What types of behaviours must creditors and debt collectors not engage in when collecting a personal debt?
by The FindLaw Team
Many readers will probably be aware of the news that Australians are allegedly awash in debt, and as a consequence, there’s probably more than a few people reading this piece right now who may be dealing with creditors and debt collectors. There are certain behaviours that creditors and debt collectors may not engage in which this piece will briefly cover.
Debt collectors cannot engage in conduct that is unconscionable
Generally speaking, debt collectors cannot engage in conduct that is unconscionable or unfair. Therefore, a debt collector cannot take advantage of a debtor’s disability or vulnerability, as Kitto J noted in Blomley v Ryan (1956) 99 CLR 362 where his Honour said (at 8):
“[W]henever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.”
Debt collectors cannot engage in harassing behaviour
Debt collectors cannot physically threaten or harass a debtor. Additionally, debt collectors cannot contact a debtor more than is necessary, nor can they contact the person at unreasonable hours. The Competition and Consumer Act 2010 (Cth) and the various fair trading laws at State and Territory level make it an offence for a creditor or debt collector to unduly harass a person in relation to a debt.
Debt collectors cannot engage in false or misleading conduct
Debt collectors cannot engage in false or misleading conduct, nor can they make false or misleading statements in relation to the debt. An example of conduct that may be false or misleading can involve statements that a debtor will be made bankrupt or property such as a house may be taken if the debt is not paid. Additionally, debt collectors cannot send letters of demand resembling court documents which may also be seen as behaviour that is false or misleading.
Options for a person who may be subject to harassing behaviour
Any person who believes that they are suffering from unfair behaviour from a debt collector can pursue some of the following options, depending on their circumstance: