Debt collection guideline: for collectors and creditors

24. The role of independent external dispute resolution schemes

  1. Many industries (including telecommunications companies, utility suppliers and financial services businesses) belong to an independent external dispute resolution (EDR) scheme.81 Specialist collection and debt purchasing agencies, and other finance providers, may also decide to join a scheme. As already outlined in this guideline, belonging to an EDR scheme is a legal requirement for many creditors.
  2. The ACCC and ASIC support the role played by EDR schemes in resolving consumer complaints and disputes when these are unable to be resolved through the creditor or debt collector’s internal dispute resolution processes.
  3. You should ensure that your systems and practices allow EDR in the debt collection area to work effectively, in particular:
    • when applicable, you must advise debtors of an EDR scheme to which the debtor can take his or her unresolved dispute—ensuring this information is provided to debtors at the appropriate time is a requirement imposed on EDR scheme members, and may be stipulated under relevant laws or codes
    • collection activity relating to a dispute that has been referred to an EDR scheme must be suspended while the scheme considers the dispute—again, this is a requirement imposed on scheme members (including their agents)
    • a debt should not be sold, or passed to an external agent for collection, while a scheme is considering a dispute in relation to it
    • if a debt is inadvertently sold, the assignor/creditor should seek to retrieve the debt from the assignee, and seek to ensure that the assignee does not undertake collection activity or start legal proceedings until the scheme has resolved the dispute (and then only if liability is confirmed).
  4. Note that you may remain subject to the jurisdiction of an EDR scheme for a debt matter even though the creditor has sold or assigned the debt in question. This is likely to be the case when the complaint relates to the period before the sale or assignment of the debt.
  5. The ACCC and ASIC encourage EDR schemes to consider this guideline when determining how the consumer protection laws should be applied to particular debt collection-related matters.

81 For a list of relevant dispute resolution schemes, refer to appendix A. Also see AER factsheet What can I do if I have a complaint? and Making a complaint.