Text version: Dealing with debt collectors
About this booklet
This booklet helps you understand:
- what your legal rights and responsibilities are if you owe a
- where you can get help to work out your budget, negotiate a
repayment plan, apply for hardship and better understand your
financial and legal options
- what to do if a debt collector contacts you
- what debt collectors should not do and what you can do if you
have been treated unfairly
- how to dispute a debt.
The Australian Securities and Investments Commission (ASIC)
regulates financial services and financial products.
ASIC's MoneySmart website helps you make smart choices about
your personal finances. It offers calculators and tips to give you
fast answers to your money questions.
Visit moneysmart.gov.au or call ASIC on 1300 300 630.
About the ACCC
The Australian Competition and Consumer Commission (ACCC) is the
general competition and consumer protection regulator and is
responsible for regulation of goods and services generally.
Visit the ACCC's website at accc.gov.au or call the ACCC's Infocentre
on 1300 302 502.
Debt collection guideline
The ACCC and ASIC have produced the 'Debt Collection Guideline
for Collectors and Creditors' to assist creditors, collectors and
debtors to understand their rights and obligations, and to ensure
that debt collection activity is consistent with consumer
You can access the publication at accc.gov.au and asic.gov.au.
Having trouble with debt?
People can get into debt for many reasons, including losing a
job, divorce or separation, getting sick or having an
accident. Whatever your situation, if you are struggling
to repay your debts, don't be embarrassed to get help.
When you sign the loan or credit contract you make a legal
promise to pay back the money that you borrow or pay for the
service you sign up for within the agreed time frames. So you
should do the best you can to pay the money you owe unless you
dispute the debt.
Here's what you can do to get back on track:
- Contact your credit provider - If you can't keep up with
payments, talk to your credit provider straight away to discuss a
repayment plan. Be realistic about what you can pay and be honest
about your situation. Remember to keep a record of these
- Apply for a hardship variation - Tell your credit provider that
you are experiencing financial hardship and why. In the meantime,
keep paying as much as you can afford. You can find more details on
how to apply for a hardship variation on our trouble with
- Talk to a financial counsellor -
Financial counsellors provide information and support to people
with money problems. They may also negotiate with your creditors on
- Get free legal help - Community legal
centres and Legal Aid agencies offer free legal advice in every
state and territory.
Case study: Steve struggles to pay his credit card debt
Steve was made redundant. He started looking for work straight
away but after 4 months he was still unemployed. When his
savings were gone, Steve started juggling credit cards to pay his
bills and mortgage.
Steve then took on some part- time work and was confident he
would find a full time job soon.
He contacted his credit card company and told them about his
situation. The company agreed to temporarily reduce his repayments.
This meant Steve was able to afford the minimum monthly payments
and avoided paying late fees.
If you're having trouble paying your energy, water or
telecommunications bill you can ask to access a retailer's hardship
program. You can do this either over the phone or in writing.
Assistance available may include:
- tailored payment plans based on your ability to pay
- waiving late fees
- information to help reduce your bills (if relevant)
- identifying government concession and rebate programs
- reviewing your contract to make sure it meets your needs (if
If you can't agree with your utility provider, you can lodge a
dispute with an external dispute resolution
What to do when a debt collector contacts
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
debt buyer is the one doing the collecting.
What you should do
If a debt collector contacts you, you should be cooperative but
you should also expect to be treated in a professional way.
You should also:
- be honest about your financial position, including other
- return calls or respond to correspondence promptly
- agree to a repayment arrangement if you can afford it (see Negotiating a repayment plan for more
- tell the debt collector when your contact details (including
your address) change.
If you are concerned about the collector's conduct, you can
complain. For a list of what debt collectors are not allowed
to do, and for information about making a complaint, see Unacceptable behaviour by debt
Important: Are you being taken to court?
If you receive notice that you are being taken to court, get
free legal advice about your options as soon
How and when debt
collectors can contact you
Debt collectors must have a good reason to contact you and
should take into account your circumstances and any reasonable
requests about how and when you can be contacted.
