Debt collectors have the right to take reasonable steps to recover debts from you, but there are laws in place that are designed to protect you from being treated unfairly.
When can a debt collector contact me?
A debt collector should only contact you when it is necessary and when the contact is made for a reasonable purpose.
It is reasonable for a debt collector to contact you to:
seek payment of a debt or make an arrangement for payment of a debt
discuss a repayment plan or find out why an agreed repayment plan has not been met
inspect or recover mortgaged goods.
If contact is necessary, it should generally:
be limited to three phone calls or letters per week (or 10 per month)
be between 7.30 am–9.00 pm on weekdays and 9.00 am–9.00 pm on weekends
not be on national public holidays
no home visits unless there is no other way to contact you, or you agree to a visit and only one per fortnight between 9.00 am and 9.00 pm
no workplace visits unless requested by you or if you haven't given them any other way to contact you and no disclosure of your financial situation by the debt collector is allowed.
Unacceptable behaviour by debt collectors
The types of conduct set out below are likely to breach consumer protection laws, and may breach other laws as well. If you experience any of these behaviours (or other similar misconduct) you should take action. This is not a complete list.
Extreme conduct—force, trespass, intimidation
Debt collectors must not:
use or threaten force towards you, your family, or other person connected with you
damage or threaten to damage your property
block access to your property, or block your way
enter your property when you have refused permission, or fail to leave when you ask them to.
If you are confronted by extreme conduct, report it to the police.
Unreasonable contact, harassment, or use an overbearing manner
Debt collectors must not:
shout at you or abuse you
use obscene or racist language
make personal or demeaning comments
contact you more frequently than necessary or at unreasonable times
make other persistent contact or unreasonable disturbances.
You might also want to report some of the above this conduct to the police.
Embarrass or intimidate you through other people
Debt collectors must not:
threaten or harass people connected with you such as your spouse, partner or family member
make any unauthorised contact with a child under the age of 18 years
talk about your situation to other people unless you have agreed to the contact
engage in conduct that draws people's attention to your situation.
Some of these actions may also breach the privacy laws. More information on your privacy rights is available from the Office of the Privacy Commissioner. You can also lodge a complaint with them if you believe that the debt collector or creditor has broken privacy laws.
Make false or misleading statements and/or conduct
Debt collectors must not make false or misleading statements or engage in false or misleading conduct. For examples/
Debt collectors must not make false statements about the amount you owe, or the status of your debt, such as say:
you owe a debt when you do not
the amount you owe is greater than it is
you have no choice but to pay a debt if you have a valid defence against payment, unless there has been a court judgment.
Debt collectors must not make false statements about what will happen if the debt is not paid, such as say:
unpaid debts are a criminal offence involving the police or possibly jail
your children can be taken away from you (this is false)
you will be made bankrupt immediately, even though there has been no court judgment or bankruptcy proceedings started .
Debt collectors must not use other misleading appearances or actions such as:
send letters demanding payment that are designed to look like court documents
pretend to be (or pretend to act for) a solicitor, court or government body.
Other unfair or unconscionable conduct
Debt collectors must not:
take unfair advantage of you if you are disadvantaged because of illness, disability, age, illiteracy or other circumstances
take unfair advantage of you if you are ignorant of the law, the debt recovery process, or the consequences of not paying a debt.
More information
More information on the responsibilities of debt collectors is available in the free booklets Dealing with debt: your rights and responsibilities and Debt collection guideline for collectors and creditors jointly produced by the ACCC and the Australian Securities and Investment Commission (ASIC). You can download a copy of these booklets (see below) or contact our Infocentre on 1300 302 502 to ask for a copy to be mailed to you.
ASIC's consumer website, FIDO, also has lots of information to help you to manage your finances and deal with debt problems.
