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Change Ahead for NSW Debt Collection Industry Licensing

Thursday, September 29, 2016 - Posted by Michael McCulloch

In 2014 you may recall that the NSW Legislative Assembly conducted an enquiry into debt recovery in New South Wales.

The Institute of Mercantile Agents ("IMA"), of which LCollect are members of, wrote to their members in late August 2016 advising of the outcome of the enquiry. This communication has been re-produced below:

The 2 recommendations put forward at the time were:

Members will recall two recommendations specific to the issue of our industry’s licensing from the NSW Legislative Assembly’s Legal Affair Committee 2014 Inquiry into Debt Recovery in New South Wales were:


Recommendation 1
The Committee recommends that the NSW Government introduce negative licensing for Commercial Agents who have no face-to-face contact with debtors, while positive licensing is retained for field agents.


Recommendation 2
The Committee recommends that responsibility for the oversight and licensing of Commercial Agents and Private Inquiry Agents be transferred from the Security and Licensing Directorate of the NSW Police Force to Fair Trading NSW.


On 4 August 2016, the NSW Government introduced the Security Industry Amendment (Private Investigators) Bill 2016 [the Bill] which was passed without amendment in the Legislative Assembly and Legislative Council on 10 August 2016.


This Bill in part deals with Recommendation 2 by removing the regulation of Private Investigators from its historic grouping under the NSW Commercial Agents & Private Inquiry Agents Act, 2004 [the CAPI Act] and instead providing for private investigators to be licensed under the NSW Security Industry Act 1997 [the SIA].


The Bill provides for amendments to the SIA to:

  • Introduce a new class of licence to act as a private investigator

  • Provide a definition for a private investigator “as a person who is employed or engaged to investigate the business or personal affairs of a person or to carry out surveillance of a person”

  • Set out provisions to transition those currently licensed under the CAPI Act to those persons being licensed under the SIA

  • Make consequential amendments to the CAPI Act to remove references to private inquiry agents

  • Make consequential amendments to other acts to reference the changed regulatory instruments


The NSW Minister for Justice and Police Troy Grant in his reading of the Bill indicated:

  • The Bill provides certainty to the industry and community by Private Investigators continuing to be regulated effectively and in a way that reflects the risks and sensitive scenarios licensees regularly are engaged in

  • The type of work undertaken carries privacy and integrity risks that mean it is appropriate for the Government to continue to closely regulate the industry – such risks include illegal access to confidential information, breaches of confidence, misrepresentation, impersonation, trespass, harassment and inappropriate use of surveillance equipment

  • Police receive complaints in relation to alleged fraud, harassment and unethical conduct

  • By regulating Private Investigators alongside the security industry, NSW will join with most other Australian jurisdictions which already implement a similar approach - national consistency also known as harmonisation in licensing and regulation is important for the industry and this Bill represents a step forward by NSW in this regard

  • The licensing approach to security activities under the SIA is similar to the existing Master Licenses or Operator Licences that are currently required for Private Inquiry Agents under the CAPI Act

  • Under the Bill;

    • A Master Licence will still be required for a person to run a business as a private investigator

    • A new technical class of licence under the SIA will be created, being a class 2E licence for a person to undertake work as a Commercial Private Investigator

    • The holder of a Commercial Private Investigator licence must be employed by a Master Licence holder unless they hold an individual Master Licence of their own

  • Applicants will still need to make an application through the Police if they wished to become a Licensed Private Investigator – similar requirements will continue to apply for age, criminal history and competency – license fees will also be applicable and will be generally comparable to similar licence fees now under the CAPI Act

  • Additional benefits that will flow as a consequence of transferring private investigators to the different regulatory scheme include:

    • Private Investigation activity will now be subject to the offence and penalty regime of the SIA

    • Many of those offences are similar to those under the CAPI Act

    • However an offence that will now apply under the SIA is the offence of misrepresentation – directly addressing false or misleading activity relating to the engagement of security activities – applying this offence to the industry is intended to strengthen the integrity of the industry

    • Probationary licences for Private Investigators will now be abolished in line with the similar change for all other security licences in 2011

  • The Bill is the first stage of the Government's move to transfer the regulation of the commercial agency industry also regulated under the CAPI Act to the Office of Fair Trading - the NSW Government has decided the regulation of private investigators should remain with the NSW Police Force due to the higher risk profile of Private Investigators whilst the regulation of Commercial Agents (considered to have a lower risk profile) would be better placed in the fair trading portfolio, which already handles complaints about collectors and breaches of consumer laws

  • The NSW Government intends to bring forward a further standalone bill to regulate Commercial Agents and to repeal the CAPI Act

  • The Government's intention is that the Bill and the future bill for Commercial Agents will commence at the same time and for that reason, the Bill will commence on a date to be proclaimed.


As soon as confirmation is received of the Bill being passed we will provide an update via our blog and continue with our strict compliance program to ensure that when you deal with LCollect that you confident you are dealing with an organisation that follows all appropriate licencing regulations in the debt collection industry.


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