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

Dealing-with-debt-collectorsOur Dealing with debt collectors booklet will help you understand:

  • what your legal rights and responsibilites are if you owe a debt
  • 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 collector
  • how to dispute a debt

What debt collectors do

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 arrangements
  • 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 so)
  • 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)

Hardship variation

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 contact you

Debt collectors can contact you in a variety of ways, for example, by phone, letter, email, social media or by visiting you in person.

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:

By phone Face-to-face 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 you  

Face-to-face visits

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.

Unacceptable behaviour by debt collectors

Here are the things debt collectors are not allowed to do, that are against the law.

Force, tresspass or itimidate

  • 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 Court Order

Behaviour like this should be reported to the police immediately.

Harassment, verbal abuse or overbearing behaviour

  • Shout at or verbally abuse you (including making personal or demeaning comments)
  • 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 court documents
  • Pretend to be or to act for a solicitor, court or government body

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 using our sample letter of complaint about debtor harassment.

Disputing a debt

Smart tip

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 complain.

Negotiating a repayment plan

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.

Budget planner

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 advice.

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 collector 
  • Keep a copy of all letters you send

Store all your documents together to avoid losing any important information.

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 complain.

Dealing with debt collectors can be stressful, but there are laws to prevent them from making your life a misery. 


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Last updated: 05 Dec 2014

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