or enter your property when you have refused permission.

Unreasonable Harassment, Contact, Overbearing Manner

Debt collectors must not:

Abuse you or yell at you, use racist or obscene language, make demeaning or personal comments (you might also want to report this conduct to the police), contact you at unreasonable times or more frequently than is necessary. For example, it is unacceptable to keep making phone calls to you without a break or to contact you late at night or at other unreasonable times as a way of exhausting or demoralizing you. They also are not allowed to make other unreasonable disturbances or persistent contact.

Intimidate Or Embarrass You Through Other People

Debt collectors must not:

Harass or threaten your family member, partner, spouse, or another person connected with you. Debt collectors must not attempt to make any unauthorized contact with a child under eighteen years of age, talk about your situation to other people such as co-workers, family members or neighbors, unless you have agreed to the contact. Such actions may also breach the privacy laws. Debt collection must also not engage in conduct that draws people's attention to your situation, such as send open letters to a shared post-box, leave messages that others may listen to, make their identity or purpose known to people you work with again. These actions may also breach privacy laws.

False Or Misleading Statements and/or Conduct

Debt collectors must not:

Make false statements about the status of your debt or about the amount of money you owe,. For example: Debt collectors are not allowed to say the amount you owe is greater than it is, say you owe a debt when you do not, say that you have no choice but to pay a debt if you have a valid defence against payment (unless there has been a court judgment), say that there has been a court judgment if this is not true, say that your partner or spouse must pay your debt when they have no legal liability to do so, make false statements about what will happen if the debt is not paid, or what the debt collector intends to do. For example, debt collectors must not say that unpaid debts are a criminal offence involving the police or possibly jail (being in debt is not a crime in Australia!), say that your children can be taken away from you (this is completely false), say that you will be made bankrupt immediately, even though there has been no bankruptcy proceedings started or court judgment.

They also can't say that your goods (such as your vehicle) will be seized and sold immediately, even though there is no mortgage over the goods and no court judgment (if there is a mortgage over the goods, generally you must be given notice and thirty days to pay first), say that your wages will be garnished (taken), even though a court order to allow this has not been obtained, say that your credit rating will be damaged, if that is not true (privacy laws limit the type of information that a credit reporting agency can hold on file, how long it can be on file, and who can access the information.

They are also not allowed to use other misleading actions or appearances. For example, debt collectors must not send letters demanding payment that are designed to look like court documents, pretend to be (or pretend to act for) a court, solicitor, or government body.

Other Unconscionable Or Unfair Conduct

Debt collectors must not:

Take unfair advantage of you if you are specially disadvantaged because of illness, age, disability, illiteracy or other circumstance or take unfair advantage of you if you are ignorant of the law, the consequences of not paying a debt, or the debt recovery process.

Complaining About Misconduct Or Harassment By Debt Collectors

The Australian Securities and Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) look after the Commonwealth laws that protect people from illegal debt collection conduct and undue harassment.

You should report any harassment that is ongoing and/or serious to the ASIC or ACCC, or to the fair trading agency or consumer affairs in your territory or state. You should report to the police any conduct that involves threats of violence or assaults.