Consumer Action Law Centre has welcomed the revised Debt Collection Guideline published by the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) today.
‘Debt collection is one of the most common reasons consumers contact our Centre for advice’, said Gerard Brody, CEO of Consumer Action Law Centre.
‘We regularly receive complaints about debt collectors refusing to negotiate reasonable payment plans or demanding large amounts before agreeing to instalments. In some instances, debt collectors have not provided information about debts being sought and add on significant additional fees and charges without clarifying the legal basis for doing so.
‘While creditors have a right for debts to repaid, debtors have important legal protections as well. This revised guideline should improve industry understanding of consumer protections, and lead to improved conduct by debt collectors’.
Consumer Action Law Centre welcomed a number of the revisions to the guideline including clarifications that:
- continually attempting contact with a debtor, for example leaving repeated ‘missed calls’ on mobile phones, may amount to undue harassment;[i]
- the law protects the income of some low-income debtors, for example where income is derived from a pension or government benefits;[ii] and
- it is unacceptable to pressure a debtor to pay a large upfront amount and state that only afterwards will the debt collector consider payment arrangements.[iii]
Mr Brody said that under Victorian law, debt collectors cannot continue to make contact with a debtor after it has received a written request not to, unless it is to issue or threaten legal proceedings.[iv]
‘This provision can protect debtors with low-incomes and limited assets from being continually badgered and worn down through regular contact. While those who are able to pay should do so without reference to legal processes, the court process can be more appropriate for those who have no means to pay as their limited income and assets will be protected’, said Mr Brody.
The guideline was revised following extensive consultation with consumer advocates, financial counselling services and industry representatives. Consumer Action publishes a range of self-help tool kits for consumers on dealing with debt and debt collectors: https://consumeraction.org.au/help-for-consumers/fact-sheets/fact-sheets-dealing-with-debt/ .
[i] See 3(g) and 5(d) of the guideline
[ii] See 14(d)
[iii] See 14(g)
[iv] S 45(2)(m), Australian Consumer Law and Fair Trading Act 2012 (Vic)