Debt collection guideline: for collectors and creditors

A flexible, fair and realistic approach to collection

The need for collection activity will be greatly reduced when debtors act promptly and responsibly, and collectors are flexible, fair and realistic. Debtors may default on their debts because of circumstances beyond their control, such as unemployment, illness or family breakdown. While there are cases of fraud and deliberate evasion, most people are honest and want to meet their commitments if given a reasonable opportunity to do so.

The ACCC and ASIC encourage flexibility on the part of creditors and collectors. This includes recognising debtors who are vulnerable and experiencing financial hardship, and recognising that debtors may have a number of debts owing to different creditors.2 A flexible approach involves making meaningful and sustainable payment arrangements that reasonably take into account a debtor’s ongoing living expenses to enable them to live in basic comfort and prevent impoverishment or humiliation.

2 Note that when a debt relates to a contract regulated by the NCC, s. 72 provides borrowers with statutory rights to have a variation considered. Repayment negotiations more generally are discussed in part 2, section 14, Repayment negotiations.