Debt Collection in Australia: Everything You Need to Know

Debt Collection in Australia- Everything You Need to Know

Borrowers are legally bound to pay the money they owe to creditors.

Debt Collection in Australia is governed both by the Australian Securities and Exchange Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). The approach to debt collection in Australia, based on the guidelines set by both of these agencies, is to have a flexible, fair and realistic approach to debt collection.  The agencies want to strike a balance between the responsibilities of both the debtors and the creditors.

Since borrowing money is an agreement between two parties, it is necessary to have separate but unifying guidelines for both borrowers and collectors and creditors.


Guidelines for Collectors and Creditors

These are prescribed rules that are applicable to both creditors who collect debt directly and to external credit collection agencies tasked with giving debt collection services for their clients.

  1. When contacting a debtor, it must always be for a necessary and reasonable purpose such as any of the following:
    • Making arrangements for debt repayment
    • Reviewing existing arrangement after an agreed-upon period of time
    • Providing information to the debtor about their account
    • Offering to work with the borrower in order to reach a repayment arrangement that is flexible and plausible
    • Demanding for payment
    • Explaining the consequences of non-payment in an accurate manner. This includes legal remedies and service disconnections.
    • Offering a settlement proposal or alternative payment method to the borrower
    • Ascertaining why certain attempts to contact the borrower were not responded to
    • Investigating debtor’s change of location
  2. Here are non-reasonable situations to contact a debtor:
    • Contacting them with the intention of frightening or intimidating
    • To embarrass in front of other people
    • To demoralise or exhaust the debtor
  3. There are explicitly-stated prohibitions and remedies against collectors who use the following methods to make their borrowers pay:
    • Physical force (including harassment and coercion)
    • Misleading or deceptive conduct
    • Taking unfair advantage of vulnerability or disability
  4. Hours of Contact
    Contacting a borrower should be made within reasonable hours.

    Telephone Monday – Friday


    *No contact recommended on National Public Holidays

    7:30 AM – 9:00 PM

    9:00 AM – 9:00 PM

    Face-to-Face Monday – Friday


    *No contact recommended on National Public Holidays

    9:00 AM – 9:00 PM
    Workplace Debtor’s normal working hours, if known


    There may be other circumstances when calling during the times specified above may still be deemed unreasonable.  These may be due to the following specific reasons:

    • The borrower works in shifts
    • The borrower is responsible for the care of small children or a family member who is ill.
    • The borrower specifically requested that he or she doesn’t wish to be contacted when other family members are present.
  5. Frequency of Contact – Debt collectors should not have excessive communication with debtors. Frequency of contact refers to the number of contact per account, not the individual debtor. Collectors should, as much as possible, contact a debtor to discuss multiple accounts in order to avoid excessive contact.Frequent contact with the debtor constitutes undue harassment or coercion on the part of the debt collector. This occurs if the collector makes phone calls in rapid succession.


Guidelines for Debtors or Borrowers

We all know that borrowers have the responsibility to pay the debts that they owe. Here are important guidelines for borrowers to remember:

  1. Borrowers experiencing financial difficulties should be candid about their situation. They can make payment negotiations through the help of a certified financial counsellor to assist them with debt negotiation.
  2. Borrowers should immediately inform creditors when they are experiencing financial hardship and try to make a variation in payment.
  3. Borrowers should not attempt to avoid the obligation.
  4. Here are some things that debtors can do in order to get back on track with their payment responsibilities:
    • Contact your credit provider and explain your situation. Discuss a repayment plan straightaway.  It is best to be realistic about what you can pay and to be honest about the situation.
    • Apply for a hardship variation. This way, you can still keep paying your obligation with what you can afford.
    • You can also talk to a certified financial counsellor or get free legal assistance.
  5. If the conduct of the debt collector is unbecoming or threats of violence are received, this should be reported to the police.

If you think that your debt collector has breached privacy laws by divulging your personal information, contact the Office of the Privacy Commissioner.

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