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Debt Collection News


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

When Can a Default Be Included in Your Credit Report

Friday, March 29, 2019 - Posted by Michael McCulloch

It's a question that is often asked and something that we have covered before in our article Recording Payment Defaults however is there a time-limit on when a credit provider can list a payment default?

The Office of the Australian Information Commissioner (OAIC) states in their Privacy Fact Sheet 35: When Can a Default Be Included in Your Credit Report -

Yes, a credit provider cannot wait more than 90 days after issuing you with the second notice to list the default.
If the credit provider does not disclose the default to a CRB within that 90 day period, it must send you another notice informing you of its intention to list the default. The credit provider must then wait at least another 14 days before disclosing the default to a CRB for inclusion in your consumer credit report.

You can find the answer to this question and more by visting the OAIC fact sheets page here.


Maintaining a Mail Log and Default Notices

Friday, March 29, 2019 - Posted by Michael McCulloch

You may take it for granted that when a Default Notice is issued that the customer receives the Notice however what would happen if legal action was commenced and the customer defended the action based on not having been issued with a Default Notice? Would you be able to prove service?

The ability to swear an Affidavit that meets the Courts requirements is paramount in having any such Defence struck-out with the Supreme Court repeatedly ruling that where service is effected by post several elements must be proven. These elements include:

  1. the envelope bearing the correct name and address of your customer;
  2. the envelope containing the relevant documents being served;
  3. the envelope bearing the correct cost of postage; and
  4. the envelope being placed in the post.
Having an accurate and up to date mail log that is maintained in a central location would assist in helping to prove a document has not only been issued but also posted. An affidavit at the time the notice was posted that covers the above points would be an alternative, albeit may not be practical.

For more information regarding the Courts requirements please speak with a qualified legal practitioner at Collection Law Partners.

Disclaimer: This article is general information only and does not constitute legal advice and is not intended to be relied on in any way.

Use & Access of Electoral Roll Data

Wednesday, February 27, 2019 - Posted by Michael McCulloch

It is being reported by the Sydney Morning Herald that electoral roll data of more than 16 million Australians is allegedly being used by buy now, pay later providers, betting agencies, marketing firms and debt collectors to identify individual consumers.

Data allegedly obtained from a data marketing company, Illion, allows companies such as Afterpay to match identities to addresses as it processes customers. The data is allegedly being accessed under recent changes to the Anti-Money Laundering and Counter-Terrorism Financing Act.

Historically, prior to changes to the way the electoral roll was accessed, the roll was being used by debtor collectors (among others), for the purpose of making enquiries to locate a debtor or verify that a debtor may be residing at an address prior to commencing further action. Changes to the laws prohibited the search of the electoral roll for this very purpose, specifically stating that information contained in the roll is protected information and that such protected information shall not be used for a commercial purpose.

The Australian Electoral Commission would not comment on whether use of the data by the companies involved was appropriate with enquiries being directed to Home Affairs.

In accordance with the Act, LCollect do not access electoral roll data for any commercial purpose and only monitor accounts on legally available search facilities complying with the requirements of the Privacy Act 1988 (Cth).


Federal Court Fines Debt Collection Agency $750K

Wednesday, January 30, 2019 - Posted by Michael McCulloch

You may recall in our August 2018 edition of Debt Collection News that we reported that the Federal Court found against a debt collection company acting for Telstra after proceedings were commenced by the Australian Competition and Consumer Commission (ACCC) and the Australian Securities & Investments Commission (ASIC).

It has now been revealed by Yahoo! Finance that the Federal Court has ordered the debt collection agency involved to pay $750,000 in penalties for intimidation and harassment of the 2 customers who collectively owed $8,920.

The debt collection agency involved in the proceedings was ruled last year to have violated Australian Consumer Law after the ACCC commenced legal action in June 2016 where it was alleged that the agency had contacted a stroke victim on more than 40 occasions demanding payment including 20 demands made by letter despite the customer indicating to the agency that he had difficulty in speaking and could only utter single words like "stroke", "no" and "speech" in an attempt to indicate that he was disabled and unable to communicate.

