What Legal Guidelines Do Debt Collectors Follow In Debt Collection?

 The Australian debt collectors have to work under strict government guidelines. These guidelines, rules and laws are detailed as Commonwealth Consumer Protection Laws. These laws are enforced by the AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and AUSTRALIAN SECURITY AND INVESTMENT COMMISSION in Australia. It is expected that every debt collector in Sydney has an in-depth understanding of the rules to follow during debt collection. Not doing this can make them engage in illegal and unlawful activities during debt collection, and this can land a debt collector in Perth in trouble, as well as the client that it was working for.

Unlawful activities during debt collection - Ampac

Initial Contact with the Debtor

The debt collector in Sydney must provide all details regarding the debt when contacting the debtor for the first time. He has to give details of the client he works for and share information about the debt account. Thereafter, he can demand payment from them and explain the consequences of non-payment. He can also make an offer to settle the account, and there, he will have to suggest alternative arrangements and engage in negotiations.

Engage negotiations alternative arrangements - Ampac

Reasonable Enquiries

The debt collector in Perth has the right to make reasonable inquiries, but at the same time, he must ensure that the entire communication, including the letter of demand and other follow-up contacts are free from any threats and intimidations. There should be no traces of harassment or misleading statements about the consequences of not paying the outstanding amount on time. In other words, a debt collector company cannot make false statements regarding the debt details or engage in deceptive conduct.

For example – the letter of demand should not be designed to appear as a court document or a document that threatens the debtor. The debt collector in Perth has no right to take advantage of the debtor’s lack of information regarding the laws or the debt recovery process. He must clearly outline the consequences of not paying the debt rather than taking advantage of the lack of knowledge of the consequences and making even more intimidating statements.

Law debt recovery process - Ampac

Fair Debt Collection Process

The debt collector in Sydney should be fair and reasonable in the collection process and follow strict guidelines on how and when to contact the debtor. There are strict guidelines on when to get the debtor through a phone call or when to visit. These guidelines help to be followed very strictly because debtors are mostly fully equipped with the knowledge of their rights as debtors.

During the debt collection process, the debt collector should not use abusive language or verbally intimidate or humiliate the debtor. If the discussion is going on smoothly on the phone or via email and things are improving, the debt collector must not visit the debtor in person. Face-to-face meetings should be assumed as the last solution when all attempts to contact the debtor have failed.