Australian Regulators Release New Guidelines for Debt Collection Activities

The Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) Tuesday released an updated version of their debt collection guidelines for both third party collectors and creditors.

The agencies said that the joint publication – “Debt Collection Guideline for Collectors & Creditors” — has been revised following extensive consultation with key industry and consumer representatives to provide enhanced guidance to anyone involved in debt collection.

The revised guidelines will further assist creditors, collectors, and debtors to understand their rights and obligations, and ensure that collection activity is undertaken in a way that is consistent with the important consumer protection laws that the ACCC and ASIC administer. It provides practical guidance about:

• when it is appropriate to contact a debtor, including what constitutes contact and reasonable contact hours, methods or frequency of contact
• how the need for collection activity will be greatly reduced when debtors act promptly and responsibly, and collectors are flexible, fair and realistic
• new communication technologies developed since the initial publication, including the use of social media platforms and auto dialers, and the potential pitfalls to avoid in using such technologies.

The publication has been updated to reflect significant changes to the law, such as the introduction of the Australian Consumer Law in 2011, the National Consumer Credit Protection Act 2009, and new privacy laws and principles.  It also incorporates recent court outcomes and practical examples to assist creditors, collectors, and debtors in areas that have caused concern.

“Creditors and collectors have generally provided ongoing support for this guideline,” said Delia Rickard, ACCC Deputy Chair. “However, on occasions some creditors and debt collectors go beyond what is reasonable and mislead, harass or act abusively towards debtors. This is unacceptable.”

“If businesses do not adhere to this guidance issued by the ACCC and ASIC, they risk breaching the law in relation to harassment and coercion, false and misleading representations or unconscionable conduct. These breaches can attract significant penalties,” Rickard said.

ASIC Deputy Chairman Peter Kell added: “It is critical that businesses engaging in debt collection are aware of their legal rights and obligations. Where there are instances of businesses disregarding these important consumer protection laws, we will take appropriate enforcement action. The guideline is designed to help businesses carry out their collection activities in a fair and measured way.”

Since 2002, the ACCC and ASIC have been jointly responsible for administering consumer protection legislation in relation to the debt collection industry. The “Debt Collection Guideline for Collectors & Creditors” was initially published in 2005.