As an Australian business owner (small or large), you need to familiarise yourself with the debt collection guidelines that have been set by the ACCC (Australian Competition and Consumer Commission) and the ASIC (Australian Securities and Investment Commission). These guidelines for Australian debt collectors provide the set of approaches that both parties of the debt collection process should undertake.
This guide for creditors and collectors was released for the first time in October 2005 by the ASIC and ACCC. It reflects applicable provisions of the ACL (Australian Consumer Law) and the ASIC Act that covers the debt collection conduct.
This guide has been continuously revised leading to the publication of a new version. The amendments came after extensive consultations with consumer representatives from ACCC and ASIC. The guide now incorporates realistic examples and current court rulings to assist debtors, collectors, and creditors in their various areas of concern.
These guidelines cover Commonwealth consumer protection laws like ACL among the other appropriate legislation. It was crafted with a specific focus on the debt collection process from individual debtors. However, most of the principles and laws that these guidelines cover and discuss can also help in collecting business and corporate debts, especially small business debts.
Below is a list of some key points from the guidelines for Australian debt collectorsthat will guide you through the debt collection process.
• Identify yourself when contacting the debtor
• Don’t tress pass or attempt to
• Don’t contact the debtor using a method he specifically advised you not to use
• You should never disclose information about the debtor to third parties
• You have a right to making reasonable inquiries when the debtor tells you that he cannot pay
• Face-to-face visits options should be the last resort during debt collection
• Maintain professionalism all the time while contacting the debtor
• Observe propriety while contacting the debtor like contacting the debtor during reasonable hours like 8 am to 8 pm.
• Observe caution and professionalism all times while making representations about the effects of non-payment or the debts’ legal status.
• If the debtor introduces a representation, contacting him in person needs to be the last resort
• You need to present evidence of indebtedness upon request
When you follow these guidelines, you will reduce the need for the collection activity. When collectors are fair and flexible and debtors responsible and prompt, you will realise a realistic debt collection process and agreement. They also provide a realistic and practical set of approaches for all the parties that are part of the debt collection process.
There is a high possibility that you are on the right side of the law when you ethically conduct the debt collection process. Make sure that you familiarise yourself with the specifics and details of the do’s and don’ts of debt collection together with the suggested practices. It will help you to carry out the debt collection process in a legal manner and increase the chances of getting prompt payments.
However, these guidelines don’t limit you, and you can take legal action to collect the debt. You can also conduct legal repossession activities on legitimate security interests. The debtor can also secure and seek pre-judgement remedies and undertake relevant processes that entail these actions. If the debtor fails to pay and you think of taking further actions, it’s good to seek legal assistance and advice from the relevant authorities.