What is a Debt Collector?
If you have an outstanding debt with a credit provider, you may be contacted by a debt collector.
If a debt collector contacts you, you should first determine whether the debt collector:
- is acting on behalf of the credit provider you owe the debt to; or
- has bought your debt from that credit provider, so that you now owe that debt to the debt collector instead.
This is important as if you are unable to pay the debt, you may wish to negotiate a repayment plan with the party you owe the debt to.
The Debt Collection Guidelines encourage debt collectors to work with debtors and to adopt a flexible and realistic approach to negotiating repayment arrangements, including making reasonable allowances for living expenses, consideration for people with low incomes and ensuring payment arrangements are meaningful and sustainable.
Possible negotiations may include:
- paying the debt off in installments; or
- paying a lump sum in return for the remainder of the debt being waived.
Financial Counsellors can sometimes assist with such negotiations or with managing debts generally.
Conduct of Debt Collectors
The conduct of creditors and all debt collectors is regulated by the Debt Collection Guideline. Under this Guideline, creditors and debt collectors cannot do certain things when pursuing payment of a debt.
This involves limitations on the location, hours and frequency of contact and the communications to third parties (including children).
Behaviour by the debt collectors should also not be threatening, intimidating or abusive. They should not misrepresent or mislead you by making false statements (for example, regarding the consequences for non-payment).
For more information on what debt collectors can and cannot do, download the fact sheet on our website Debt Collection Issues and Complaints.
If you feel that you are being harassed or unfairly treated by a debt collector, you may be able to make a complaint against the debt collector. To assist you in making a complaint to a debt collector, for our sample letter.
If it has been six years since you have last acknowledged or made a payment towards a debt and there has not been a court judgment against you, the debt may be statute-barred. This means that the debt collector may not threaten you with legal action if you do not pay the debt. Implying or stating that legal proceedings will be undertaken when the right to pursue the debt has expired, may be coercive and misleading. If you believe that a debt you owe may be statute-barred, you may wish to contact our advice line on (08) 9221 7066.
Julie received a phone call from a debt collector at 7am on Saturday demanding that she pay up an old credit card debt. The debt collector has been to her house six times in the past week and threatened to report her to the Department of Communities: Child Protection and Family Support (CPFS) if she did not pay up.
Julie rang CCLSWA because she could not afford to pay the debt in full and was also afraid of being reported to the CPFS. CCLSWA advised Julie the debt collector breached the Debt Collection Guideline by calling before 9am on a weekend, by making contact more than 3 times in one week, and by their threat. CCLSWA also advised Julie that she could make a complaint about the debt collector’s conduct.
If you would like further advice, please contact CCLSWA for a free, confidential discussion on (08) 9221 7066. Our telephone advice line is open Monday to Friday (except public holidays) between 9am and 4pm.