What everyone should know about debt collection practices

Why is this an issue?

Debt collection is a systemic part of almost any business. It is estimated that 80% of Australian small business loose up to 30% of the their revenue each year becaue of delinquent customers who waste the time of the businesses that they engage to provide them with goods and services. This means that when debt collection happens it can get quite heated as the business or its representative trying to recover the debt seeks money that is rightfully theirs. ALso, there are some unscrupulous individuals around who prey on those that are vulnerable to believing that they might have to pay a debt and for this reason debt collection practice is now quite tightly regulated.

The ACCC has published guidelines which propose the ACCC’s view of how the Fair Trading Act in NSW and the Trade Practices Act 1972 (Cth) and the associated caselaw restrict the practices which debt collectors can use to recover debt.

What are the guidelines?

The guidelines cover a number of topics and are largely driven by what the ACCC see views as a ‘balanced’ approach to debt collection which means balancing the rights and responsibilities of debtors and creditors. All of the guidelines are driven by the concept of ‘reaonableness’ and the need to make sure that the debt collection process is free from harrassment, intimidation, false threats and standover tactics but ultimately ensures that creditor’s are returned their monies or property rightfully.

1. Contact for a reasonable purpose only
2. Making contact with the debtor
3. Hours of contact
4. Frequency of contact
5. Location of contact
6. Face-to-face contact
7. Privacy obligations to the debtor
and third parties
8. When a debtor is represented
9. Record keeping
10. Providing information and documents

If you need formal advice on these guidelines or any other information we have lawyers available online now who can assist you with these matters.

Australian Debt Recovery Services is an ethical debt collection agency committed to helping clients recover money that is rightfully theirs. Copyright, Australian Debt Recovery Services 2010.

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