What are Australia’s debt collection guidelines?

If you either owe or are owed money, you may benefit from understanding Australia’s debt collection guidelines. Here’s a brief rundown.

The Debt collection guideline for collectors & creditors was originally released by the Australian Competition and Consumer Commission (ACCC) and Australian Security and Investments Commission (ASIC) in 2005. It has since been revised, and the ACCC published a new version in 2017. 

It was written to help both creditors (people owed money) and debtors (people who owe money) understand their rights and obligations during the debt collection process, and to lay out what is and isn’t allowed under consumer protection laws and other relevant legislation. 

What are the debt collection guidelines in Australia? 

The debt collection guidelines are a summary of the rules and responsibilities that apply to creditors and debt collection agents in Australia. They are based on relevant sections of both the Australian Consumer Law, the ASIC Act, the National Credit Code and other Australian laws covering debt collection conduct. The 2017 version was written after consultation with industry and consumer representatives, and focuses primarily on the collection of debt from individuals. 

What are my obligations if I owe money?

The guideline is largely dedicated to detailing what creditors such as banks and other loan providers, as well as debt collectors and debt collection agents, are permitted and prohibited from doing under the law. That being said, the guideline states that if you are in debt, you are legally responsible for paying the debt(s) you legitimately owe. Additionally, if you owe money, the guide advises that you should: 

  • Not avoid, or attempt to avoid, your obligation to repay the debt(s) you have incurred
  • Contact your creditors and/or debt collectors if you’re experiencing financial hardship so that all parties can attempt to negotiate an amended payment agreement in good faith
  • Be upfront and honest with creditors about your financial position, including any other debts you may have 

The guide also recommends that you seek the assistance of “a financial counsellor, solicitor or other qualified adviser”, as they may be able to help you better understand your position and negotiate your debt. 

You may also benefit from understanding what the guideline says creditors and debt collection agencies are not allowed to do (summarised below). This may help you avoid falling victim to illegal or prohibited debt-recollection tactics. 

How should creditors and businesses behave when contacting those who owe them money?

If you owe money, there are a few points outlined in the guideline designed to regulate what a debt collector should do when collecting your debt.

Firstly, it encourages creditors to be flexible, fair and realistic in their approach to debt collection. This includes recognising when debtors are vulnerable and/or experiencing financial hardship, including due to issues beyond their control such as unemployment, a serious illness or family breakdown. It encourages creditors and debt collectors to try and negotiate “meaningful and sustainable” payment arrangements. 

Furthermore, the guideline states that creditors should seek to prevent any “impoverishment or humiliation” of debtors, and should be reasonable in how they assess a debtor’s financial situation, in order to negotiate an agreement which allows the debtor to at least live in basic comfort. 

Secondly, the guideline outlines that creditors have two ways of recovering debt: through the courts or by using a collection agency. Choosing to use a debt collection agency generally involves outsourcing responsibility for collecting the debt to a third party, and potentially paying a commission if the debt is successfully collected and paid to the creditor. 

The guideline notes that the recovery of debt(s) through the court system is regulated by both the courts themselves and state/territory law, so creditors who choose to recover debt in this way have little risk of infringing any laws, so long as they follow the relevant procedures and requirements. 

When it comes to third-party collection agents, the guideline explains the original creditor’s responsibilities, including the following points:

  • A creditor will generally be held responsible for anything a debt collection agent does in an attempt to recover your debt on the creditor’s behalf
  • A creditor may be held responsible for their agent’s conduct, even if the agent is acting improperly without the creditor’s permission or knowledge 
  • A creditor may also be held responsible for anything a debt collection agency does to recover a debt even if the creditor has sold the debt and no longer has any claim to it  

The long and the short of it is that if you choose to engage the services of a debt collection agency, you will generally be legally responsible for any misconduct or illegal behaviour they engage in while trying to recover the debt. With this in mind, it may be prudent for both you and your debt collection agency to be familiar with the guideline. 

What are debt collectors not allowed to do?

There are a number of behaviours and actions that are illegal for debt collectors to engage in, as outlined in the guideline. Some of the prohibited behaviours and actions include: 

  • Threatening to take action (legal or otherwise) that they are not legally permitted to take, do not have instructions or authority to take, or have no intention to take 
  • Misrepresenting whether or not they’re legally entitled to seize goods or assets 
  • Behaving in a way which could negatively impact the privacy of the debtor, or doing anything which could reveal to others that the debtor has a debt 
  • Misrepresenting their identity in any way
  • Making or continuing contact with a debtor for “unreasonable purposes”
    • The guideline says that examples of unreasonable contact can include attempts to intimidate, frighten, demoralise, tire out, exhaust, or embarrass the debtor 
  • Unreasonably frequent attempted contact – the guideline advises that this may amount to undue harassment 
  • Visiting a debtor’s home or workplace without their explicit permission to do so, and even if permission is given, not leaving their home or workplace immediately if asked to do so
  • Making contact with a debtor outside of “reasonable contact times”, which are detailed below 

Additionally, if you are disputing a debt, a debt collector should stop any collection activity until you receive any information that has been reasonably requested and the debt has been confirmed. During this period, a default listing should not be made on your credit report.

What times are debt collectors allowed to contact me?

The debt collection guideline lays out what the ACCC and ASIC consider ‘reasonable contact times’ for creditors looking to make contact with a debtor (local times in the debtor’s location). 

Contact by telephone Monday to Friday

Weekends

7:30am to 9pm

9am to 9pm

National public holidays No contact recommended
Face-to-face contact  Monday to Friday

Weekends

9am to 9pm

9am to 9pm

National public holidays  No contact recommended
All workplace contact Debtor’s normal working hours if known, or 9am to 5pm on weekdays

Source: ACCC

The guideline notes that the stipulated times for when face-to-face contact is appropriate must be considered in conjunction with the section of the guideline covering face-to-face contact. It is recommended that face-to-face contact should only be made when it is both necessary and reasonable, and only considered as a last resort. 

The above list offers a summary of some of the prohibited behaviours listed in the guideline. However there are other rules and suggestions for creditors and/or debt collection agents listed in the guideline. If you are a debtor, a creditor or a debt collection agent employed or contracted by a creditor, you can find and read the guide in full here

If you owe someone money but think they or their collection agent are acting improperly or illegally, the ACCC says you can lodge a consumer complaint with them or attempt to resolve the dispute with the appropriate industry ombudsman

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