ACCC Commissioner, Sarah Court, said in a statement, ".... continued harassment and intimidation of a care facility resident who had difficulty speaking after suffering multiple strokes is one of the worst cases of unconscionable conduct we have seen in the debt collection sector .... conduct towards another consumer who was in difficult financial circumstances, which included giving false information and making empty threats of court action, was also particularly egregious."

Commissioner Court went on to say, "Unconscionable conduct such as harassment, intimidation and coercion of consumers is unacceptable to not only the ACCC and the court, but the wider community."

A spokeperson for Telstra distanced the company from the proceedings stating, “collection activity is being conducted on behalf of the new owner, not on Telstra’s behalf” and that the telco sells debt to a third party only as a last resort."


2019 Certificate of Currency - Professional Indemnity & Public Liability

Wednesday, January 30, 2019 - Posted by Michael McCulloch

LCollect hold and maintains Professional Indemnity and Public Liability insurances and are licensed in accordance with the Commercial Agents and Private Inquiry Agents Act 2004.

Issued by WHITE Insurance Brokerscopies of our policies can be downloaded for compliance purposes:

2019 Certificate of Currency - Professional Indemnity & Public Liability

2018 - 2023 Master License Certificate

You will need a program capable of reading Portable Document Format (PDF) such as Adobe Reader or Foxit Reader.

If you require any more information please contact us.


Service of Documents in NSW Extended

Wednesday, January 30, 2019 - Posted by Philip Harvey

Recent changes in NSW have extended the amount of to 7 working days for documents served by regular post (an increase from 4 working days). A working day is deemed to be a day that is not a weekend or a public holiday.

This change effects documents particular to NSW. It does not change Consumer Credit Notices (such as s88 default notices).

For example, some of the notices impacted include;

  • Mortgage Default Notices under the Real Property Act (NSW)
  • NSW Statement of Claim posted by the Local Court
  • NSW Examination Notices

This article is not intended to be and does not constitute legal advice. 


Federal Court Finds Against Debt Collection Agency

Thursday, August 30, 2018 - Posted by Michael McCulloch

A debt collection agency who act for Telstra has lost their case in the Federal Court following proceedings being commenced by the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC).

The proceedings, which commenced in June 2016, highlighted the pressure some agencies apply to collect payment including engaging in misleading, deceptive and unconscionable conduct in it's dealings with 2 particular customers.

The first customer, CT*, who was living in a care facility on a disability support pension, after having suffered 3 strokes, received in excess of 60 demands for payment for a debt of $5,770. The Court found that the agency knew of CT's condition, which left him with the inability to care for himself or readily speak, however called the care facility approximately 40 times and sent approximately 20 demand letters seeking payment. Several times CT was threatended with legal action despite the agency not having any plans to follow through with the threat.

In the other matter a single Victorian mother of three, who worked part time and received a Centrelink payment, was demanded to pay $3,150. It was alleged that the woman was told that legal proceedings would be commenced against her and that a payment default would be recorded. The woman in question promised a payment of 50% of the debt in an attempt to avoid legal proceedings, despite this payment leaving her unable to pay rent and meet her other day-to-day expenses.

The Judgment, which you can read online, also criticises the capitalised use of words in demand letters and the use of “the words 'could' and 'may' would reasonably be read in the light of the prominent heading to the pro forma letter, the terms of which strongly suggest that ACM intended shortly to commence legal proceedings .....".

In a statement to the media the ACCC said that they will be seeking Orders preventing agencies engaging in misleading, deceptive and unconscionable conduct and will be seeking for large fines to be imposed.

