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

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.


Councillor Fights Sheriff in Property Sale

Wednesday, May 30, 2018 - Posted by Michael McCulloch

Julie Hoskin, a councillor in Bendigo Victoria, has won her fight with the Sheriff following the sale of her family home.

Cr Hoskin was issued with a Warrant to Seize Property by the Sheriff after failing to meet repayments on a $386,819.53 debt to Ask Funding following a family law matter which arose 10 years ago. In an Affidavit submitted to the Court Cr Hoskin indicated that she struggled to repay the loan because of a chronic fatigue diagnosis that kept her out of employment until 2013. This was followed by foot injuries in 2015 and shortly thereafter deep vein thrombosis.

The Sheriff originally scheduled the sale of the property in May 2017 however Cr Hoskin was able to negotiate a 3 month moratorium while attempting to secure finance to repay the debt. With her application being declined to refinance the Sheriff proceeded with the auction and sold the property on 23 November for $389,000. Cr Hoskin however refused to hand over the property and argued in Court that the sale price was unfair.

Cr Hoskin said in an Affidavit that the sale price of $389,000 was significantly less than the valuation of $750,000 to $825,000. It is alleged that the Sheriff obtained 2 kerbside valuations from the Valuer-General that priced the property at $450,000 in 2015 and $470,000 in 2017.

Justice Michelle Quigley, of the Supreme Court, ruled in favour of Cr Hoskins saying that the process followed by the Sheriff was fundamentally flawed and led to a sale significantly undervalue. She found that the Sheriff breached their duty to act reasonably in the interests of the Creditor and Cr Hoskin in which to obtain a fair price for the property. Justice Quigley went on to say, "Stopping the Final Auction would have been a reasonable step to take in all the circumstances and would represent a balance of the best interests of both the judgment debtor and the judgment creditor."

While Cr Hoskin is asking that the sale of the property be set aside, Justice Quigley will hear further submissions before handing down a Decision.

Source: Bendigo Advertiser - May 2018


Court Closures 2017-2018 Christmas Period

Saturday, December 30, 2017 - Posted by Michael McCulloch

As is the usual practice this time of year we have received notification that several Courts will not be opened or will have limited staff over the Christmas / New Year period.

As of 18/12 notification has been received from the following States and Territories:

New South Wales
A majority of Registries will be closed from Monday, 25 December 2017 and will re-open Monday, 8 January 2018.

Queensland
All Registries will be closed from Wednesday, 27 December 2017 and will re-open Monday, 8 January 2018.

Victoria
TBA

Australian Capital Territory
All Registries will close from 4.30pm on Friday, 22 December 2017 and will re-open Tuesday, 2 January 2018.

Northern Territory
TBA

South Australia
Magistrates' Court Registries permanently staff during the Christmas / New Year period except for gazetted public holidays.
Supreme and District Court Registries closed from Friday, 22 December 2017 and will re-open on Tuesday, 2 January 2018.

Tasmania
TBA

Western Australia
TBA

Please remember that our office will also be closed over the Christmas and New Year period with us returning for business on Wednesday, 3 January 2018.


Update to Court Charges for Enforcement of Debts

Friday, July 01, 2016 - Posted by Philip Harvey

Being the beginning of a new Financial year we have seen several Local and Magistrates' Court update their filing fees, Sheriff / Bailiff costs and the allowable Professional Costs.

You can find our latest pricing by visiting the resources page on our website.

Postponement of Enforcement Proceedings

Tuesday, August 25, 2015 - Posted by Michael McCulloch

We often come across examples where requests are made to our office for the issue of Default Notices. Having reviewed the request we then find that the same debtors have been issued with the same Notices several times over the course of their loan.

Effectively as a Creditor you are teaching the debtor to pay upon receipt of the Default Notice and not as their Contract stipulates. The debtor will often make contact, make arrangements to clear the arrears however fall into arrears again. The next month you will be issuing another Default Notice, the debtor will contact and make an arrangement and the cycle continues. As a Creditor how can you end this cycle and take control of the account?

Under Section 94 of the National Consumer Credit Protection Act 2009 the debtor can propose an application, verbally or in writing, to postpone action under a Section 88 or Section 90  (i.e. they make an arrangement to clear the arrears). The application must be made by the debtor prior to the s88 or s90 Notice expiring.

As the Creditor you must respond to the request made by the debtor within 21 days of the application and advise of the decision, either accepting or declining the application, the name of their relevant EDR scheme and the debtors rights under the scheme.

What happens though if you wish to accept the debtors proposal but don't want to get caught in the cycle of issuing another Default Notice?

As a Creditor you can issue a Section 95 Notice of Postponement under the Act.

This Notice indicates to the debtor the conditions of the postponement and advises the debtor that the Creditor is not required to give any further Default Notice under the NCCP Act. The Notice however only applies to the debtor that originally negotiated the postponement and does not apply to other debtors, mortgagors or guarantors under the Contract unless these parties have consented to the negotiated postponement.

You can find out more about this service by contacting us.


MoneyHelp Victoria Fielding 100 Calls Per Day

Monday, August 24, 2015 - Posted by Michael McCulloch

MoneyHelp in Victoria, a free financial counselling service, has recently come out in the media claiming that they are fielding 100 phone calls a week for people in financial hardship with credit card debt.

In the past 3 months, on average, more than 50% of callers advised of $10,000 of unsecured credit card debt and 1 in 10 callers disclosed unsecured credit card debt of more than $50,000.

It was noted that on average at least 1 person a week was reported as trying to sustain $100,00 of debt while also managing at least 5 credit cards.

