This fact sheet is for information only. It is recommended that you get legal advice about your situation. See the Fact Sheet: Getting Help.
Suzy had a mobile phone about 2 years ago. She stopped using the phone when she couldn’t afford the bills, especially after some “friends” ran up a huge bill at a party. Soon after, she moved house, lost the phone and put the whole incident out of her mind.
Recently a debt collector contacted Suzy about an outstanding debt of $1,200. The debt collector insisted she must pay back all the money owing straight away. Suzy explained that she does not have the money as she is unemployed. The debt collector is now ringing Suzy everyday telling her she has to pay. The debt collector keeps telling Suzy if she does not pay the Sheriff will be coming around to take her furniture.
What is Debtor Harassment?
If you owe someone money you are a debtor. If you get behind in your loan repayments, fail to pay a bill, or owe someone money, chances are somebody will contact you to request payment. You may be contacted by:
- the person or company you owe money to ( the creditor) or their solicitor; or
- a debt collector or their solicitor. Debt collectors sometimes “buy” the debt from the creditor. This is known as an assignment of the debt. If this occurs the money is owed to the debt collector.
A creditor or debt collector can approach you for payment of a debt you owe. This means they can:
- Ring you a reasonable amount of times per week requesting payment of the debt (reasonable would probably be no more than 3 times a week, depending on the circumstances)
- Visit you at home requesting payment of the debt (subject to a reasonable amount of visits per week)
- State that legal action may be taken against you to recover the debt
- State that a listing may be made on your credit report
If you are contacted by a creditor or a debt collector DON’T PANIC! For some information about your options see Fact Sheet: Dealing with Debt Collection.
Sometimes creditors/debt collectors go beyond what they are legally allowed to do in demanding payment for the debt. This is called debtor harassment.
This fact sheet is about debtor harassment only.
What a creditor/debt collector can’t do
If someone says that you owe them money, they cannot:
- Have you sent to gaol and cannot threaten to send you to gaol
- Threaten you with harm
- Threaten to tell your employer, neighbours or family about your indebtedness
- Take and sell (or threaten to take and sell) any of your property over which they do not have a mortgage or other form of security unless they have an order from the Court
- Threaten to garnishee (take) money from your wages without a court order
- Ring you very frequently (say four times per week or more without good reason) or ring you at unreasonable times such as very early in the morning (before 7am) and/or very late at night (after 8pm)
- Visit or ring you at your place of work if you have asked them not to and you have provided an alternate contact address and phone number
- Visit or ring you at work so that third parties become aware of the debt collection
- Send you letters that look like court documents (but are not court documents)
- Use abusive or threatening language.
Things you can do if someone is trying to collect a debt from you
- Keep written records and copies of documents.
- Every time a debt collector contacts you write down the time, date, what was said and the name of the person you talked to.
- Get advice or assistance. You should contact either a financial counsellor or a community legal centre to see if they can assist you. A financial counsellor may be able to assist you to work out ways to repay the debt. A legal centre may be able to assist you with writing to the creditor or making a complaint to a consumer protection agency or the police. (See Getting Help )
- Write to the debt collector. You should write to the debt collector and ask them to stop harassing you. See Sample Letter – Debtor Harassment. Keep a dated copy of your letter and any reply.
- Lodge a dispute in an external dispute resolution scheme (if available)
- Make a complaint to a consumer protection agency
What you can do if you are being harassed over a debt?
Please note that if you have been harassed this does not mean that you do not have to pay the money you owe. If you dispute the debt, get legal advice – see Fact Sheet: Getting Help.
Lodging a dispute in an external dispute resolution scheme (EDR)
If the debt collector is in EDR, you can lodge a dispute about the debtor harassment. The debt collector is likely to be in an EDR if the debt was originally a loan, for example, a credit card debt.
There are two EDR’s to check:
- Financial Ombudsman Service (FOS) – www.fos.org.au. Ph : 1300 780 808
- Credit Ombudsman Service (COSL) – www.cosl.com.au. Ph: 1800 138 422
If the debt was originally a telecommunications or energy and water debt, lodge in the relevant EDR against the original company where you obtained the service.
- Telecommunications Industry Ombudsman (TIO) – www.tio.com.au. Ph: 1800 062 058
- Energy & Water Ombudsman NSW (EWON) – www.ewon.com.au. Ph: 1800 246 545
If the debt collector is a member of an EDR, you can lodge in EDR to request compensation for any debtor harassment you have suffered.
Consumer protection agencies
It is worth considering making a complaint to the relevant consumer protection agency if you have been the victim of debtor harassment. The consumer protection agency may not be able to assist you personally but it will provide information about any debt collector misconduct. If there are a number of complaints about a particular debt collector the consumer protection agency may investigate.
The relevant consumer protection agencies are:
1. Australian Securities and Investments Commission (ASIC).
ASIC has national responsibility for debtor harassment relating to credit (credit being loans of all types to consumers). If you are being harassed about repayment of a loan, you should make a complaint to ASIC.
2. The Australian Competition and Consumer Commission (ACCC)
If the debt in question was not a loan (for example, an unpaid phone bill) you can make a complaint to the ACCC.
3. The NSW Police
If you have been physically assaulted or verbally abused or harassed or intimidated by a person seeking to recover a debt you should report the incident to the police. The police may charge the person or assist you to take out an apprehended violence order (AVO) against the person.
In NSW most debt collection companies are licensed commercial agents. Some forms of harassment and other criminal offences may be relevant to revoking or refusing to renew a debt collector’s license.
The police are notified when an application is made to the Local Court for a license. The Police can object to the granting of the licence. An objection can be on the basis that a person is:
- not of good fame or character; or
- is not a fit and proper person to hold a licence; or
- has been disqualified under the Commercial Agents and Private Inquiry Agents Act from holding a licence; or
- has been convicted of an offence punishable by indictment.
If an objection is made, then the licence application is listed for hearing at court.
Need some more help? See Fact Sheet: Getting Help for a list of additional resources.
Last Updated 5/7/2013