Debt Collectors

If a debt collector contacts you, be co-operative. In turn, you should expect to be treated in a professional manner. Consumer groups have told ASIC and the Australian Competition and Consumer Commission (ACCC) that some debt collectors act unlawfully when it comes to getting money from creditors. Excessive or unreasonable contact by a debt collector may be unlawful. For more information, refer to Unacceptable behaviour by debt collectors on the ACCC website.

When and where can you be contacted about a debt?

A debt collector should only contact you when it is necessary to do so and when the contact is made for a reasonable purpose. A reasonable purpose includes:

• Making a demand for payment
• Making arrangements for repayment
• Finding out why an agreed repayment plan has not been met
• Reviewing a repayment plan after an agreed period of time
• Inspecting or recovering mortgaged goods (if they have a right to do so)

Generally, visits to your home (or another agreed location) should only occur if there is no other way the debt collector can make effective contact with you, or if you ask for (or agree to) a visit. If repayment arrangements can be worked out over the phone or by letter, then face-to-face contact should not be necessary. As a guide, any personal visits should be limited to once per fortnight and take place between 9:00 am and 9:00 pm.

A debt collector should not visit you at your workplace unless you request them to, or if you haven’t given them any other effective way to contact you. If a debt collector does contact you at work, they must not reveal information about your financial situation to others.

Repossession of cars, mortgaged goods

The Uniform Consumer Credit Code grants certain rights to consumers, but not business borrowers, concerning repossession of your car, furniture or other property that secures a loan. For instance, you must be given a written notice and 30 days to make up any arrears before your vehicle can be repossessed. You must also be given a further notice period before the goods can be sold. Contact your State Fair Trading or Consumer Affairs agency.

Are you being taken to court?

Creditors have the right to start legal proceedings to recover money – in other words, they can sue you for a debt. If they do, these legal proceedings will be civil rather than criminal, and will have nothing to do with the police or the possibility of jail.

If you receive notice that you are being taken to court (such as a summons or statement of claim/liquidated claim) you should act without delay. The action you decide to take will depend on whether or not you dispute the debt. In either case, you should get advice about your options as soon as possible.

If you are sure that you owe the amount claimed:

• Decide whether you can pay the amount in full. If you can, you should do so now
• If you cannot pay the full amount think about applying, within any timeframe allowed, to pay by instalments. You can arrange this with the court staff

If you dispute the debt because you do not owe the amount claimed, only owe part of the amount, or think you have a defence:

• Get legal advice immediately
• If you have a defence against paying the debt, you will need to file documents with the court. You should get legal advice before doing this

You must act immediately to file the necessary documents in the correct way and within the necessary timeframes. If you don’t, a judgment will generally be entered against you.