Debtor harassment

Contributed by Elizabeth Samra of Consumer Law Centre of the ACT and Liisa Wallace of Care Financial Counselling, and current to March 2022

A debt collector may become involved in the process if a debtor has been unable to reach agreement to pay debts with the original creditor. Some companies employ debt collection agents; others sell debts to debt collectors, or buy out companies that then seek to recover the money from the original debtor.

It is important that anyone who says they are collecting a debt can prove the debtor owes the money. If the debtor owes money claimed by a debt collector and reaches a repayment arrangement, then providing the arrangement is adhered to, the debtor should be able to deal with a debt collector like any other creditor.

If a debtor is pursued by a debt collector and disputes the debt, an arrangement should not be made without first obtaining legal advice.

There are prohibitions on certain debt collection practices, including:

• Deception: A debt collector sends a letter that looks like a legal letter/summons;
• Breaches of Privacy: a debt collector discusses debts with relatives, neighbours or employers without the individual’s consent;
• Fear: A debt collector writes aggressive letters or makes verbal threats about what will happen in the event of non-payment;
• Harassment: a debt collector makes persistent phone calls or calls late at night or early in the morning.

For more information see the Debt Collection Guideline for Collectors and Creditors . The ACCC and ASIC have jointly produced this guideline which aims to assist creditors, collectors and debtors understand their rights and obligations, and ensure that debt collection activity is undertaken in a way that is consistent with consumer protection laws.