How To Deal With Debt Collectors In Australia | Know Your Rights
What debt collectors can and can’t do, and what you can do if they break the rules
Prevent debt collectors from harassing you and acting unlawfully. How to handle debt collectors without repaying immediately
If you have outstanding debt from a bank, company or other lending agency that is long-term and/or large in size, you may have to deal with a debt collector. Debt collectors use all tactics within the legal limits and often many beyond them to try to make you repay your debts. They are under pressure to get results, so are all too often overly pushy and high-pressure. Sometimes their practice oversteps the line into harassment. Because of the nature of the practice, the Australian Competition and Consumer Commission (ACCC) has established several laws that protect you, and if a debt collector breaks these laws, you can take legal action against them.
What Is A Debt Collector? | Debt Repayments Perth
How does debt collection work?
A debt collector is a licensed serviceman who is hired by an agency such as a bank, corporation or other credit institution to retrieve debts from outstanding debtors.
Debt collection works whereby the organisation hires the debt collector to collect the debt for them. As in all work, there is some motivation to complete the job, either monetary or in job security, so the debt collector may seem anxious, determined, even adamant that they collect your debt.
Alternatively, the debt collector may have purchased your debt from your original creditor. In this case, collecting your debt is their personal financial responsibility, so they will be eager to retrieve it.
The key thing to understand with debt collectors is that this is their job, and it’s a strenuous job. This kind of understanding can in some cases improve your relationship with your debt collector.
How Do Debt Collector’s Work? What Do They Do To Retrieve Debt?
What methods and practices do debt collectors use? what can debt collectors do?
Debt collectors are allowed to take the following steps to extract debt from you. The following debt collection methods are not illegal, so you should expect your debt collector to use them on you:
Contact you in person, through phone or in writing.
Ask questions to understand why you havn’t paid your debts.
Ask you why you have failed to respond if they have contacted you without reply.
Describe the actions they legally can take if you refuse to pay your debt.
Request payment for a debt—if it is past its due date.
Plan and modify arrangements with them and the creditor.
Organise a settlement offer with you that may make it easier to pay off the debt.
Sell your debt to another company who will have the same arrangements and powers as the original creditor.
Obtain an order from a court to repossess some of your property.
Take court action against you.
What Are Debt Collectors Legally Allowed To Do?
What can’t debt collectors do? what are the limitations of debt collectors?
Debt collectors have the following basic, very essential limitations that you must be aware of. If they violate any of these, you almost certainly have a court case against them:
Confiscate or sell any of your property without a court order to do so.
Refuse to leave your property when you ask them to leave.
Pretend to be a person of another role besides a debt collector.
Give misinformation about how much you owe or their rights and restrictions.
Obtain a court order to send you to prison, unless you have broken laws during the debt collection process. (you can’t be sent to prison for debt but you can be sent to prison for violent conduct over the issue of debt.)
Threaten, harass or physically intimidate you or be verbally obscene or insulting. this is illegal per se and no person or organisation is legally allowed to do this to you.
Your six basic rights against debt collectors
Australian citizens have six rights against debt collectors that are based on basic human needs and values. If any of these broad rights are violated, you have a viable case for the ACCC if not the court of law. You have the right to:
Live in peace and quiet.
Request for the debt collector to cease all contact.
Demand that the debt collector prove your debt
Be treated with courtesy and respect.
To pay your debts in the manner that suits you best.
To sue your debt collector in court for violating any of your rights.
Debt Collector Restrictions On Contact
The ACCC lays out very strict and restricted laws on when debt collectors are allowed to contact you. This includes phone calls and in-person visits. These are the conditions under which a debt collector is allowed to contact you (otherwise it is illegal).
When it is necessary and reasonable to do so. this includes when making demands for payments, making arrangements for repayment, asking why an agreed payment hasn’t been made, reviewing a repayment plan after an agreed period of time and managing mortgaged goods if they have a court order to do so.
Max three phone calls or letters per week. max 10 per month.
Phone calls only between 7:30am–9:00pm on weekdays and 9:00am–9:00pm on weekends
In-person contact only between 9:00am–9:00pm on weekdays and weekends
No contact on national public holidays
Protecting Your Rights As A Debtor | Financial Security Brisbane
You have a right to be left in peace by a debt collector outside of those strict allowable bounds designated by the ACCC. To make sure that you are not exploited, you should write down every time a debt collector contacts you. If they overstep their limitations, you should notify them of your full intentions to take them to court. If they continue to break the law, you should take them to court.
After reading this article, it is our hope that as a debtor you feel empowered. The ACCC’s laws protecting debtors are intended to make you feel this way, to balance the enormous power imbalance that exists between large lending corporations and debtors. The biggest tragedy is when people aren’t aware of their rights and still get exploited however, so after reading this article, hopefully you will ensure that that wont happen to you.