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How to deal with aggressive debt collectors

By Vanessa Tripodi

Your credit bills may have gone into collection, but you still have rights. Here's what you need to know in order to successfully deal with a debt collector and tell if one is unlawfully harassing you.


What is a debt collector?
A debt collector doesn't have to be from a debt collection agency. A debt collector can be anyone who is collecting on a debt in the course of their business. This means even the creditor could contact you to collect a debt, or you may liaise with a third party who is acting on behalf of the creditor.

Your rights against aggressive collectors
Debt collectors are bound by law when carrying out their collection duties and you should expect to be treated professionally by the collector. By law, a debt collector is not allowed to:

  • Use physical force or coercion to intimidate you or pressure you to pay your debt.
  • Harass you or hassle you unreasonably.
  • Try to mislead or deceive you.
  • Take unfair advantage of any vulnerability, disability or circumstance which is affecting you. 
  • Undertake any of these unlawful actions toward your spouse, partner, family members or anyone else connected with you.

How to successfully work with a debt collector
Even when a debt collector abides by the laws of their profession, it can still feel intimidating to be contacted about your unpaid debts. However, just remain calm and understand your rights and your options, say experts.

If the debt is yours and you haven't paid it, you can negotiate a repayment plan with the debt collector. Use the following steps to protect your rights and negotiate a successful solution:

  • Be cooperative and polite.
  • Be realistic from the beginning about what you can afford to pay. Take into account all of your other financial commitments when negotiating a plan as you don't want to fall behind on any other bills.
  • Don't be pressured if the debt collector won't accept your repayment plan, as you will get yourself into more trouble if you agree to a repayment plan you can't meet. Write a letter to the debt collector telling them how much you can afford to pay and how often.
  • Keep copies of all correspondence you have with the debt collector, including copies of letters sent and received and notes from any phone calls or conversations.
  • Check that you actually owe the debt by asking for proof of documents and account statements.
  • If you are contacted about a debt that is several years old, seek independent advice before confirming the debt or making a payment.
  • If the debt collector threatens you with legal action, seek independent advice.
  • If a debt collector misleads you, threatens you or is abusive, make a formal complaint.
  • Continue to make payments towards the debt at the level you can afford.

How to dispute a debt
Sometimes debt collectors mistakenly chase a paid debt, have the wrong information about the amount of the debt or try to collect a debt that's not yours. In those cases, you have the following rights:

  • Scenario No. 1: You think you've paid the debt. If you are contacted about a debt which you have paid or have settled in some other way, contact the debt collector in writing and tell them you have paid or settled the debt. Provide copies of payment receipts or bank statements with your letter.
  • Scenario No. 2: You think the amount of the debt is wrong. If you're unsure about the amount of the debt, ask the collector for an itemised statement that includes the amount and date of the debt, how that amount has been calculated and details of any payments made and all amounts you still owe, including interest and fees.
  • Scenario No. 3: The debt is not yours. A debt collector may mistakenly contact you when they are seeking someone with the same or similar name. You can resolve the situation by showing your ID, but the collector cannot force you to do this. You may also be contacted about a debt that was fraudulently accrued in your name. In that case, you need to get a copy of your credit report and your bank statements to prove you didn't know about the debt.

How to deal with overly aggressive debt collectors
By law, debt collectors are restricted from being pushy and aggressive or harassing you in any way. If you are treated unreasonably or harassed by a debt collector, make a formal complaint by writing a letter to the debt collection agency. If you are not satisfied with their response, you can then take your complaint to the creditor's independent dispute resolution scheme if you are dealing with consumer credit. Depending on your situation, you may also complain to the Australian Securities and Investment Commission (ASIC) or the Australian Competition and Consumer Commission (ACCC).

Just remember, being harassed by a debt collector does not absolve you of having to pay the debt.

Article by Vanessa Tripodi


See related: Your new consumer shopping rights: A guide; Debt collection booming in Australia

Published: October 4, 2011

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