At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.
A 19 year old teenager in West Gladstone QLD has recently discovered that causing damage to someone's property is not the correct way to recover a debt.
The teenager was attempting to recover an alleged $700 debt when he attended the address which saw him kicking a metal screen on the front door of the property before smashing a glass window and smashing a TV he found at the side of the house.
Acting Magistrate, Jason Schubert, fined the teenager a total of $1,100 and ordered him to pay $335 in compensation.
It's not the first time we have seen some Unusual Debt Collection Techniques such as those we outlined in our September 2016 issue of Debt Collection News.
Source: The Observer - September 2018
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
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.
A 30 year old son has been ordered by a Court in New York to move out of his parents' home.
Christina and Mark Rotondo started Court proceedings earlier this month following their sons refusal to move out after 3 months of giving him notice to vacate. The drama started in February of this year when Michael Rotondo was given 14 days to move and indicated that they would take whatever action necessary to enforce their decision. Christina and Mark Rotondo then sought legal advice and served another notice giving Michael 30 days to move out and offered him some advice and US$1,100 to find a new place to live.
Following further requests in March 2018 Michael still refused to leave and ejectment proceedings were commenced. Michael asked the Court to dismiss the request stating he ,"has never been expected to contribute to household expenses, or assisted with chores and the maintenance of the premises, and claims that this is simply a component of his living agreement."
Supreme Court Judge, Donal Greenwood, disagreed and granted the eviction. Michael has since indicated that he will be appealing the ruling and said in a statement to the media, "It seems to me like I should be provided with, you know, 30 days or so, because generally you get 30 days after you're found, you know, to have to vacate the premises. So I'm expecting something like that. But realistically, if that's not the case, I don't know."
Ironically the Court has ruled that Michael must leave the premises within 3 months which would be six months from the date of the first notice given to him in February.
Source: CNN World News - May 2018
A public State Government website has named and shamed 4,000 Tasmanians who have outstanding parking, Court fines and infringement notices.
Section 65 (1) of the Monetary Penalties Enforcement Act 2005 allows the State of Tasmania to publish the name, address and details of persons who have an unpaid debt where payment has not been received in full, entered into an approved repayment arrangement or satisifed the debt by other means. The site contains a link to download an Excel spreadsheet which is updated weekly.
With $61 million owing to the State of Tasmania drastic steps are being taken to obtain payment. The highest unpaid debt is $1.2 million owed by David Wei Meng Lee, convicted in 2016 of abalone trafficking. More than 7,225 Australian are currently listed with other enforcement action being taken to recover funds such as suspension of drivers' licences, suspension of car registration, Redirection of Money Owed Orders and Seizure and Sale of Assets.
The Monetary Penalties Enforcement Service ("MPES"), who is responsible for debt recovery for the Courts, Police, Local Government and Public Sector, issued 27,387 sanctions in the last year, an incease of 5,252 more than the last year.
Source: Illawarra Mercury - April 2018
Back in our February 2017 edition of Debt Collection News we reported councils considering home repossessions to recover unpaid rates in the Bowen Basin Local Government area.
This month it is being reported that Bundaberg Regional Council has listed several properties for auction for rate arrears. A council spokeperson said that in November 2017 council authorised a total of 43 properties to be sold at auction representing outstanding rates of just under $475,000. Of the 43 properties only 7 remain however according to Council many ratepayers will settle their debt prior to the hammer falling.
In a statement a council spokesperson said, "Ratepayers who find themselves facing the auctioning of their property have ignored numerous phone calls, letters and approaches from council's debt management team and authorised recovery agency. It is quite normal for the outstanding rates on a majority of properties to be settled prior to auction".
The auction is scheduled for Thursday, 12 April 2018.
Source: NewsMail - March 2018
A Perth resident, Michael Reed, received received a letter of demand from a debt collection agency for a gym membership from his local Anytime Fitness.
While this isn't entirely unusual with the make-up of these Agreements when memberships are cancelled, Mr Reed was demanded to pay $10,296,696.40. This is the equivalent to a membership of at least 20,000 years. In a statement to the media Mr Reed said, "I had a heart attack when I opened it. The guys at work thought it was great. They suggested I set up a GoFundMe page. I guess I know the price for perfect abs is out of my reach now."
Once the issue was identified Mr Reed said that Anytime Fitness were very helpful and the collection agency confirmed that there was an administrative error, apologised and paid his gym membership for a year as compensation.
Source: Perth Now - March 2018
A recent study from finder.com.au has revealed that almost 25% of Australians believe that ambulance services are free.
