Revised debt collection guideline should improve industry conduct

The Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) have launched an updated version of their ‘Debt collection guideline: for collectors and creditors’. This joint publication has been revised following extensive consultation with key industry and consumer representatives to provide enhanced guidance to anyone involved in debt collection.

The revised guideline 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 Commonwealth 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 ACCC and ASIC also encourage businesses to incorporate the recommendations of this guideline into their arrangements with agents and assignees.

This 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.

Consultation confirmed that the guideline continues to be very effective in providing clarity about what is and is not acceptable conduct.

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

“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,” Ms Rickard said.

ASIC Deputy Chairman Peter Kell said: “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.”