Tuesday 21 Feb 2017
By: Srikaran Nadador
Since the introduction of the government’s new automated debt recovery system in July 2016, there has been severe public backlash against the inaccurate system of data-matching which has affected over 170,000 people to date.
Financial Counsellors may be interested to know that Centrelink has enlisted private debt collectors, including Dun & Bradstreet and Recoveries Corp, to recover the alleged overpayments.
The website www.notmydebt.com.au is reporting that debt collection agencies have been engaged by Centrelink to pursue alleged overpayments. One former Centrelink recipient stated in a news article that she was bullied by debt collection agency Dun and Bradstreet into repaying $2524 to Centrelink after allegedly being threatened with legal action and a criminal record if she refused to pay.
It is useful to remember that private debt collectors are required to comply with the ACCC and ASIC’s Debt Collection Guidelines. Centrelink are not required to comply with these guidelines.
Provided below is a list of ASIC/ACCC Debt Collection Guidelines that Financial Counsellors can consider when dealing with a client being pursued by a debt collector:
It is important to recognise that these guidelines provide further protection to debtors along with the Commonwealth Consumer Protection Laws.
Additionally, debt collectors pursuing these debts in Victoria are also required to comply with the Debt Collection provisions in the Australian Consumer Law & Fair Trading Act 2012 (FTA) (Vic).
Section 45 of the FTA provides a list of the prohibited debt collection practices and section 52 affirms that it is an offence to charge a debtor for
the cost of debt collection. For instance, section 45(2)(h) prohibits someone from impersonating an employee or agent of the Commonwealth and section
45(2)(k) prohibits false or misleading representations in connection with the extent of a debt; or the method of recovering a debt.
The Debt Collection guidelines provide additional guidance to debt collectors, like those involved in the Centrelink saga, to act in accordance with fair and ethical standards. It is evident that the actions of private debt collection agencies continue to be at odds with the type of conduct expected. Interested stakeholders are able to put forth a submission to a Senate Inquiry on the matter until 22 March 2017.
Srikaran Nadador is a volunteer at Consumer Action Law Centre.