Source: itnews - July 2018

* Name noted as per the original Judgment


Victoria Plans Crackdown on Debt Collection Industry

Monday, July 30, 2018 - Posted by Michael McCulloch

The Labor party in Victoria has planned a crackdown on debt collection in Victoria if re-elected at the November State election.

news.com.au and radio 3AW 693 are reporting that organised crime groups will be the focus of a planned State Government crackdown on the debt collection industry with Police Minister, Lisa Neville, announcing earlier this month an overhaul of the regulations. In a statement to the media she said, "We'll clean up this industry, like we did with scrap metal - to tackle organised crime and crack down on rogue operators."

The Labor Government, if re-elected, would like to establish a dedicated commission and harsher penalties for those involved in unlicensed debt debt collection in Victoria and would work more closely with the police, Consumer Affairs Victoria and industry leaders to clean-up the industry.

Chief Executive of the Australian Collectors and Debt Buyers, Alan Harriers, said in response, "If they are that [sic] then it's up to Fair Trading to stop them as being illegal persons doing debt collection. I am unaware of any prosecutions against people in this regard. If they were actual proper debt buyers, they would hold an Australian credit licence that is issued by ASIC. It's a very highly regulated industry."

In Victoria there is not a legal requirement in which to hold a debt collection licence.


Attorney General Reviews Consumer Credit Reporting and Hardship

Thursday, June 28, 2018 - Posted by Michael McCulloch

The Attorney Generals Department has recently released a discussion paper regarding the relationship between consumer credit reporting and hardship.

The purpose of the paper is to examine whether hardship is currently treated adequately under the credit reporting provisions in Part IIIA of the Privacy Act, whether there are opportunities for reform and if so what reforms are appropriate.

The Attorney Generals Department did stress that the paper is not a general review of repayment history information in the consumer credit reporting system.

Source: Attorney General's Department - April 2018


Cash Converters Fined $650K For Breaching Guidelines

Thursday, June 28, 2018 - Posted by Michael McCulloch

Cash Converters has again found itself in the spotlight for all the wrong reasons with ASIC finding that the company failed to meet regulatory guidelines and breaching the ASIC and ACCC Debt Collection Guidelines.

An ASIC investigation found that the pay day lender routinely breached the frequency of contact guidelines of 3 times per week or less than 10 times a month -

5. Frequency of Contact
(c) Unnecessary or unduly frequent contacts may amount to undue harassment of a debtor. We recommend that you do not contact a debtor more than three times per week, or 10 times per month at most (when contact is actually made, as distinct from attempted contact) and only when it is necessary to do so. This recommendation does not apply to face-to-face contact which is specifically addressed below. 

The investigation also uncovered that a related company, Safrock Finance Corporation (QLD), was also found to have provided incorrect information to a credit reporting agency. The error resulted in 38,500 customer being reported  inaccurate amount owing over a 1 month period. According to ASIC the financier has since worked with Equifax to ensure all incorrect credit listings have been removed.

ASIC has since imposed licence conditions on Cash Converters which includes outsourcing all of their debt recovery to a 3rd party collection agency and must seek consent from ASIC prior to bringing these activities back in-house.

In retribution this time around, Cash Converters has paid $650,000 in community benefits payments to the National Debt Helpline for breaching the Guidelines.

Peter Kell, ASIC Deputy chair, said in a statement to the media, "Consumers expect to be treated fairly and in a manner that complies with consumer protection laws. ASIC expects all financial service providers to have appropriate systems and controls in place to ensure that debt collection practices are consistent with the guidelines. It is also critical that licensees ensure that credit information provided to credit bureaus is accurate."

This is not the first time that Cash Converters has been investigated by ASIC. You may recall that in our May 2017 blog post that Cash Converters were fined and paid $1.35 million in penalties for breaching responsible lending conduct provisions and refunded consumers $10.8 million in fees through a consumer remediation program.

You can download a copy of the ASIC and ACCC Debt Collection Guidelines from their website.

Source: TheAdvisor - May 2018



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