Dealing with debt collectors
The dos and don'ts of debt collecting
Debt collection is legal, but bullying and harassment by debt
collectors is not. If you are intimidated by someone trying to
recover a debt, there are things you can do to stop their
What debt collectors
If you fall behind in loan or credit card repayments and don't
contact your credit provider, a debt collector may contact you.
A debt collector could be a credit provider collecting the debt
themselves or a debt collection agency acting on a company's
behalf. Sometimes debts are sold and the buyer of the debts is the
one doing the collecting.
When debt collectors can
Debt collectors should only contact you when they are:
- Making a demand for payment
- Making arrangements for repayment
- Finding out why an agreed repayment plan has not been
- Reviewing a repayment plan after an agreed period of
- Inspecting or recovering mortgaged goods (if they have a right
to do so)
They are only allowed to phone or meet you face-to-face between
7:30am and 9pm on weekdays, and 9am to 9pm on weekends.
Debt collectors can only visit your home (or another agreed
location) if there is no other way to make contact with you. If
repayment arrangements can be worked out over the phone or by
letter, there is no need for them to visit you in person.
Debt collectors should not:
- Act in a way that is misleading or deceptive
- Harass or force you into paying
- Go to your workplace unless you ask them
- Reveal information about your financial situation to
- Contact you by email, phone or letter more than three times a
- Contact you on national public holidays
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 harassment.
Debt collectors will often agree to extend your repayment period
(or allow you to make smaller repayments over a longer time) if you
are having difficulty repaying your debt.
Sometimes they'll agree to finalise the whole debt if you make a
lump sum payment of part of the debt. It's up to you to tell them
what you are prepared to pay.
Be realistic about your living costs and other debts and be
honest about your financial commitments. Use our budget planner to
work out what you can afford to pay.
Don't give up if a creditor or debt collector rejects your
repayment proposal. Put your situation in writing and tell them how
much you can afford to pay and how often. Meanwhile, keep making
payments at the level you can afford.
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
Then make every effort to keep to the agreement.
If a debt collector contacts you about a personal loan, credit card, or home loan for a
residential property (whether it's your home or an 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.
Keep good personal
To avoid disputes later, keep all:
- Records of payment
- Letters you send or receive (include dates on all your
- Notes of telephone conversations or meetings - write down the
time, date and who you spoke to (their name, their company or
business, and their job title)
Photocopy original documents and send the copies to debt
collectors. Store all your documents together to avoid losing any
Disputing a debt
You have a right to dispute a debt if you think it is not yours.
If you accept that you owe the debt but disagree with (or are
unsure about) the amount claimed, ask for a statement of your
account that sets out:
- The amount and date of the alleged debt
- How it is calculated
- Details of all payments made and all amounts owing (including
principal, interest, fees and charges)
Read the statement carefully. It 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 or free legal
advice if you think the fees or charges are unfair.
A debt collector should stop collection activity until your
request for information has been met, and the debt has been
confirmed. If they don't stop asking you to repay your debt during
this time, find out how to complain or use our sample letter of complaint about debtor
harassment to send to your lender. A default listing on
credit report should not be made during this period.
Debt collectors should give you 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.
In cases of mistaken identity, showing your driver's licence or
other ID may resolve the situation. However, the decision to show
ID is yours - you cannot be forced to do so by a debt collector. If
you think someone is using your personal details to run up a debt
in your name, contact your credit provider immediately. See identity
fraud for more information.
What to do if the debt has
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. Ask the debt collector why they are contacting
you. If they continue to contact you, find out how to
Dealing with debt collectors can be stressful,
but there are laws to prevent them from making your life a misery.
If a debt collector calls on you, or if you receive notice that you
are being taken to court, get free legal advice about your options
as soon as possible.
Last updated: 11 Feb 2014
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