9. When a debtor is represented
- A debtor has a right to have an authorised representative (such as a financial counsellor, financial advisor, community worker, solicitor, guardian or carer) represent them or advocate on their behalf about a debt.
- Except in the circumstances outlined in paragraph (d) and (e) of this section, you should not:
- contact a debtor directly after you know, or should know, that the debtor is represented
- refuse to deal with an appointed or authorised representative, whether by direct refusal or by placing unnecessary obstacles in the way of the authorised representative, for example, by insisting on a particular style or form of authorisation when the written authority provided already includes the necessary information.
Example: Contacting a represented debtor
If a debtor instructs you not to contact them, and provides you with contact details of a specified third party who has been authorised to act on their behalf, then you should not contact the debtor and future contact should be through the authorised representative.
- In general, any form of authority consistent with the requirements of the Privacy Act should be regarded as acceptable. We recommend that:
- a verbal authorisation given by a debtor in circumstances where it is recorded (a file note of a conversation would suffice), is acceptable for the purpose of allowing a third party representative to represent them or advocate on their behalf about a debt
- a written authorisation to be represented35 include as many of the following details as is reasonably possible:
- full name, date of birth and residential address of the debtor
- the name of the creditor, account/contract identity details for which the authorisation is provided
- full name, address and contact details (telephone or email) of the authorised third party, individual representative or agency
- the basis of the authorisation provided—whether the authorisation is ongoing or whether strictly limited to a specific purpose or timeframe.
- You are entitled to contact a debtor directly if:
- the debtor specifically requests direct communication with you
- the representative does not consent to represent the debtor in relation to the debt
- the representative advises you that they do not have instructions to represent the debtor in relation to the debt
- the representative does not respond to your communications within a reasonable time (normally seven days) and you advise the representative in writing after the reasonable time has passed that if they do not respond within the next seven days, you will make direct contact with the debtor
- you advised the debtor that you require a written authority which states that you are only to communicate through the debtor’s representative, and the debtor or representative fails to provide you with that written authority within a reasonable time (normally seven days). Note that this does not apply where the debtor’s representative is a solicitor. When an authorised representative does not agree to have written correspondence redirected to the representative, such correspondence should continue to be sent directly to the debtor.
- You may also be entitled to contact a debtor directly where more than one of the following applies (except where the representative is a financial counsellor36, a qualified legal practitioner in the relevant state or territory, or a qualified accountant37):
- the representative is acting in a manner or making decisions which increase or are likely to increase the debtor’s liabilities
- the representative may be charging the debtor a fee for services that can be readily accessed free of charge
- the representative may be receiving payment from the debtor for the negotiation of a debt settlement
- you reasonably believe that the representative is not informing the debtor of all available options, offers of settlement, offers of hardship assistance or other creditor proposals38
- you reasonably believe that the representative is engaging in a deceptive or misleading manner in engagement with either or both the creditor or the debtor
- you reasonably believe that the debtor has not been informed of the potential risks and consequences of a course of action the representative is pursuing
- you reasonably believe that the representative is acting against the debtor’s best interests.39
- In the circumstances described in (e) above, upon contacting a debtor directly despite representation, you should explain to the debtor why you are making direct contact and provide the debtor with reasonable time to consider the information you provided and, if necessary, make alternative arrangements. Should the debtor confirm an intention to retain their authorised representative you should cease further direct contact with that debtor.
- You should maintain records of all communications and attempted contacts with the debtor’s representatives.
- If the debt is assigned, contact details of the authorised representative should be provided to the assignee and the assignee should avoid contacting the debtor directly (subject to paragraph (d) and (e) above. Also see part 2, section 11, Providing information and documents.)
35 See Appendix D: Authority Form from Financial Counselling Australia, for an example of a form of written authority developed by the Australian Bankers’ Association and Financial Counselling Australia.
36 See r. 20(5) of the NCCP Regulations.
37Certified by one of the three Australian peak bodies: the Institute of Chartered Accountants, Certified Practising Accountants Australia and the Institute of Public Accountants.
38 For example, because the representative’s response appears to lack due consideration, or is aggressive or threatening.
39 For example, based on the representative’s previous conduct when representing this or other debtors.