Dealing with debt collectors
The dos and don'ts of debt collecting
If you fall behind on your loan, credit card or utility bills,
you might be contacted by a debt collector. Here we explain how to
deal with debt collectors, and what to do if you are being harassed
or intimidated by someone trying to recover a debt.
What is a debt
A debt collector can be a person from a credit or service
provider or from a debt collection agency. A debt collector may
contact you to:
- Provide information about your account
- Demand payment from you or explain the consequences of
- Offer to settle your account, make alternative payment
arrangements, or review existing arrangements
- Inspect or recover mortgaged goods (if they have a right to do
If you have not responded to previous attempts to contact you,
or not kept to an agreed repayment plan, a debt collector can
contact you to find out why.
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 immediately. 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
Keep good records of all communication with debt collectors.
Include dates and times of contact, how they contacted you (by
phone, in person), their name and company, and what was said.
Debt collectors can contact you by phone, letter, email, social
media or by visiting you in person.
Debt collectors must respect your right to privacy. By law, they
cannot reveal that they are a debt collector or provide information
about your financial situation to another person without your
There are restrictions on the times debt collectors can contact
you. For example, they should not contact you on national public
holidays. Other restrictions include:
- Phone: Debt collectors should not call you
more than 3 times in a week (or 10 times in a month). Unless you
agree otherwise, they can only call between 7.30am-9.00pm on
weekdays, or 9.00am-9.00pm on weekends.
- Face-to-face: They should not visit you in
person if repayment arrangements can be worked out over the phone,
by email or letter. However, if you do not respond to other
attempts to contact you, they may visit you at home as a last
option. They can only visit between 9.00am-9.00pm (weekdays and
weekends), but no more often than once a month.
- Social media and email: If a debt collector
uses email, social media or similar technology to contact you about
a debt, 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
It is against the law for debt collectors to behave in any of
the following ways:
- Threatening, trespassing or intimidating you:
This includes such behaviour as: threatening physical force towards
you or anyone else; damaging (or threatening to damage) your
property; blocking access to your property or blocking your way;
remaining on your property when asked to leave, unless they have a
Court Order. If a debt collector behaves this way, contact the
- Harassing or verbally abusing you: This
includes shouting at you or making personal or demeaning comments;
using obscene or racist language; or contacting you more than
necessary or at unreasonable times.
- Making false or misleading statements or engaging in
deceptive conduct: For example, they must not make false
statements about the money you owe or what will happen if the debt
is not paid; send letters demanding payment that are designed to
look like court documents; or pretend to be or to act for a
solicitor, court or government body.
Debt collectors should not take advantage of you:
- if you are disadvantaged because of illness, disability, age,
illiteracy or other circumstances, or
- if you are not familiar with the law, the debt recovery
process, or the consequences of not paying the debt.
If you believe a debt collector's behaviour is unacceptable, you can
complain or write to your lender using our
sample letter of complaint about debtor
Read our booklet
Our Dealing with debt collectors
booklet helps you understand:
- your legal rights and responsibilities if you owe money
- 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
How to deal with a debt
If a debt collector contacts you, you should be cooperative but
you have the right to be treated in a professional way.
You should also:
- be honest about your financial situation, including other
- return calls from your debt collector, or respond to their
- agree to a repayment arrangement if
you can afford it
- tell the debt collector when your contact details change.
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
Be wary of credit repair
It might sound like a good idea to pay someone to help you fix
your credit problems but credit repair agencies may not always be
able to do what they claim. Be wary of 'credit repair', 'credit
fix' or 'debt solution' companies that claim they can improve your
credit report. In most cases, default listings and other historical
information cannot be removed from your credit report unless they
are proven to be wrong. Find out more about what credit repair
companies can and can't do for you.
If the debt is yours, but you 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 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, ask them to
confirm it in writing or confirm the arrangements in writing
yourself in a letter to them. Make sure you keep a copy of all
letters you send or receive, as well as any receipts or other
records of payment.
Store these documents together to avoid losing any important
If your repayment plan is rejected
If a creditor or debt collector rejects your payment proposal,
explain your situation in writing, telling them how much you can
afford to pay and how often.
They 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 reach an agreement with your creditor or debt
collector, consider contacting a free external dispute resolution
Disputing a debt
Read any statements carefully as they might include recovery
fees or expenses charged by the debt collector. Check your original
contract to see if you have to pay these fees. Seek financial
counselling if you think the fees are unfair.
If you think a debt is not yours or if you disagree with the
amount owing, ask 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.
dispute a debt
If you want to dispute a debt because you do not owe it, you
only owe part of it, or you think you have a good reason not to pay
- Contact the lender, creditor or credit provider and tell them
you dispute the debt
- See if you can access a free external dispute resolution
scheme. See how
- Get free
legal advice immediately
If you are contacted about a debt you have already fully repaid,
explain the situation in writing to the debt collector 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
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.
Dealing with debt collectors can be stressful,
but there are laws to prevent them from making your life a
Last updated: 24 Nov 2016