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For more information on what behaviour may be considered unlawful, see our factsheet:

Debt Collection: Prohibited Debt Collection – I am being Hassled by a debt collector and contact Consumer Action.

Seeking compensation for unlawful debt collection practices through the Australian Financial Complaints Authority.

Step 1: Send a letter to the creditor or debt collector demanding compensation (an example is available here)

Step 2: Lodge your complaint with the Australian Financial Complaints Authority (check scheme the creditor or debt collector belongs to)

The Australian Financial Complaints Authority provide free dispute resolution for disputes with credit providers, lessors, and debt collectors dealing with credit contracts and leases.

Before proceeding you should make sure you understand all of your rights.  Details of where you can seek advice are listed below.

You may also wish to consider making an application to the Victorian Civil and Administrative Tribunal (see our factsheet: Debt Collection – Seeking Compensation in VCAT).  Generally, it is best to make a complaint to the Australian Financial Complaints Authority first.  If you are unhappy with the outcome, you can then consider making an application to the Victorian Civil and Administrative Tribunal.

If you have suffered a significant injury, you need to consult a personal injury lawyer urgently.

Sending a letter of demand

Before you make your complaint to the Australian Financial Complaints Authority you are generally required to send a letter of complaint directly to the debt collector.  An example letter is reproduced below.

It is a good idea to send a copy of your complaint to a government regulator (details below) to alert them to any unlawful debt collection practices that you have experienced.

Complaining to the Australian Financial Complaints Authority?

Generally, where there is a consumer credit contract or lease the credit provider, lessor and/or the debt collector must be a member of either the Australian Financial Complaints Authority.

You can check whether the company you are dealing with is a member of the Australian Financial Complaints Authority by checking on their respective websites or calling them.

What compensation can I seek?

The Australian Financial Complaints Authority

In addition to financial loss,  the Australian Financial Complaints Authority can provide compensation where there has been:

• an unusual degree or extent of physical inconvenience, time taken to resolve the situation or interference with the consumer’s expectation of enjoyment or peace of mind;

• injury has occurred to a consumer’s feelings or humiliation experienced in relation to a breach of privacy rights.

The maximum amount of compensation for non-financial loss will be $3,000 per claim made in the Dispute.

In addition to financial loss, the Australian Financial Complaints Authority can award compensation for, amongst other things, non-financial loss.  The Australian Financial Complaints Authority has not set any specific limits on when such damages will be awarded.

Past decisions by Courts and the Australian Financial Complaints Authority indicate that any award of damages is unlikely to be substantial.

Sample letter

For a sample letter click: Seeking compensation in relation to consumer loans and lease debts.

Further Information

For more information on what behaviour may be considered unlawful, see our factsheet: Debt Collection: Prohibited Debt Collection – I am being hassled by a debt collector and contact Consumer Action.

For an example of a consumer who was awarded $22,950 in compensation after a debt collector repeatedly breached its obligations, see Financial Ombudsman Service Circular – Issue 23 October 2015  – Seeking compensation for unlawful debt collection practices through the Australian Financial Complaints Authority.

Consumer Action Law Centre
Telephone: (03) 9629 6300, or 1800 466 477 for country or mobile phone callers.
Email: advice@consumeraction.org.au
If you are deaf or have a hearing or speech impairment, you can  call through the National Relay Service (NRS):

• TTY users can phone 133677 then ask for 1800 466 477
• Speak & Listen (speech-to-speech) users can phone 1300 555 727 then ask for 1800 466 477
• Internet relay users can connect to NRS on www.communications.gov.au then ask for 1800 466 477

Australian Financial Complaints Authority
Tel: 1800 931 678
www.afca.org.au

MoneyHelp
Tel: 1800 007 007
www.moneyhelp.org.au

Australian Securities and Investments Commission
Tel: 1300 300 630
www.asic.gov.au

Australian Competition and Consumer Commission
Tel: 1300 302 502
www.accc.gov.au

Consumer Affairs Victoria
Tel: 1300 55 81 81
www.consumer.vic.gov.au

Warning: This action sheet should not be relied upon as legal advice. This information applies only in Victoria and was updated on 31 March 2019.