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Debt Collection News

Released every month our debt collection blog contains news, stories and tips to keep you informed.

UK Debtors Granted 60 Day Payment Extensions

Friday, June 28, 2019 - Posted by Michael McCulloch

Debtors in the UK are to benefit from a new scheme where they will be provided 60 days grace from debt collectors and Bailiffs.

In an article that appeared in The Sun, people who are struggling with significant debt to local government bodies, such as tax arrears, personal tax debts and benefit overpayments, will have their debts frozen with all enforcement action also stopped. The scheme, which is due to be launched in 2021, is designed to provide the financially disadvantaged with time to find long-term solutions to their financial problems. During the "breathing space" period, which is what the scheme is being called, those debtors must work with professional financial counsellors to reach solutions to get back on track with their repayments.

The "breathing space" program also includes a "statutory debt repayment plan" which allows those in debt to repay debt over a more manageable period and could see monthly repayments adjust according to their disposable income.

Debt charity, StepChange, revealed in April of this year that 657,000 people had sought their assistance in 2018 and applauded the moves by HM Treasury.

Debt Collection Agency Files for Bankruptcy Protection

Friday, June 28, 2019 - Posted by Michael McCulloch

ZDNET is reporting that the debt collection agency, American Medical Collection Agency (AMCA), has filed for bankruptcy protection following a major data breach.

The breach, which is estimated to have occured from August 2018 to March 2019, resulted in the theft of information from corporate clients which included Sunrise Laboratories, BioReference Laboratories, LabCorp and Quest Diagnostics. The companies used a portal provided by AMCA to bill their medical customers which was later found to have been stolen and advertised for sale in dark web forums.

Following the disclosure of the breach multiple class-actions werre filed against not only AMCA but also the corporate clients with victims claiming that there were unnecessary delays in informing victims. According to the Chapter 11 declaration that was filed, AMCA first became aware of the breach when a number of credit cards were linked to fraudulent transactions. While the portal was closed and an investigation launched, the data breach caused AMCA to lose a number of clients and a massive reduction in business. ACMA has since been unable to determine exactly what data has been compromised and has been forced to absorb the cost in informing several million people by mail that their data may have been stolen. It is estimated that this alone has cost ACMA US$3.8 million forcing AMCA to take out a loan just to meet this expense.

AMCA will continue trading at this point in time as they seek to pay off their Creditors.

Man Arrested for Threatening Debt Collection Staff

Friday, June 28, 2019 - Posted by Michael McCulloch

A Thirroul man who threatened harm to debt collectors has been put on a 2 year good-behaviour bond and fined $500. The man, who has been identified by the Illawarra Mercury as Daniel Scott, claimed to police that he thought the calls were from scammers however admitted that his response was an overreaction.

Evidence presented to the Court said that Mr Scott threatened a debt collection agency and their employees after they were pursuing Mr Scott for money owing from a motor vehicle accident in 2018. It was alleged that the debt collection agency had been attempting to contact Mr Scott with no success so began utilising an automated dialler system which is designed to regularly dial people who have an outstanding debt.

The Court was told that Mr Scott left an "irate and aggressive" message after receiving a call on 20/02 where he threatened to blow up the debt collection office and harm staff. Another message left by Mr Scott an hour later, where he attempted to disguise his voice, made more specific threats to bombing buildings in Bankstown, Melbourne and Adelaide. The threats were reported to police out of fear for the safety of staff.

Mr Scott was arrested by police in April 2019 with 2 counts of using a carriage service to threaten serious harm to which Mr Scott pleaded guilty. Mr Scott said, "I thought if I pretended to be a crazy person they would take me off the list."

Magistrate Michael Stoddart said in his remarks to Mr Scott, "If there was anything else on your record like this I'd be imposing a jail sentence today."

AFCA Averaging 5900 Complaints Per Month

Friday, June 28, 2019 - Posted by Michael McCulloch

The Australian Financial Complaints Authority (AFCA) has recently released a snapshot of statistics following their first 5 months of operation.

The release of these statistics follows an article, 'Appalling Treatment': Bank Customers Making 5,900 Complaints a Month in the Sydney Morning Herald where the Chair of AFCA, Helen Coonan said in a speech allegedly seen by The Sydney Morning Herald and The Age, "Poor culture in financial institutions has been identified as the main culprit that permitted a slew of bad practices, appalling treatment of consumers and small businesses, and in many cases arrogant indifference to regulatory and compliance risk. Now almost seven months old, AFCA is playing an important part in restoring shattered community trust and confidence in the financial services sector."

The statistics show that between 01/11/0218 and 31/03/2019 AFCA -

  • Received 29,873 complaints (closing 55% as of 31/03)
  • Awarded $67 million in compensation
  • Identified 81 system issues that are still currently under investigation
  • Attended and / or held 138 events and meetings across the ACT, NSW, QLD, SA, VIC and WA
  • Received more than 61,237 phone calls; and
  • Had 568,933 visits to their website

Both credit reporting and responsible lending topped the most complained about issues for credit providers (1,935 and 1,198 complaints) with 45% of complaints relating to credit related products. 1,142 complaints were received about debt collectors or buyers however the nature of these complaints were not disclosed.

Download a copy of the full released statistics at Snapshot of AFCA's first five months.

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