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Dealing With Debt Collectors

A debt collector is a person who collects debts on behalf of a company. A creditor may collect the debt himself or may even sell his debts to a debt collection agency. When a debt collector contacts you, it is important to cooperate with them, but this does not mean that one cannot expect the collector to behave professionally.

Responsibilities of the Debtor

In addition, one has the following responsibilities towards a debt collector:

To be honest about one’s financial situation
To return their calls and respond to their communication in a timely manner
To enter into a repayment arrangement, if possible
To communicate any changes in contact details

Responsibilities of the Debt Collector

There are various laws that govern the work of debt collectors:

Cause of Contacting the Debtor – Debt collectors can contact the debtor only for reasonable purposes such as making a demand for payment, making arrangements for repayment, finding out why the repayment plan has not been adhered to, etc.

Restriction on Mode of Contact – Debt collectors can contact their debtors via phone, letter, Email, social media or in person. But there are very clear guidelines that debt collectors must follow when using any of these modes. Australian laws even specify the number of times a debt collector can make contact and the hours during which they can make contact. For example, they can meet their debtor in person only once in a month, and no contact can be made on national public holidays.

Unprofessional Conduct – Debt collectors are prohibited by law from dealing with the debtors, their family, relatives and friends, in any of the following ways:

1. 1. Use or threatening to use physical force
  2. Trespassing over your property or threatening to damage it
  3. Harass or badger you
  4. Use obscene language or abuse you verbally
  5. Make false or misleading statements about the debt you owe
  6. Deceive you by pretending to act as a solicitor or a government authority
  7. Engage in unconscionable conduct by taking advantage of your disability, illness, or any other vulnerability

Protection of Debtor’s Privacy – Debt collectors are required to protect your information from third parties. They are not allowed to share any information about you or your financial position, without your written permission. If they do so, they can be held in violation of the Privacy Act, and you can register a complaint against them with the Ombudsman services.

Rights of the Debtor

As a debtor, if a debt collector approaches you, you have the right to question and dispute the debt, if you believe:

That the debt is not yours (this might be the case if someone fraudulently stole your identity)
That you have already settled the debt
That you are not required to legally pay the debt, as the contract was not fulfilled by the service-provider or the debt is time barred
That the amount of debt or any other particulars claimed by the creditor are incorrect

If you believe that your debt collector is not dealing with you strictly as per the laws, then as a debtor, you have the right to register a complaint against him with the ACCC, ASIC and with the Ombudsman Services.