Creditors are entitled to chase after unpaid debt – but there are some things they can't do
In a debt collection situation, creditors are given a lot of power to chase up unpaid debt. They can contact a debtor by phone, email or social media, and even seek to meet in person. However, there are limits to the contact a creditor can have with a debtor – in terms of how much contact can be made and how.
Section 45 of the Australian Consumer Law and Fair Trading Act 2012 outlines unlawful debt collection practices, which include:
- trespassing on a debtor’s personal property
- employing abusive language or intimidation
- employing deceptive tactics
- capitalising on any illness, disability, age, illiteracy or inadequate grasp of the law on the debtor’s part
- talking about the debt to another party without the debtor’s permission
Moreover, a creditor is only allowed to contact the debtor within certain set periods, namely, 7:30am-9pm on weekdays and 9am-9pm on weekends. Calls may be made a maximum of 3 times a week or 10 times a month; however, they may not be made on national public holidays.
If contact is being made via email or through social media, a creditor must also be reasonably certain that the account isn’t shared and that messages delivered to that account are private.
In the event that a creditor disregards these regulations, the debtor can take action; for instance, the police can step in on the debtor’s behalf if a creditor is making violent threats. The Australian Financial Complaints Authority may also intervene if a creditor is not scaling back inappropriate behaviour.
