Dealing with debt collectors
The dos and don'ts of debt collecting
If a debt collector contacts you, you should be cooperative but
you should also expect to be treated in a professional way. If you
are being harassed or intimidated by someone trying to recover a
debt, there are things you can do to stop this behaviour.
Read our booklet
Our Dealing with debt collectors booklet will
help you understand:
- what your legal rights and responsibilities are if you owe a
- where to get help about your debts
- what to do if a debt collector contacts you
- what you can do if you have been treated unfairly by a debt
- how to dispute a debt
What debt collectors
If you fall behind on your loan, credit card or utility bills
and don't contact your provider or respond to them, a debt
collector may contact you.
A debt collector could be the original credit or service
provider collecting the debt themselves or a debt collection agency
acting on the creditor's behalf. Sometimes debts are sold and the
buyer of the debts is the one doing the collecting.
Why a debt collector can contact you
A debt collector can contact you to:
- Provide information about your account
- Make a demand for payment
- Offer to settle your account or make alternative payment
- Review exisiting arrangements after an agreed period
- Explain the consequences of you not paying, including any legal
action the collector or creditor can take
- Explain any restrictions to your utilities (e.g. disconnecting
your electricity or gas, or restricting your water supply)
- Inspect or recover mortgaged goods (if they have a right to do
- Find out why you have not responded to attempts to contact you
(if this is the case)
- Find out why you have not kept to an agreed repayment plan (if
this is the case)
If a debt collector contacts you about a personal loan, credit card, or home loan for a
residential property (your home or investment property), you may be
able to apply to change your repayment plan on the basis of
hardship if a court judgement has not yet been made. See applying for a hardship
variation for more details.
Important: Are you being taken to court?
If you receive notice that you are being taken to court (such as
a summons, statement of claim or liquidated claim), get free legal
advice as soon as possible. Do not ignore the notice. If you
don't take action, judgment may be entered against you. If that
happens, the creditor may be able to enforce the judgment by repossessing
your goods to sell and get their money back.
How and when debt collectors can
Debt collectors can contact you in a variety of ways, for
example, by phone, letter, email, social media or by visiting you
Debt collectors must respect your right to privacy at all
times. By law, a debt collector cannot reveal that they are a
debt collector or provide information about your financial
situation to another person without your permission.
Hours of contact
There are restrictions on the times you are allowed to be
contacted. Unless you request or agree otherwise, contact
should be limited to:
||National public holidays
|No more than 3 times per week or 10 times per month
||No more than once a month
||No contact should be made
|Weekdays - 7.30am to 9pm
||Weekdays and weekends - 9am to 9pm
|Weekends - 9am to 9pm
||Should only visit your home if there is no other way to contact
There is no need for a debt collector to visit you in person if
repayment arrangements can be worked out over the phone, or by
email or letter. However a debt collector may visit you if you have
not responded to other attempts to contact you.
If face-to-face contact is necessary, the debt collector should
visit you at home during the hours set out in the table above.
Visiting you at work should be the last option.
Social media and email
If a debt collector uses email, social media or similar
technology to contact you about a debt you owe, they must be
reasonably sure that the account is not shared with another person
and that their message cannot be viewed by anyone except you.
behaviour by debt collectors
Here are the things debt collectors are not allowed to do, that
are against the law.
Force, trespass or intimidate
- Use or threaten physical force of any kind towards you, any
member of your family or people connected with you
- Damage or threaten to damage your property
- Block access to your property or block your way
- Remain on your property when asked to leave, unless they have a
Behaviour like this should be reported to the police
Harassment, verbal abuse or overbearing behaviour
- Shout at or verbally abuse you (including making personal or
- Use obscene or racist language
- Contact you more than necessary or at unreasonable times
False or misleading statements or deceptive conduct
- Make false statements about the money you owe or what will
happen if the debt is not paid (e.g. repossess your car)
- Send letters demanding payment that are designed to look like
- Pretend to be or to act for a solicitor, court or government
Unfair and unconscionable conduct
A debt collector should not take advantage of you:
- If you are disadvantaged because of illness, disability, age,
illiteracy or other circumstances
- If you are not familiar with the law, the debt recovery
process, or the consequences of not paying the debt
If you believe you are being unnecessarily harassed by a debt
collector, find out how to complain or write to your lender
sample letter of complaint about debtor
Disputing a debt
Read any statements carefully. They might include recovery fees
or expenses charged by the debt collector. Check your original
contract to see whether you have to pay these fees. Seek financial
counselling if you think the fees or charges are unfair.
How to dispute a debt
You have a right to dispute a debt if you think it is not yours
or disagree with the amount owing.
Ask the debt collector for your account information and copies
of contracts. If the debt collector is acting on behalf of a
creditor, they may refer your request to the creditor.
If you want to dispute a debt:
- Contact the lender, creditor or credit provider and tell them
you dispute the debt
- See if you are entitled to access a free external dispute
resolution scheme. See how to complain.
- Get free
legal advice immediately
Disputing the amount
If you accept that you owe the debt but disagree with (or are
unsure about) the amount claimed, ask for an itemised statement of
your account that sets out:
- The amount and date of the alleged debt
- How it was calculated
- Details of all payments made and all amounts owing (including
principal, interest, fees and charges)
The debt collector should stop trying to collect any money until
you have received this information.
A default listing on your credit report should
not be made during this time.
What to do if the debt has been settled
If a debt collector contacts you about a debt that you have
already paid in full, explain the situation in writing and include
copies of any records or information you have that prove the debt
has been settled. If the debt collector continues to contact you,
find out how to
If you are sure that you are responsible for the debt but will
have difficulty repaying it, a debt collector may agree to extend
your repayment period or allow you to make smaller repayments over
a longer time. Be prepared to provide information about your
financial situation to demonstrate what you can afford to pay.
Sometimes debt collectors will agree to finalise the whole debt
if you make a lump sum payment of part of the debt. Only agree to
pay an amount that you can afford.
Be realistic about your living costs and other debts. Use our
budget planner to work out what you can afford to pay.
Make every effort to keep to a repayment agreement. However if
you can't pay what you have agreed to, contact the collector again
as soon as possible to work out what is a reasonable and manageable
amount for you to pay.
If you cannot make any repayments on a debt you owe, get free legal
Keep good records
If you reach an agreement with the debt collector over the phone
or in person:
- Ask for it to be confirmed in writing
- Confirm it in writing yourself in a letter to the debt
- Keep a copy of all letters you send
Store all your documents together to avoid losing any important
If your repayment plan is rejected
If a creditor or debt collector rejects your payment proposal,
put your situation in writing and tell them how much you can afford
to pay and how often.
A creditor or debt collector should not insist that you agree to
a repayment plan that you cannot afford. Do not be pressured to
borrow money from family friends or a lender.
If you cannot come to an agreement, consider resolving the
matter through a free external dispute resolution scheme. See how to
Dealing with debt collectors can be stressful,
but there are laws to prevent them from making your life a
Last updated: 13 Jul 2016