Debt collection guideline: for collectors and creditors

23. Compliance programs

  1. A company is liable for the conduct of its employees and agents even if they inadvertently break the law. Compliance programs cover all relevant competition and consumer laws that apply in Australia and there are also compliance programs aimed at ensuring companies meet their corporate responsibilities.
  2. Compliance programs can also be used to cover other areas of the law, such as privacy, discrimination, and other matters that may be relevant to debt collection activities. In addition to Commonwealth laws, a company must also consider the local state or territory laws in any jurisdiction within which it operates. In most cases where a company breaches these laws and has no compliance program, the court will order that an effective compliance program be implemented by the company.
  3. A robust compliance program is a prudent risk management tool which assists managers and staff to understand their legal obligations and reduces the risk of breaching competition, consumer and other relevant laws.
  4. You should establish and implement clear, appropriate, effective and fair policies and procedures for identifying and dealing with vulnerable debtors. A debtor may be vulnerable for a variety of reasons including experiencing mental health problems or mental capacity limitations.
  5. Implementing a compliance program that guards against anti-competitive conduct or conduct in breach of the consumer protection laws or other relevant laws makes an open commitment to comply with those laws and can:
    • improve business performance
    • boost market position by promoting good corporate citizenship
    • enhance your firm’s reputation with customers and with staff
    • encourage innovation
    • encourage feedback and build customer loyalty through an open and effective complaint-handling procedure that can help identify illegal conduct within the business
    • in the event of a breach convince the court to reduce penalties or fines.
  6. The nature of an appropriate compliance program will depend on the profile of the company. Each program should be tailored to a company’s business activities and the particular risks it may face. For compliance programs to be effective there must be a strong commitment from senior managers to building and maintaining a culture of compliance.
  7. Australian Standards can assist when setting up a compliance program, for example:
    • compliance programs AS 3806–2006
    • handling customer complaints AS ISO 10002–2006.
  8. The ACCC has developed compliance program templates that can be adapted for companies of any size or risk profile and also general guidance in relation to compliance programs. To obtain these templates and further guidance, please visit the website
  9. Under the NERL, energy retailers are required to develop policies, systems and procedures to enable them to efficiently and effectively monitor their compliance with requirements under the NERL. The AER is responsible for monitoring, investigating and enforcing energy retailers’ compliance with their obligations under the NERL in each state and territory where the NERL has commenced. The AER has published Compliance Reporting Procedures and Guidelines and a Statement of Approach which supports these functions and provides information to stakeholders on how the AER will approach its responsibilities in this area.

Compliance programs and the law

  1. The Federal Court has given considerable weight to the compliance culture of companies. One of the factors to be considered when setting penalties is:

Whether the company has a corporate culture conducive to compliance with [the CCA], as evidenced by educational programs and disciplinary or other corrective measures to an acknowledged contravention.

Justice French, Trade Practices Commission v CSR Ltd [1990] FCA 521 at [42]

  1. The court does not consider the cost of such a program to be an excuse for not having an effective compliance program:

The cost of failing to comply should be set at a level which is significantly greater than the cost of ensuring compliance (via a compliance program).

Justice Emmett, ACCC v MNB Variety Imports Pty Ltd [1998] FCA 81

The court does not consider the mere existence of a program as a cause to reduce penalties: A well drafted set of policies and procedures will mean little if there is no follow-up in terms of training company officers (including directors) and, where appropriate, refresher training.

Justice French, ASIC v Chemeq Ltd [2006] FCA 936

The Visy Trade Practices Compliance Manual might have been written in Sanskrit for all the notice anybody took of it.

Justice Heerey, ACCC v Visy Ltd [2007] FCA 1617 at [319]

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