Factsheet No. 1
Harassment by Debt Collectors
This factsheet looks at the law covering debt collection practices in New South Wales, Australia.
- When can a debt collector visit me at home?
- When can a debt collector visit me at work?
- What a debt collector can do?
- What can't a debt collector do?
- Things you can do if you are being harassed by a debt collector.
There are limits on what debt collectors can do when they are pursuing you for a debt. In this factsheet we list some of the problems people experience with debt collectors and outline the protections the law offers you.
When Can a Debt Collector Visit Me at Home?
A debt collector is allowed to communicate with you by visiting you
at home. However, personal visits should not be used as the first contact,
or to intimidate or harass you. Initial contact should be by either mail
or telephone.
The Australian Competition and Consumer
Commission Guidelines on debt collection state that a debt collector
should only attend your home between the hours of 7.30am and 9pm (though
this law is being reviewed and might change shortly). Debt collectors
are not allowed to make contact with you on Sundays or public holidays.
The debt collector should leave your home as soon as you ask him or
her to.
A debt collector must not leave any notice stating the name of the debt
collector, that s/he is a debt collector or give any other information
that would tell a passer by that a debt collector has visited you at
home.
When Can a Debt Collector Visit Me at Work?
Debt collectors should only contact you at work as a last resort or
if you have expressly asked to be contacted at the workplace.
Debt collectors should handle all workplace collection inquiries with
discretion and ensure that no one else is aware of the purpose of their
visit.
It is against the law for the debt collector to disclose, or cause to
be disclosed, to your employer the fact that you are in debt unless you
agree to this or it is required for the debt collector to perform a legal
process involving your employer (eg a garnishee on your wages).
Debt collectors should leave the workplace upon request.
What a Debt Collector Can Do
Debt collectors are allowed to make reasonable efforts
to contact you. However, they cannot use physical
force or undue harassment or coercion.
A debt collector can make reasonable demands on more
than one occasion, for the purpose of reminding you of your obligation
and drawing your attention to the likelihood of legal proceedings if
payment is not made. A debt collector cannot though,
intimidate, demoralise or exhaust you through the frequency or nature
of his or her approaches to you, or the content of the letters or phone
calls he or she makes to you.
A debt collector can threaten to take you to Court to
recover the debt and advise you of the additional cost and damage to
your credit rating from being taken to Court to recover the debt. The
debt collector cannot, though, say or do things which
are intended to intimidate or threaten you, such as threatening criminal
proceedings (as distinct from civil proceedings), or the immediate seizure
and sale of your house or belongings.
In deciding whether or not a debt collector has acted lawfully in demanding
payment, consideration will be given to:
- the language the debt collector used,
- the time and place at which the demand for payment was made, and
- whether or not the debt collector exaggerated what would happen to
you if you did not pay.
What Can't a Debt Collector Do?
In addition to the things a debt collector cannot do
mentioned above, debt collectors are not allowed to:
- use threatening, aggressive, personally abusive or obscene language,
- use a threatening, aggressive, or abusive manner when dealing with
you,
- convey the demand to uninvolved family members, particularly your children,
- convey the demand through a third party in order to embarrass you when
you could reasonably have been the subject of a direct communication,
- have excessive contact with you;
- make correspondence look like a court document when it is not one to
mislead you into paying the debt,
- demand you pay enforcement costs (unless the debt collector is repossessing
property you purchased using a mortgage where you failed to meet the
repayments under the mortgage); [for more information on repossession
see our factsheet Repossession
of Motor Vehicles]
- or charge unreasonable costs.
Things You Can Do If You are Being Harassed By a Debt Collector.
If a debt collector harasses you (for example by doing one of the things
mentioned above), you should consider putting your protest in writing
to the debt collection company itself. See also Consumer Credit
Legal Centre website:
Factsheet: Debtor Harassment and Sample Letter to Creditor/Debt Collector Regarding Debtor Harassment.
If this does not stop the harassment you should contact either the Office
of Fair Trading or the ACCC. If you need advice on to how proceed with
a complaint contact your nearest community legal centre or the Legal
Aid Commission.