Unless you request or agree otherwise, contact should be limited
|In writing or by phone
National public holidays
No more than 3 times per week or 10 times per
No more than once a month
|No contact should be made
Weekdays by phone - only between
7.30 am - 9.00 pm
Weekdays and weekends -
only between 9.00 am - 9.00 pm
Weekends by phone - only between 9.00 am - 9.00 pm
Should only visit your home if there is no other way
to contact you
Smart tip: Keep a record of any contact
Make sure you keep accurate, complete and up-to-date records of
all communication you have with a debt collector. This may
include notes of telephone conversations or face-to-face
Ways debt collectors can contact you
Debt collectors can contact you in a variety of ways, for
example, via phone, letter, email, social media or by visiting you
in person; however they 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.
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.
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
letter or email.
It may be necessary for a debt collector to visit you if you
have not responded to other attempts to contact you or if your
identity or location is in doubt. 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.
Rules on face-to-face visits
If a debt collector visits you in person, they must:
- leave immediately if you ask them to
- treat your family and any third parties with courtesy and
- respect your right to privacy in front of family members and
- not stay near your home for an extended period or engage in any
other conduct that suggests your house is under surveillance
- not suggest or imply that any third party is liable for the
debt when this is untrue
- not talk to your child (under the age of 18) about the debt
(unless you allow this or the child is willing and able to act as a
translator or intermediary)
- not embarrass or distress you or any third party
Debt collectors must have a good reason to contact you
Debt collectors should only contact you when it is necessary.
Here are some reasons you can be contacted.
Accounts and payments
- To provide information about your account
- To make a demand for payment
Where a payment arrangement is in place:
- to offer to settle your account or make alternative payment
- to review existing payment arrangements after an agreed
- To explain the consequences of you not paying, including any
legal action the collector or creditor can take.
- To explain any restrictions to your utilities (for example,
disconnection of your electricity or gas supply or restriction of
your water supply).
- To inspect or recover mortgaged goods (if they have a right to
- To find out why you have not responded to attempts to
contact you (if this is the case).
- To find out why you have not kept to an agreed repayment plan
(if this is the case).
Unacceptable behaviour by debt collectors
Here are the things debt collectors are not allowed to do, that
are against the law.
Force, trespass or intimidate
A debt collector must not:
- 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
A debt collector must not:
- shout at or verbally abuse you (including making personal or
- use obscene or racist language
- contact you more than necessary or at unreasonable times (see
How and when debt collectors can contact
False or misleading statements or deceptive conduct
A debt collector must not:
- make false statements about the amount you owe
- make false statements about what will happen if the debt is not
paid or what they intend to do (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/or unconscionable conduct
A debt collector must not take advantage of you if you are:
- disadvantaged because of illness, disability, age, illiteracy
or other circumstances
- not familiar with the law, the debt recovery process, or the
consequences of not paying a debt.
Complaining about a debt collector
If you are being harassed or intimidated by a debt collector,
you should make a formal complaint in writing to the
collector. If this does not fix the problem, you should make a
complaint to the relevant external dispute
For information on how to complain, or for legal advice
contacts, see Help and advice about your
Case study: Sam gets help to stop a debt collector
A debt collector called Sam about an old credit card debt. The
debt collector insisted Sam pay off the debt in one payment
and said that if he didn't the company would issue a warrant for
his arrest and Sam would lose his taxi licence.
Sam was scared that he might lose his job and be arrested, even
though it didn't seem possible that he could be arrested over a
credit card debt.
Sam went to see a community lawyer who informed Sam of his legal
rights and lodged a complaint on Sam's behalf with the collection
agency. The lawyer explained that a warrant couldn't be issued
for Sam's arrest and his taxi licence couldn't be taken. The lawyer
also pointed out the Sam's last credit card payment was made more
than six years ago and is therefore 'statute-barred', which gives
Sam a complete defence to action against him (see old debts for more information). The collector
agreed to cease all further debt collection activity against
If you are sure you owe the debt, you should try to arrange an
affordable repayment plan. However, you have a right to dispute a
debt if you think it is not yours, or if you disagree with the
Ask the debt collector for information about your account and
copies of any contracts. If the collector is acting for someone
else, they may get the original credit or service provider to send
you the documents.
