Owing money in general sucks but owing money to a debt collector can be a nightmare.
The text messages, phone calls, letters, demands for unrealistic amounts… it can take a huge psychological toll if you’re already feeling anxious about the debt.
While most debt collectors are prudent in their dealings and follow the relevant laws and procedures, there can sometimes be situations where things don’t always go as they should.
Knowing the difference between lawful and unlawful conduct may come in handy when trying to negotiate with your creditors.
Here’s a list of things that debt collectors aren’t allowed to do, meaning, these practices are against the law.
1) Force, trespass or intimidate
A debt collector shouldn’t:
- Use or threaten physical force of any kind towards you, a member of your family or people otherwise connected with you
- Damage or threaten to damage your property
- Block access to your property
- Remain on your property after you’ve asked them to leave (unless they have a Court Order)
If a debt collector engages in any of these behaviours, you should immediately call the police for assistance.
2) Harassment, verbal abuse or overbearing behaviour
A debt collector shouldn’t:
- Shout at or verbally abuse you, this includes making personal or demeaning comments
- Use obscene or discriminatory language
- Disclose information about your debt to other people, without your consent
- Contact you by a method you’ve asked them not to use, unless there’s no alternative method available
- Contact you more than necessary or at unreasonable times
As a general guide, if contact is necessary, it should be limited to the following, unless you request or agree otherwise:
- A maximum of three phone calls or letters per week or 10 per month
- Phone contact should only occur between the hours of 7:30am–9:00pm on weekdays and 9:00am–9:00pm on weekends
- Face-to-face contact should only occur between the hours of 9:00am–9:00pm on weekdays and weekends
- No contact should occur on national public holidays
3) False or misleading statements or deceptive conduct
A debt collector shouldn’t:
- Make false statements about the amount you owe
- Make false statements about what will happen if the debt isn’t paid or what they intend to do (for example; threatening to repossess your car when they have no legal ability to do so)
- Send letters demanding payment that are designed to look like court documents (for example; send you a summons that hasn’t been issued by a court)
- Pretend to be (or to act for) a solicitor, court or government body
4) Unfair and unconscionable conduct
A debt collector shouldn’t take advantage of you:
- If you’re disadvantaged due to illness, disability, age, illiteracy or other circumstances
- If you’re not familiar with the law, debt recovery processes, or the consequences of not paying a debt
Face-to-face visits
There’s generally no need for a debt collector to visit you in person if a repayment plan can be made over the phone, by letter or email.
If you haven’t responded to contact by a debt collector or if your location or identify is uncertain, it may then be necessary for a debt collector to visit you in person. If face-to-face contact is necessary, the debt collector should visit you at home during reasonable times and visiting your work place should be their last resort.
Rules on face-to-face visits
If a debt collector does visit you in person, they must:
- Leave immediately if you ask them to
- Treat your family and any third parties with courtesy and respect
- Respect your right to privacy in front of family members and third parties
- Not stay near your home for an extended period or engage in any other conduct that suggests your house is under surveillance
- Not suggest or imply that any third party is liable for the debt if such a statement is untrue
- Not talk to a child under the age of 18 regarding the debt unless you allow this or the child is willing and able to act as a translator or intermediary
- Not embarrass or distress you or any third party
Protecting your privacy
Even if you owe an amount to a debt collector, you’re still entitled to privacy. Debt collectors must protect your personal information and the personal information of third parties. Contact the Office of the Privacy Commissioner if you believe that a debt collector or creditor has breached privacy laws.
Keep a record of any contact
Make sure you keep accurate, complete and up-to-date records of all communication you have with a debt collector.
Complaining about a debt collector
If you‘re being harassed or intimidated by a debt collector, you should make a formal complaint to the collector in writing.
If this doesn’t fix the problem, you should make a complaint to the relevant external dispute resolution scheme.
Exploring your options
If you’re struggling with debt and don’t know what to do, it might be time to start exploring your options.
If you’re looking at a formal option like Bankruptcy, it’s important to speak with experienced and registered professionals, like a Bankruptcy Trustee. That way, you’ll be able to make informed decisions about how to deal with your debt.
