If you fall behind on your monthly expenses you may start to build up debt which will require repayment. If you fail to repay your outstanding debts it is likely that the people or businesses that you owe money (i.e., creditors) will pursue legal proceedings against you for the debt that you owe them.

Alternatively, instead of pursuing legal proceedings against you themselves, your creditor may refer your debt to an authorized debt collection agency to represent them and alleviate the need for them to having to actively manage the debt collection process.  

If your creditor refers your debt to a debt collection agency it is important to know that, in addition to the outstanding debt, you will also be subjected to debt collection fees and legal costs which will be added to your outstanding debt

This section covers the legislative framework creditors and debt collection agencies must comply with when pursuing debts against debtors.

The Debt Collection Act 2018 (“DCA”) does not allow debt collection businesses to partake in “unfair debt collection practices”. An unfair debt collection practice includes the following:

• Conduct which harasses or oppresses a debtor;  
• The use of false, deceptive or misleading representations to a debtor;
• The use of unfair or unscrupulous practices;
• Charging commission and fees in excess of the legislative authorized limit;
• Conducting debt collection activities for invalid debts;  

• Applying payment to a disputed debt towards multiple debts; and/or
• Obtaining or providing debtor information from a credit reporting agency without authorization.

It is important to note that individual creditors pursuing their own debts are not held to the same operating standards as a debt collection agency and are not eligible to be considered to be participating in “unfair debt collection practices”.

If you are having a problem with a debt collection agency and suspect that you have been subjected to “unfair debt collection practices”,  Consumer Affairs advises that you contact the debt collection agency immediately. You should be able to get their contact details from their website or from the letter before action you have likely received from the debt collection agency.

In addition to contacting the debt collection agency and speaking to a customer service representative on the phone, Consumer Affairs advises that you send a follow-up email or letter repeating what was discussed. This way you will have a personal record of your conversation with the debt collection agency that may be relied upon in the future.

When sending the follow-up e-mail Consumer Affairs advises that you clearly outline the nature of your complaint to the debt collection agency (e.g. what is happening, or has happened, and what you want them to do about it). The debt collection agency might be able to sort out the problem immediately and schedule an appointment to discuss your concerns in person.

When writing your follow-up e-mail/letter you should note down the:

• Date and time you first contacted the debt collection agency;
• First and last name of the customer service representative you communicated with; and
• The problem you are currently experiencing (i.e., excessive fees charged, misrepresentation, etc.)

When you write to the debt collection agency include your account number and any case reference numbers you have. This makes it quicker and easier to sort out your problem. For further guidance on how to communicate with your debt collection agency and submit a formal complaint please see below.

If you are struggling to keep up with debt payments on things like credit cards, personal overdrafts and loans, Consumer Affairs advises that you reconsider what are your priority and non-priority debts and develop a debt management plan (“DMP”).