Debt collection guideline: for collectors and creditors

Who is this guideline for?

This guideline will help you to understand how the Commonwealth consumer protection laws apply to you if you are a:

  • debt collector (including a debt collection agency, debt buy-out service, in-house collection department of a business or government agency, solicitor and other)
  • creditor who uses external collection agencies to collect debts or sells or assigns debts to third parties.

This guideline applies to both creditors who are directly involved in debt collection and to specialist external agencies who provide debt collection services. When a creditor uses an agent for collection, the creditor (as principal) will generally be liable for their agent’s conduct when that conduct comes within the agent’s express, implied or ostensible authority.

A creditor may be responsible for their agent’s collection activities even if the agent acts in a way that is contrary to an agreement or understanding between the creditor and agent about how the collection is to be undertaken.

A creditor may also remain liable for conduct regarding a debt despite having sold or assigned the debt. Liability will generally remain for misconduct occurring before the sale or assignment of the debt.

The ACCC and ASIC encourage creditors to use this guideline to ensure their in-house collection activities are compliant with the Commonwealth consumer protection laws and to incorporate this guideline into their contractual and compliance auditing arrangements with their agents and assignees.

This guideline will also serve as a point of reference for financial counsellors and debtors’ advisers when negotiating with creditors or collectors about their practices.