A Federal Court ruling, which found debt collection agency ACM Group (and its predecessor Accounts Control Management Services) engaged in misleading and deceptive conduct as well as undue harassment and coercion, has been welcomed by the Consumer Action Law Centre. The Centre, which regularly deals with clients being chased for money by ACM Group, said the ruling confirmed what it had long suspected – that some of ACM Group’s debt collection tactics breached the consumer laws.
‘ACM Group has been on our radar for a number of years, so we congratulate ASIC for taking action against them, and we’re pleased that its enforcement work has been successful,’ said Gerard Brody, Consumer Action’s Director of Policy and Campaigns.
Consumer Action has provided ASIC with information on a number of cases where consumers have alleged misconduct by ACM Group and its predecessor. Such cases included allegations that ACM Group:
- unfairly threaten bankruptcy over small debts;
- threatened legal action in circumstances where the debtor’s income and assets were such that enforcement of a judgment debt would not be possible through courts;
- refused to negotiate reasonable payment plans, including demanding large amounts before agreeing to instalments;
- did not provide information about debts being sought, including breakdowns of how debts escalated with added fees and interest;
- inappropriately contacted employers and family members about personal debts; and
- threatened legal action when it had no plans of actually taking a matter to court (the Federal Court decision demonstrates that ACM Group rarely initiated proceedings, but routinely misled debtors about impending legal action).
Mr Brody said it was pleasing that in the context of the legal action, ACM Group had revised its debt collection procedures significantly. He said it was significant, however, that the Court proposed injunctive relief, particularly to prevent ACM Group engaging in undue harassment or coercion in the future.
‘While the level of enquiries has reduced, our Centre has received calls about ACM Group this year and even in recent months. Where we hear of debt collection conduct that is unreasonable in its frequency, nature or content, we refer them directly to regulators’ said Mr Brody. Consumer Action also said this decision should act as a warning to large companies like banks and telecommunications companies that routinely sell debts to external collectors.
‘Firms that sell debts to external collectors should have adequate controls to ensure those collectors abide by the law. If a consumer disputes a debt being sought by an external collector, firms should consider buying back debts so that consumers can fairly resolve complaints and disputes with the original creditor,’ said Mr Brody.
Media contact: Dan Simpson: 0413 299 567