Action on debt collection complaints

ASIC has taken action against Shield Mercantile Pty Ltd following complaints from consumers about harassment.

Among the complaints were concerns regarding unduly frequent contact with debtors, contact with third parties, inappropriate and aggressive phonecalls and inadequate internal dispute resolution policies and procedures.

ASIC spokesperson, Greg Kirk, said: ‘Creditors and debt collectors can’t behave in a way that is misleading, or that amounts to undue harassment or coercion. ASIC will take appropriate steps to ensure that debt collectors comply with the law.’

In response to ASIC’s concerns, Shield Mercantile has reviewed its compliance system and processes and implemented a number of changes, including:

  • a telephone call recording system
  • regular audits of debt collecting telephone calls
  • improvement in the training of staff
  • improvement in internal dispute resolution procedures, and
  • appointment of a Quality Assurance Manager, Compliance Manager and Group Coordinator.

Responsibility for debt collection regulation at the Federal level is divided between ASIC and the ACCC. In general terms, ASIC has responsibility where the debt relates to the provision of a financial service, including a credit facility. The ACCC has responsibility where the debt relates to the provision of other goods and services (e.g. utilities).

Further information for debt collectors and creditors can be found in the joint publication by ASIC and the ACCC, Regulatory Guide 96 Debt collection guideline: for collectors and creditors (RG 96), issued October 2005, which is available to download from the ASIC website or by phoning the ASIC Infoline on 1300 300 630. Details about dealing with debt collectors can also be found on ASIC’s consumer website, MoneySmart.

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