Recently the Consumer Action Law Centre has been pushing for more responsible lending and easier ways for consumers to cancel and switch credit cards as well as direct debits which, historically, consumers have found difficult to cancel despite requesting that the service provider do so.

While most continuing credit facilities had relatively small balances it was found that consumers are often enticed to increase their limits or transfer balances between cards following the advertisement of interest free periods and low introductory interest rates. While this may provide the consumer some relief in the short term, in the long term they often end up paying more as introductory rates revert to a higher interest rate and other fees and charges continue to accumulate on new purchases.

The Australian Bankers' Association said that there were strong measures in place to protect consumers including responsible lending laws and encourage those in debt to contact their Creditors to seek hardship assistance when required.

Source: The Herald Sun


Debt Collection in Private Car Parks

Monday, June 22, 2015 - Posted by Philip Harvey

In Victoria, the collection of unpaid parking fines has come under the microscope of the government.

Operators of private car parks have been issuing unenforceable notices made to appear as fines. To issue the notices, private car park operators had the ability to obtain the name of address of vehicle owners by application through VicRoads.

Moving forward, the Victorian Government has introduced legislation removing the ability of these private car park operators to obtain the name and address of the vehicle owners. (In other jurisdictions such as NSW, Roads and Maritime will not release the registered owners contact details even where a creditor has a valid PPSR listing).

VCAT had ruled in 2014 that the unpaid fines being claimed as liquidated damages amount to a penalty, and therefore unenforceable.

Source: http://www.premier.vic.gov.au/crackdown-on-private-carpark-operators


Updated debt collection guidelines issued by ACCC and ASIC July 2014

Wednesday, July 09, 2014 - Posted by Philip Harvey

The Australian Competition & Consumer Commission ("ACCC") and the Australian Securities and Investments Commission ("ASIC") released an updated guide to debt collection on 8 July 2014.

It is important to note that this guide to debt collection applies to debt collection agencies, in-house collection departments, Government agencies, Solicitors and others. It is not uncommon for internal collection departments or Solicitors to tell us that this debt collection guide does not apply to them. We refer them to page 1 of the Debt Collection Guideline.

In a previous draft of the guide, debt collection contact hours for telephone contact had been significantly reduced. The new guide to debt collection contact hours are not the same as the draft after many industry concerns were flagged with the regulators. 

Debt Collection Contact Hours

  • Phone: Monday to Friday 7.30am to 9pm. Weekends 9am to 9pm with no contact recommended on public holidays
  • Face to face: Monday to Friday 9am to 9pm. Weekends 9am to 9pm with no contact recommended on public holidays
  • All workplace contact to be the debtors normal working hours if known, or 9am to 5pm weekdays.

The updated guide goes through court prosecutions that occurred since the last publication that give good examples of breaches of the Competition and Consumer Act and collection practices that should not be followed.

The emergence of social media is and emerging technologies is also dealt with. We note that it can be difficult to "future proof" such a Guideline at the rate of technological changes we have been seeing, It is important to stick to the core principles underpinning the Guide to Collection when dealing with these new spaces.

For your reference  a copy of the guide available for download here.

 


Debt Collection and bikies

Thursday, May 16, 2013 - Posted by Philip Harvey

Three members of a bikie gang have been captured on CCTV entering the house of a prominent building industry executive. They made demands that money be paid to a sub-contractor they claimed was outstanding. The bikies were in their uniforms.


The police advised that the recent home invasion is one of several incidents of bikie gangs using stand over tactics to collect debts. The Victorian Government is concerned about the supposed level infiltration of the building industry by criminal elements.

Debt recovery legal obligations when commencing legal action

Wednesday, February 20, 2013 - Posted by Philip Harvey

When commencing legal action to collect a debt, you are bound by a number legal obligations. These are common sense that are generally followed as a matter of course by everyone. All jurisdictions in Australia have these obligations (on both Plaintiffs and Defendants), with Victoria being the most explicit and the best example to go through.

The legal obligations in Victoria are called Overarching Obligations. They are as follows;

  • Paramount duty - you have the paramount duty to the court to further the administration of justice.
  • Overarching obligation to act honestly - you must act honestly at all times in relation to your case.
  • Overarching obligation-requirement of proper basis - you must not make claim or response to a claim that is vexatious, frivolous, an abuse of process or does not have proper basis.
  • Overarching obligation to only take steps to resolve or determine the dispute - you must only take steps that will resolve your dispute or case. You must not cause undue delay.
  • Overarching obligation to cooperate in the conduct of civil proceeding - you must cooperate with the other parties.
  • Overarching obligation not to mislead or deceive - you must not engage in conduct which is misleading or deceptive, or is likely to be misleading or deceptive.
  • Overarching obligation to use reasonable endeavours to resolve dispute - you must try to resolve your dispute with the other parties. You must use appropriate dispute resolution processes.
  • Overarching obligation to narrow the issues in dispute - if you are unable to resolve your dispute completely with the other party, you must try and resolve as many issues as you can, to narrow the issues that are in dispute.
  • Overarching obligation to ensure costs are reasonable and proportionate - you must ensure that any legal costs incurred during the case are reasonable and proportionate to the case, having regard to the complexity of the case and the amount in dispute.
  • Overarching obligation to minimise delay - you must ensure that you act promptly and minimise delay at all times during your case.
  • Overarching obligation to disclose existence of documents - you must disclose the existence of any documents that you have which are critical to the resolution of the dispute. Once you are aware you have a critical document, you must disclose its existence to the other party at the earliest opportunity. (Note: if you are given documents you can only use them in connection with your case).


When commencing proceedings, you are agreeing to abide by these obligations. If you do not understand these obligations you should  contact us.



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