Under the Debt Collection Act 2018 (“DCA”) a “creditor” is defined as a person who is owed money from a debtor, or a person that has extended credit to a debtor (i.e. a sale of consumer goods on credit, a loan, etc.) For clarity a “debtor” means a person who has an obligation for a debt and the payment for debt is past due.
The DCA applies to any person, “debt collection business” or “debt collection agencies” conducting debt collection practices against debtors; including individual creditors pursuing debts against a debtor. A “debt collection business” is defined as a commercial enterprise whose business objective is to pursue and collect debt on behalf of another person.
Debt collection agencies are not permitted to conduct commercial activities without a debt collection license. Failure to obtain a debt collection license, and/or operate in contravention of the DCA, may result in a financial penalty and imprisonment.
Consumer Affairs is responsible for the review and issuance of debt collection license applications. Consumer Affairs has an obligation to ensure that applicants for debt collection licenses are a considered a “fit and proper” to conduct debt collection activities.
