Debt collection guideline: for collectors and creditors

Enforcement and remedies for breaching Commonwealth consumer protection laws

Infringement notices

ASIC or the ACCC may issue an infringement notice95 where there are reasonable grounds to believe that there has been a contravention of the ASIC Act and the ACL, such as those dealing with false or misleading representations, harassment or coercion and unconscionable conduct. Infringement notices can also be issued for certain unfair practices and offences under the NCCP.

Under the ACL and the ASIC Act, the infringement notice penalties for the more common contraventions are $12 600 for a corporation and $2520 for an individual. The penalty for a publicly listed corporation under the CCA for the more common contraventions of the ACL is $126 000.

Penalties

A debt collector or creditor who is found to have breached the harassment and coercion provisions or false or misleading representations or unconscionable conduct provisions96 is liable to penalties of up to:

  • $220 000 under the ACL or $340 000 under the ASIC Act (in the case of individuals)
  • $1 100 000 under the ACL or $1 700 000 under the ASIC Act (in the case of corporations).97

Certain defences may apply regarding these breaches.98

CASE STUDY

In April 2013, the Federal Court found that Excite Mobile Pty Ltd engaged in false and misleading and unconscionable conduct in its provision of mobile services to customers.

The court also found Excite Mobile acted unconscionably and used undue coercion when attempting to obtain payment for mobile services. Excite Mobile’s directors were both found to have been directly knowingly concerned in Excite Mobile’s contraventions.

A large number of consumers across all parts of Australia were affected by Excite Mobile’s conduct, including consumers living in Indigenous communities on the Cape York Peninsula, remote areas in Queensland and Western Australia, and throughout the Northern Territory.

On 29 November 2013, the Federal Court ordered Excite Mobile pay penalties of $555 000 and its two directors $55 000 and $45 000. The court disqualified the directors from managing a corporation for a period of three years and two and a half years respectively.

An employee who was involved in the conduct was also ordered to pay a penalty of $3500.

ACCC v Excite Mobile Pty Ltd [2013] FCA 350

Other civil orders

ASIC or the ACCC can apply to the court for civil orders against a debt collector or creditor, including:

  • injunctions against future conduct99
  • non-punitive orders (including corrective advertising)100
  • compensation orders.

ASIC or the ACCC can also apply for other sanctions including adverse publicity orders.101

Damages or injunction

Finally, a debtor or third party who suffers loss or damage as a result of a collector’s breach of the unconscionable conduct102, misleading or deceptive conduct103, harassment and coercion104, or other provisions of the ASIC Act and the CCA, can recover the amount of their loss by an action for damages under these Acts.105 A debtor or third party can also seek injunctive relief.106


95 Section 12GXA of the ASIC Act; s. 134A of the CCA.

96 Sections 12DJ, 12DB and 12CB of the ASIC Act respectively; ss. 50, 29 and 21 of the ACL respectively.

97 Section 12GBA of the ASIC Act and s. 224 of the ACL.

98 Section 12GI(5), ASIC Act; s. 226(a) of the ACL.

99 Section 12GD, ASIC Act; s. 232 of the ACL.

100 Section 12GLA, ASIC Act; s. 246 of the ACL.

101 Section 12GLB, ASIC Act; s. 247 of the ACL.

102 Sections 12CA–CC, ASIC Act; ss. 20-22 of the ACL.

103 Section 12DA, ASIC Act; s. 18 of the ACL.

104 Section 12DJ of the ASIC Act; s. 50 of the ACL

105 Section 12GF, ASIC Act; ss. 236, 237, 239(1) and s. 243 of the ACL.

106 Section 12GD, ASIC Act; s. 232 of the ACL.

Tags

Audience