Who is the ACDBA?

The Australian Collectors and Debt Buyers Association (ACDBA) is an industry body established in 2009 to represent the interests of debt collection agencies across Australia. The ACDBA represents both contingent collection agencies and debt purchasing firms.

What is the difference between a contingent collections firm and a debt purchaser?

Contingent collection agencies collect debt on behalf of the original creditor for an agreed fee (often a percentage of the debts recovered). This means the debt continues to be owned by the original creditor. Debt purchasers buy the outstanding receivables from the creditor, which means the creditor ceases to have any association with the monies owed.

If I am a creditor with a single outstanding debt, will a debt purchaser be interested in purchasing the debt?

It is very unlikely that a debt purchaser will buy a one-off debt. Usually, debt purchase transactions involve tranches of many accounts being sold, usually by a creditor such as a bank, financier, telecommunications, or utilities provider. In situations of a one-off debt, you should seek the assistance of a contingent collections firm.

Consumers often have concerns regarding the privacy surrounding a collections activity. What rules and regulations do collectors abide by to protect consumer privacy?

Debt collectors must protect your personal information and the personal information of third parties. The Office of the Australian Information Commissioner (OAIC) is responsible for laws relating to this issue.

To find out more visit: [www.oaic.gov.au].

Is there a dispute resolution scheme that consumers can utilise?

There are independent dispute resolution schemes for the following industries:

- Banking
- Telecommunications and utilities

Additionally, debt buyers as holders on an Australian Credit Licence belong to the following ASIC approved External Dispute Resolution Scheme:

Australian Financial Complaints Authority - www.afca.org.au

Additionally, debt buyers as holders on an Australian Credit Licence belong to the following ASIC approved External Dispute Resolution Scheme

What actions by a debt collector would be classified as harassment and what should a consumer do if they believe they have been a victim of harassment?

Using physical force, undue harassment, and/or coercion to support a demand for payment is prohibited under s.50 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010) and s.12DJ of the ASIC Act.

If a consumer believes they have been inappropriately treated by a debt collector or debt buyer, they should contact the appropriate authorities to lodge a complaint.

For additional information about unacceptable behaviour, visit [www.asic.gov.au] and view the Debt Collection Guideline.

Are collections agents required to complete any formal qualifications before they commence collections activities?

The requirements for licensing and training differ in each state. Those state-based licensing requirements may also stipulate required training that collectors in such jurisdiction must undertake before commencing collections activities.

Debt buyers purchasing debts subject to the National Credit Code are required to hold an Australian Credit Licence (ACL) issued by ASIC. To qualify for an ACL, applicants must meet a number of standards, including certain minimum qualifications for their Responsible Managers.

For additional information about ACLs, visit [www.asic.gov.au] and review Regulatory Guide 203.

Is there an amount that an outstanding debt must exceed before the default can be listed on a consumers credit file? Also, how long must the bill be overdue before it can be listed?

Yes, a default listing on a credit file must exceed $150, and it must be overdue by 60 days before it is listed on a consumer's credit file.

What does the collections process involve?

Every organisation will have its own approach to collecting overdue debts; however, in most instances, contact with the debtor will involve a combination of letters and phone calls.

What rules and regulations are debt collectors required to adhere to?

Debt collectors are required to adhere to a variety of legislative requirements based on the state in which they operate. For example, collectors located in Queensland are required to comply with the Debt Collectors (Field Agents and Collection Agents) Act 2014, while those based in NSW are required to comply with the Property and Stock Agents Act 2002.

Debt buyers, as holders of an Australian Credit Licence, must adhere to the requirements of the National Consumer Credit Protection Act & Regulations. For further information, visit [www.legislation.gov.au]

In addition, the Australian Competition & Consumer Commission (ACCC) and the Australian Securities & Investments Commission (ASIC) released the Debt Collection Guideline: for collectors and creditors, which is designed to assist businesses to comply with the law. To obtain a copy of the Debt collection guideline, visit [www.asic.gov.au]

What is the process for taking a collections dispute legal?

The most common ways that businesses utilise to try and recoup outstanding monies are:

1. Consulting directly with the client to organise payment
2. Sending a letter of demand
3. Taking legal action

Going legal is the option utilised when previous attempts to collect the overdue monies have been unsuccessful. The dollar value of the outstanding debt determines which court a case is assigned to, and the legal proceedings will follow a number of steps:

1. Statement of Claim
2. Serving the Summons
3. Legal Proceeding
4. Enforcing Judgment

The process can vary depending on what state the action occurs in.

What tips does the ACDBA have to assist consumers / businesses in dealing with collectors?

- Don’t ignore letters or phone calls about debts or court notices. If you do owe the money, the best thing you can do is repay it. Unpaid debts can be listed on a consumer’s credit file for up to seven years.

- Act immediately, particularly if the debt isn’t yours. You can ask for proof of the debt; this should help to sort out any misunderstandings.

- Keep copies and records of all correspondence with the creditor and the collections agency. That way, you can provide proof of settlement or resolution of debt notices if a query ever arises about the debt.

- Get it in writing. Any agreements for making debt collection payments should be confirmed in writing and signed by a representative from the collections firm. This avoids misunderstandings about the amounts to be paid or the time period in which those payments must occur. - Understand your rights. Debt collectors are required to adhere to stringent rules. If you believe a collector has breached these rules, you should contact the appropriate authorities.

Further information can be found in the ACCC | ASIC booklet: Dealing with debt – your rights and responsibilities, which can be found at [www.accc.gov.au]