The ACCC has published a report, Research into the Australian debt collection industry, which provides a market overview and examines structural issues and operational practices of debt collection in a range of sectors.
The report considers regulatory issues and problem areas when businesses collect debts themselves, and when engaging collectors or selling debts.
Issues of particular concern identified in the report included:
- Some in the sector not abiding by the Guidelines (The ACCC and ASIC Debt collection guideline for collectors and creditors) and the law resulting in detriment to vulnerable and disadvantaged consumers.
- Problems that can be traced back to the retailer or service provider: these include specific sector issues (eg energy which reported concerns with billing issues, management of hardship, disconnections and the referral of debt to multiple debt collectors).
- the practices of Credit Repair businesses which charge fees for support that is freely available to them from other agencies such as industry ombudsman schemes and financial counsellors.
- Debt collection processes that impose additional costs for consumers already in financial distress.
The report considers special issues in the financial services, energy, telecommunications, education, healthcare and government sectors.
The report also considers the role of EDR schemes.
Businesses engaging debt collectors may be held responsible for their agent’s collection activities even where the agent acts in a way that is contrary to their debt collection agreement.
