Debt collectors

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					MoneyHelp Factsheet
Debt collectors



Debt collectors have the right to take reasonable
                                                                                                Need more information?
steps to recover unpaid debts, but they must do so
                                                                                                Visit www.moneyhelp.org.au
lawfully.                                                                                       Or call 1800 149 689


Victorians Debt collectors are only          •	   ask for all information about the        •	    seize and sell any property used as
permitted to contact people about paying          alleged debt in writing before                 security for the debt.
their debts:                                      making any payment
                                                                                           •	    obtain an order from a court that
•	   between 7.30am and 9pm on               •	   advise if they have paid the debt              allows the sheriff to seize and sell
     weekdays                                     and supply proof including copies of           some of the debtor’s property, such
                                                  receipts or bank transaction details           as a home or a car worth more
•	   between 9am to 9pm on weekends
                                                                                                 than $6,500 (but excluding basic
                                             •	   ask for written proof the debt
•	   on days other than public holidays:                                                         household goods) even when there
                                                  collector is authorised to pursue the
Debt collectors can only make contact                                                            is no security held.
                                                  debt
by phone or letter to a maximum of three
                                             •	   keep a record of all contact from the    Unacceptable behaviour by
times a week or a total of 10 times a
                                                  debt collector, including the dates
month.                                                                                     debt collectors
                                                  and times of calls and the name of
Debt collectors can only visit people             the person spoken to.                    In seeking to resolve a debt, a debt
about their outstanding debts when                                                         collector must not:
                                             Debtors may ask another person,
they have obtained prior permission to
                                             including	a	financial	counsellor,	to		deal	   •	    use or threaten force towards a
make the visit, or if the person who owes
                                             with a debt collector on their behalf.              debtor, their family or other person
money has failed to advise the debt
                                                                                                 connected with them
collector of an alternative way to make
contact.                                     Lawful debt collector                         •	    damage or threaten to damage the
                                             behaviour                                           debtor’s property, block access or
Debt collectors can then only visit a
                                                                                                 block the debtor’s way
home or workplace between 9am and            Debt collectors cannot send people
9pm, and no more frequently than one         to prison for unpaid debts. They must         •	    make unauthorised contact with a
visit per fortnight. They must not discuss   behave lawfully and cannot threaten                 child under 18 years
a debtor’s situation in front of or within   or physically intimidate a debtor. Debt
                                                                                           •	    talk about the debtor’s situation to
the hearing of others at a workplace, and    collectors can write or phone people who
                                                                                                 others unless the debtor has given
must leave the home or workplace when        owe them money and demand payment.
                                                                                                 them explicit permission
asked to do so.                              They can also:
                                                                                           •	    make false statements about what
                                             •	   take debtors to court to recover
When a debt collector                                                                            will happen if the debt is not paid.
                                                  debts if they follow correct
makes contact                                     procedures
                                                                                           Options for paying a debt
People contacted by a debt collector
should:




1800 149 689
www.moneyhelp.org.au                                                                                                        Page 1 of 2
MoneyHelp Factsheet




collector                                         claimed, are incorrect

                                             •	   it is a statute-barred debt. If no          Key messages
A debt collector may demand that a
debtor make full payment in a short               payments have been made for six             •	   Debt collectors cannot
time-frame if repayments are in                   years, there has been no written                 threaten or intimidate debtors,
arrears. However, people should not be            admission of responsibility for the              or have them sent to prison
pressured into borrowing money (even              debt during that time, and there
                                                                                              •	   Debt collectors have to
from friends or family) until they have at        is no court judgment against the
                                                                                                   consider	requests	for	flexible	
least sought professional advice. There           person for the debt, a debt is
                                                                                                   payment arrangements for
are usually other ways to deal with debt          referred to as “statute-barred”.
                                                                                                   most debts
problems, including:                         When a debt in dispute cannot be
                                                                                              •	   Debt collectors cannot visit a
•	   offering to pay by instalments while    resolved, a consumer may take the
                                                                                                   debtor’s home or workplace
     looking for other options to pay        matter to an industry ombudsman or
                                                                                                   with their permission if the
                                             the Victorian Civil and Administrative
•	   seeking a variation of repayments                                                             debtor has provided them with
                                             Tribunal. Creditors will usually take small
     on the ground of hardship because                                                             other contact details
                                             debts they have not been able to recover
     of job loss
                                             to the Magistrates’ Court
•	   offering to pay a smaller lump sum
                                                                                           Consumer Affairs Victoria: Debt
     as	full	and	final	settlement	           If a debt collector is acting                 collectors; your rights in Victoria
•	   asking for the debt to be waived        illegally                                     (Financial Services Fact sheet)
     where the person has limited assets                                                   Fido website:
                                             Despite federal and Victorian
     and cannot pay                                                                        www.fido.gov.au
                                             consumer protection laws, instances
•	   doing nothing and waiting to be         of harassment, coercion and other
     sued. People with no assets and no      problems by debt collectors are often         The information on this fact sheet is general
     income to pay the debt (for instance,   reported.                                     and does not constitute legal advice.
     those on Centrelink payments)                                                         MoneyHelp’s products and services have
                                             People concerned about a debt
     may not be affected by waiting                                                        been prepared for the information of
                                             collector’s conduct should contact
     in practical terms. However, by                                                       Victorians who have experienced or are facing
                                             Consumer Affairs Victoria on 1300 558         job loss or reduced working hours because
     choosing this option, any court order
                                             181 for advice. A formal complaint can        of the economic downturn. These people can
     issued will be listed on their credit
                                             be lodged with Consumer Affairs Victoria      phone 1800 149 689 to speak to a MoneyHep
     report	for	five	years	                                                                financial counsellor. A financial counsellor
                                             in instances of harassment.
•	   applying for voluntary bankruptcy.                                                    will discuss a range of debt payment options
                                             People feeling physically intimidated can     based on an individual’s circumstances.
                                             report the debt collector to the police.
Disputing a debt
A debt may be disputed on the grounds:       Sources
•	   it is not the person’s debt

•	   it has already been paid

•	   the details, such as the amount




1800 149 689
www.moneyhelp.org.au                                                                                                         Page 2 of 2

				
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Description: Debt collectors