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It is common in the debt collection industry a debtor to elect to authorise a 3rd party to act on their behalf.
Regulatory Guide RG96 Debt Collection Guidelines give the right to the debtor to authorise a 3rd party to represent them or advocate on their behalf about the debt.
What happens however when this 3rd party does not consent, won't respond or does not have instructions from the debtor?
RG96 is very specific about when you are entitled to contact a debtor which we have supplied as an extract below:
(d) You are entitled to contact a debtor directly if:
- The debtor specifically requests direct communication with you
- The representative does not consent to represent the debtor in relation to the debt
- The representative advises you that they do not have instructions to represent the debtor in relation to the debt
- The representative does not respond to your communications within a reasonable time (normally seven days) and you advise the representative in writing after the reasonable time has passed that if they do not respond within the next seven days, you will make direct contact with the debtor
- You advised the debtor that you require a written authority which states that you are only to communicate through the debtor’s representative, and the debtor or representative fails to provide you with that written authority within a reasonable time (normally seven days). Note that this does not apply where the debtor’s representative is a solicitor. When an authorised representative does not agree to have written correspondence redirected to the representative, such correspondence should continue to be sent directly to the debtor.
Other instances where contact can be made with a debtor directly where they have previously authorised a 3rd party include:
- The representative may be charging the debtor a fee for services that can be readily accessed free of charge
- The representative may be receiving payment from the debtor for the negotiation of a debt settlement
- You reasonably believe that the representative is not informing the debtor of all available options, offers of settlement, offers of hardship assistance or other creditor proposals
- You reasonably believe that the representative is engaging in a deceptive or misleading manner in engagement with either or both the creditor or the debtor
- You reasonably believe that the debtor has not been informed of the potential risks and
consequences of a course of action the representative is pursuing
- You reasonably believe that the representative is acting against the debtor’s best interests.
It is our recommendation that where you have elected to discontinue contact with an authorised 3rd party that not only is your intention confirmed to the 3rd party in writing, and a minimum 7 days allowed for a response, that when contact is made with the debtor that you clearly indicate as to why you are no longer communicating with their representative and ensure that any correspondence is documented for future reference.
Note: Please note that this article does not constitute legal advice. If in doubt you should seek your own proper, independent legal advice.