ACCC and ASIC take on rogue debt collectors

The Australian Competition and Consumer Commission and the Australian Securities and Investments Commission has declared tomorrow is “debt collection day”.

The Australian Competition and Consumer Commission and the Australian Securities and Investments Commission has declared tomorrow is “debt collection day”.

On 31 July, the two organsiations will man a dedicated hotline so members of the public who have had problems with over-zealous debt collectors can air their grievances.

ACCC chairman Graeme Samuel says both agencies have been concerned about reports of unlawful practices adopted by debt collectors and creditors when attempting to secure repayment of debts. Some of the troubling conduct includes:

• Heavy-handed collection tactics, including persistent and unreasonable levels of contact.
• Misrepresenting the consequences of non-payment.
• Unconscionable conduct in relation to the establishment of repayment agreements.
• Inappropriate contact with, or representations to, family members, work colleagues and other third parties in breach of privacy laws.
• Assignment or sale of the debt without notifying the debtor.
• Misidentification of alleged debtors and inappropriate credit default listing.

ACCC and ASIC say they will use the information obtained during the phone-in day to assess possible breaches of the Trade Practices Act or ASIC Act.

“We will not tolerate conduct where consumers have been threatened by debt collectors. Consumers who have been contacted at their home or workplace at unreasonable times, threatened verbally or physically, or have been hassled about debts they do not owe or have paid, are urged to call the hotline,” Samuel said in a statement.

The ACCC’s guide Dealing with debt: Your rights and responsibilities provides some handy tips about dealing with debt collectors. These include:

• If you cannot meet your financial commitments, contact the creditor without delay to discuss a repayment plan.
• When negotiating a repayment plan, be realistic about what you can pay, taking into account your other financial commitments. Be honest with the creditor or debt collector about your situation.
• Keep copies of any letters you send or receive and notes of any conversations you have.
• Make sure you actually owe the debt. Ask for proof (such as documents, account statements) if you think a debt is not yours or if you disagree with the amount demanded. Get independent advice if you are still not sure whether you have to pay.
• If you are contacted about a debt that is several years old, do not confirm the debt or make a payment until you get independent advice.
• Debt collectors can only contact you if it is reasonable and necessary. The ACCC considers “reasonable” contact is a maximum of three phone calls or letters per week (or 10 per month).
• Generally, visits to your home should only occur if there is no other way the debt collector can make effective contact with you, or if you ask for (or agree to) a visit.

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