The Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) today issued two jointly produced publications, aimed at improving standards in the debt collection industry and assisting consumers dealing with debts and debt collection. These are the Debt collection guideline: for collectors and creditors and, for consumers, Debt Collection: your rights and responsibilities.
The publications were launched at the national conference of the Australian Institute of Credit Management on the Gold Coast.
"Many thousands of debts are collected each year in Australia, in most cases, lawfully. But unfortunately, on some occasions debt collectors go beyond what is reasonable and mislead, harass or act abusively towards consumers," ASIC Commissioner, Professor Berna Collier said.
"Debt collection activity continues to be a source of complaints to the ACCC and to ASIC," ACCC Deputy Chair, Ms Louise Sylvan, said. "We are committed to ensuring compliance with the law."
"The new guideline has been developed in consultation with industry and consumer representatives to provide useful guidance on appropriate conduct to anyone involved in debt collection," Professor Collier said. "It will help the industry to understand and operate within the law.
"By observing the recommendations in this guideline, ASIC and the ACCC hope to see a lifting of standards in the debt collection industry," said Professor Collier.
The consumer brochure, Debt collection: your rights and responsibilities, has also been produced in conjunction with the guideline to help people who are currently dealing with debt problems, or being contacted by debt collectors.
"It is important for consumers to recognise that they must repay the debts they owe. This brochure contains practical advice and tips about what to do in potentially stressful situations that can occur when handling debts," Ms Sylvan said.
"Both the guideline and the consumer brochure stress that contact between a debt collector and a consumer must be necessary, and for a reasonable purpose. We have provided specific recommendations on the appropriate frequency of face-to-face, telephone and other contact, as well guidance regarding the appropriate location of face-to-face contact.
"Both publications will also help financial counsellors and other advisers who assist consumers with debt queries or problems," Ms Sylvan said.
"ASIC and the ACCC are committed to ensuring that the industry operates professionally and efficiently, and that consumers who find themselves in a difficult position financially can be confident they will be dealt with fairly and lawfully," Professor Collier said.
"However, we will consider enforcement action against anyone who uses physical force, harassment or coercion, or engages in misleading or deceptive conduct or unconscionable conduct when collecting debts," Ms Sylvan said.
A debt collector who breaches the harassment and coercion provisions of the Commonwealth consumer protection laws risks fines of up to $220,000 for individuals or $1.1 million for a corporation. Similar fines are risked if a collector is convicted of knowingly making false or misleading representations (criminal prosecution).
Apart from criminal sanctions, ASIC or the ACCC can seek civil court orders against a collector, including injunctions against future conduct and non-punitive orders, such as corrective advertising.
Someone who has suffered loss or damage from a collector's action may be able to recover their losses in certain circumstances.
Free copies of both the Debt collection guideline: for collectors and creditors and Debt Collection: your rights and responsibilities are available on the ACCC website, or the ASIC website, at www.asic.gov.au. Free copies are also available by calling the ACCC Infocentre on 1300 302 502, or ASIC's Infoline on 1300 300 630.