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).
If you have asked for this information the debt collector should
stop trying to collect any money until you have received this
A default listing on your credit report should not be made
during this time. You can find more information on our credit reports and
credit repair page.
Smart tip : Check the details of your debt
Read any statements carefully. They might include recovery fees
or expenses charged by the debt collector. Check whether you have
to pay these. For example, did your original contract say anything
about these fees or expenses? Get advice if you think the charges
or fees are unfair. See page 20 for contact details.
What to do if the debt has been settled
If a debt collector contacts you about a debt you have already
paid or settled, explain the situation in writing. Include copies
of any documents that prove the debt has been settled.
If the debt collector continues to contact you, make a
Debt collectors generally have 6 years to recover a debt. If it
is over 6 years (or 3 years in the Northern Territory) since you
made a payment on a debt or acknowledged owing the debt in writing,
and the debt collector or creditor doesn't have a court judgement
about the debt, you have a complete defence against this claim in
court. These debts are called statute-barred debts.
If a debt collector contacts you about an old debt, do not make
a payment or confirm the debt in writing. It is also important that
you file a defence in court. See Help and advice
about your debts for legal advice contacts.
In cases of mistaken identity, showing your driver's licence or
other documents that prove your identity 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 debts in your name, contact your credit
or utility provider immediately.
See our identity fraud page for more
Are you responsible for someone else's debt?
You are generally not legally responsible for paying another
person's debts - even if that person is your spouse, partner
However, you may be liable if you've agreed to be a co-borrower
or guarantor for a loan and the person who took out the loan
defaults on their repayments. You may also be responsible for a
utility (water, gas or electricity) debt if you are a joint account
holder. This may be the case even if you no longer live at the
You should get advice if:
- you agreed to be co-borrower or guarantor under pressure or
- you did not understand the nature or extent of the commitment
you were making.
See Help and advice about your debts for
where you can get advice.
How to dispute a debt
If you want to dispute a debt because you do not owe the amount
claimed, only owe part of the amount, or think you have a good
reason not to pay the debt:
- Contact the lender, creditor or utility provider and tell them
you dispute the debt. Try to resolve the dispute with the business
- If you can't resolve the issue with the business, see if you
can access a free external dispute resolution
- If you can't access, or don't come to a resolution with an EDR
scheme, get legal advice.
If you are in court about the debt, you will need to file
documents with the court. You should get legal advice before doing
this. You must act immediately to file the necessary documents in
the correct way and within the necessary timeframes. If you
don't, a judgment may be entered against you.
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 a whole debt if
you make a lump sum payment of part of the debt. Do not agree to
pay an amount that you cannot afford.
Before you make any payments, make sure it is clear that they
will not chase you for any further amount and ask the debt
collector to confirm your repayment plan in writing.
Make every effort to keep to a repayment arrangement. 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.
Smart tip: Use MoneySmart's budgeting tool
Use the budget planner work out how much
you can afford in repayments.
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
and how often. If you cannot come to an agreement, consider
resolving the matter through a free external dispute
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. See Unacceptable behaviour by debt collectors for
If you cannot make any repayments on a debt you owe, get legal advice.
Keep good personal records
If you reach an agreement with a debt collector:
- ask for repayment arrangements to be confirmed in writing
- confirm arrangements in writing yourself in a letter or email
to the debt collector
- keep receipts or other records of payment (date, amount and
method of payment)
- keep letters or emails you send or receive (include dates on
all your communications).
If you are asked to provide documents, photocopy the originals
and send the copies to the debt collector.
Keep all your documents together to avoid losing any important
Are you being taken to court?
Creditors have the right to start legal proceedings to recover
the money you owe - in other words, they can sue you for the debt.
If they do, these legal proceedings will be civil rather than
criminal, and will have nothing to do with the police or the
possibility of jail.
If you owe the debt
If you receive notice that you are being taken to court (such as
a summons, statement of claim or liquidated claim) you should check
if your dispute can be referred to an external
dispute resolution (EDR) scheme. See Help and
advice about your debts for legal help contact details.
Don't 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.
