Facing debt collectors can be overwhelming, especially when you're unsure of your rights or how to respond.
Debt collection is a legitimate and necessary business activity used to recover money that consumers owe and are required to pay. A debt collector could be the original credit or service provider, or a debt collection agency acting on the creditor’s behalf. Sometimes debts are sold, and the debt buyer is the one doing the collecting.
If a debt collector contacts you, then you should be cooperative, but you should also expect to be treated with fairness, respect and courtesy.
Under Australian law, a debt collector cannot use physical force, harassment, threats or abuse to make you to pay your debt.
They also cannot make any statement or behave in ways that are misleading or deceptive. For example, impersonating someone or attaching a fake letterhead to a document. You have a right to seek a repayment arrangement, and you cannot be pressured into using your superannuation, borrowing money from friends or family or getting into further debt.
Any vulnerability or disability cannot be taken advantage of when collecting a debt and your personal information must be protected.
These laws also apply when contacting anyone connected to you. This includes a spouse, partner or family member.
The Australian Securities and Investments Commission and the Australian Competition and Consumer Commission have published joint guidelines about when a debt collector can contact you.
Contact must be for a reasonable purpose only, and communications must not be excessive. Generally, contact by letter or telephone will be the most appropriate form of contact.
Debt collectors should attempt to call you first before making face-to-face contact, and unless you have specifically requested or agreed to the visit, should only visit your workplace as a last resort.
In most circumstances, phone contact should be between 7.30am and 9pm on business days, and 9am to 9pm on weekends. Additionally, face-to-face contact should generally only take place between 9am and 9pm. However, it is important to note that what constitutes “reasonable contact” will differ in each situation.
Debt collectors must not visit your home or work if you’ve refused, and you have provided an alternative way to communicate. If asked to leave, they must do so immediately.
In Western Australia, debt collectors must be licensed and deemed to be a person of good character and repute and a fit and proper person to hold the licence. If you feel that you are being harassed or unfairly treated by a debt collector, let Consumer Protection know 1300 30 40 54 or email consumer@demirs.wa.gov.au.
Prevention is always better than cure, so if you find yourself struggling with debt or to negotiate with a debt collector, contact a financial counsellor near you for free help - fcawa.org or call the National Debt Helpline at 1800 007 007. The Consumer Credit Legal Service of WA can also provide free legal advice on debt issues through their advice line 9221 7066 or www.cclswa.org.au.