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ACCC Report on the Debt Collection Industry

Tuesday, May 26, 2015 - Posted by Philip Harvey

Last month we indicated that the debt collection industry was being reviewed by the ACCC. You can read our blog post here.

Some of the research reports key findings include:

  • Technology and scale have improved compliance.
  • Issues with debt collection vary by sectors with a clear distinction between credit regulated and non-credit regulated.
  • The energy sector faces a unique challenge in the face of rising energy costs.
  • Debt collection practices that add additional charges may result in detriment for consumers in financial distress. These charges may be misleading if not supported by contracts.
  • Increased oversight has led to an improvement in debt collection behaviour.
  • Credit repair business are often increasing costs for debtors with problems.

The report has interesting insights to the credit repair industry, with  all stakeholders (industry, regulators, ombudsmen, retailers and consumer advocates) noting the negative impact credit repair activities have on consumers, the EDR process and the credit reporting system.  An extract from the COSL / CIO 2014 annual report was taken which provided an example of a consumer being charged an upfront fee of $900 and then $1000 per default listing removed where the credit default was for $500.

We would encourage everyone involved in the industry to go over this report. It may provide you with insights in other areas of interest to you.

You can read the full ACCC report here or download a copy by clicking this link.

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