If you dispute the debt
See Disputing a debt for more
Help and advice
about your debts
If you are being harassed or intimidated by a debt collector,
you can complain in writing to the debt collection company.
If you are not satisfied with their response, you should
complain to the company's external dispute resolution scheme.
Here are some useful places to get help or advice.
Financial counselling is a free service offered by community
organisations and community legal centres. They can help you:
- negotiate with a debt collector
- get a clear picture of your options
- work out a budget.
Call the free national debt helpline on 1800 007 007 from 9:30am
to 4pm, Monday to Friday (mobile phones may incur a fee) or visit
our page on how to find a financial counsellor
Smart tip: Get support if you need it
If you're becoming anxious or depressed about your debts, see a
doctor or get help from support services such as Lifeline
(call 13 11 14) or Beyond Blue (call 1300 224 636).
Case study: Charlie gets help from a
Charlie had a car accident and was in hospital for nearly 3
months. Because he wasn't working during this time, he was unable
to keep up the repayments on his personal loan.
When he fell behind on his payments, his credit provider sold
the debt to a collection agency. A debt collector contacted
Charlie, threatening legal action if he didn't pay his debt
Charlie explained his situation and proposed a repayment plan of
$100 a week. The collection agency said they couldn't accept any
less than $200 and were within their rights to demand a higher
Charlie felt he could no longer deal with the situation himself,
so he went to see a financial counsellor who contacted the debt
collection agency on Charlie's behalf. The financial counsellor was
able to negotiate a repayment plan that Charlie could
Important: Debt agreements and bankruptcy
Before you refinance or pay a debt solution company to help
you sort out your debts just remember there is free help
available from a financial counsellor. If a
debt solution company tells you that going bankrupt or a debt
agreement is a good option, make sure you understand if this
really is the best option as this has serious long-term
consequences for you and your credit rating.
To find out more about debt agreements, personal
insolvency agreements or bankruptcy, visit the Australian Financial
Security Authority (AFSA) website.
Free legal advice
Community legal centres and Legal Aid agencies offer free legal
advice and can help you with disputes and debt recovery through the
Community legal centres
For details of community legal centres across Australia call the
National Association of Community Legal Centres on 02 9264 9595 or
Consumer credit legal service
External dispute resolution schemes
Nearly all financial services, energy, water and
telecommunications businesses belong to an EDR scheme. EDR schemes
hear complaints for free and can be a simpler alternative to
resolving disputes in court. The business must tell you which
scheme it belongs to.
|Australian Financial Complaints Authority
||1800 931 678
replaced the Financial Ombudsman Service (FOS) and the Credit and
Investments Ombudsman (CIO) on 1 November 2018)
|Telecommunications Industry Ombudsman Limited
||1800 062 058
|Energy and Water Ombudsman Western Australia
||1800 754 004
|Energy and Water Ombudsman NSW
||1800 246 545
|Energy and Water Ombudsman Victoria
||1800 500 509
|Energy and Water Ombudsman Queensland
||1800 662 837
|Ombudsman for the Northern Territory
||1800 806 380
|Energy and Water Ombudsman South Australia
||1800 665 565
|Energy Ombudsman Tasmania
||1800 001 170
|Ombudsman Tasmania (for water)
||1800 001 170
|ACT Civil and Administrative Tribunal
||02 6207 1740
ACCC and ASIC
The ACCC and ASIC administer the Commonwealth laws that protect
people from undue harassment and illegal debt collection conduct.
You should report unacceptable behaviour that is serious or ongoing
to the ACCC or ASIC.
|Debts relating to:
|Loans, credit cards or other financial services
||asic.gov.au or 1300 300 630
|Phone or utility bills, tradespeople or other service
||accc.gov.au or 1300 302 502
Make a complaint
Use our letter to complain in writing about harassment by a debt
collector on our dealing with debt
Australian Competition and Consumer Commission (ACCC)
Visit accc.gov.au or phone 1300 302 502.
You can also visit the ACCC's Scamwatch website, which helps you learn how
to recognise, report and protect yourself from scams.
ASIC's MoneySmart website has calculators, tools and tips to
help you with:
Last updated: 01 Nov 2018