While Queenslanders and Tasmanians enjoy a free service other States come at a cost and may not ben covered by health insurance. The cost varies across each State and Territory with some costs determined by location and whether or not the incident is deemed an emergency or not with most subsidised by State Governments.
Data from Revenue NSW shows that Sydneysiders alone owe more than $20 million for emergency callouts between July 2015 and January 2018 with a significant number of debts now being referred to debt collectors to follow-up for immediate payment. In NSW patients are charged a callout fee of $372 plus an additional charge of $3.35 per kilometre with the State Government subsidising 49% of the overall cost. Those with concession cards and pensions are excluded from the charge along with those who hold "ambulance only" private health insurance.
State Revenue Office in Victoria could not be reached for comment however in October 2016, Ambulance Victoria was allegedly pursuing $40 million in unpaid fees for patients transported by road and air ambulance with an emergency ambulance trip costing $1,174 in metropolitan areas and $1,732 in rural Victoria. Air ambulance cost up to $4,898 with this figure increasing to $10,475 for a helicopter.
In direct comparison those in Western Australia are charged $932 and South Australians $934 for emergency callout fees. Those in the ACT pay $918 for transport and treatment and in the Northern Territory the cost is based on a callout and kilometre fee with the average trip costing between $745 to $1,000. Those in the Northern Territory can elect to pay $85 per annum to receive unlimited free emergency ambulance transport.
Bessie Hassan, head of PR for finder.com.au, said, "Around one in four Australians believe ambulance services are covered by Medicare, so it could come as a surprise to many when they receive a bill in the mail a few weeks later. Ambulance cover can be available under hospital, extras or as a stand-alone health insurance policy and may include protection for emergency only or all ambulance use so it’s worth double-checking the fine print. There are a few options available for those who are unable to pay their ambulance fees upfront, so it’s worth doing your research if a bill comes in. Patients should bear in mind that in non-emergencies it could be cheaper and faster to simply drive or catch a taxi to the hospital.”
Source: News.com.au - February 2018
The State Penalities Enforcement Registry ("SPER") in Queensland are reporting that debts held by them are now in excess of $40 million in the last 12 months.
SPER reported a reduction of 7.5% in monies collected compared to this time last year ($275.2 million compared to $297.4 million) with many indicating the reduction was due to the widespread suspension of debt collection following the aftermath of Cyclone Debbie in 2017. The decline in collection of revenue was coupled with an addtional $39.174 million increase in debts held by SPER over the past 12 months with unpaid fines and tolls now totalling $1.211 billion as of 31/12/2017.
A spokeperson for SPER said, "If not for the cyclone’s impact SPER was on track to achieve collections to match its record of almost $300 million collected in 2015-16. The suspension lasted several months in some areas as communities worked to recover from the cyclone and subsequent flooding. Treasury has estimated collections for the 2017-18 financial year for SPER of $284 million, consistent with collections achieved in 2016-17. SPER takes a tailored approach, depending on the person’s entire debt history and circumstances, and selects the appropriate enforcement actions to recover the debt."
In response however, Opposition Treasury spokesperson, Tim Mander, said, "There are lots of people who unintentionally or accidentally get caught in the SPER process. We need to be focusing less on hassling those people and spend more time and effort going after the real fine dodgers. Information from last year shows SPER’s 100 largest debtors owing more than $17 million.”
Insured losses due to Cyclone Debbie were estimated by Insurance Council Australia at $1.3 billion with 47,000 claims being made and a total economic loss of $2.4 billion.
Source: The Courier Mail - January 2018
2017 again saw us publishing some interesting articles in the world of debt collection.
5. Legislative Amendments Passed by NSW Parliament
Our October 2017 article detailed the overall legislative changes that had been passed by NSW Parliament in September 2017 when it came to the legal enforcement of a debt in the Local Court of NSW.
4. Council Considers Home Repossessions
Bowen Council reported their attempts in which to recover $10 million in unpaid rates including commencing proceedings to seize properties.
3. ASIC Commenced Proceedings Against Credit Repair Business
In what appeared to be a trend in 2017 there were a number of proceedings commenced by ASIC against credit repair companies where false or misleading representations were made to consumers.
2. Equifax Acquires Veda for $2.5 Billion
In February 2017 we announced the deal between Equifax and Veda had been finalised after 5 years of negotiations.
1. Veda to Refund Customers After Privacy Rule Breach
Following on from our previous article we found that a series of complaints had been made by consumers where it was found that Veda had breached a series of privacy rules.
As always we are continually searching for new stories and compliance issues that matter to you. Let us know here what we are doing right, what we need to fix and what stories you would like to see in our future editions.