Accc Debt ManagementDebt Management
ACCC has published the Australian Debt Collection industry report (May 2015) with research results on how well the debt recovery sector is meeting the debt recovery directive for debt collecting companies and creditors, a common ACCC and ASIC publishing. The ACCC ( Australian Competition & Consumer Commission) says in its press brief (22 May 2015) that there is room for improvements in the treatment of customers by debt collecting agencies and warns:
Failure by debt recovery companies to meet the debt recovery directive can damage deprived and vulnerable customers and become a goal of ACCC-measures. The ACCC says that this alert applies to believers. Companies that collect their own debt as well as companies that commission debt recovery agencies do not shun accountability.
Companies that hire debt recovery agencies may be made liable for the debt recovery operations of their agents, even if the agents act in a manner that is inconsistent with their debt recovery contracts. Debt recovery is rapidly expanding, with an avarage 8.4% p.a. per year over the last 5 years.
We have 570 debt collectors in Australia with 4.5m open file sizes that simultaneously generate 65m contacts. Approximate turnover of the branch is 1.2 billion dollars a year. Debt recovery problems can differ by sectors; different debts lead to different behaviour and results - there is a differentiation between debt and corporate debt that needs to be understood; debt qualitiy and hardness cases should be administered before a debt is passed on or resold.
Increasing cost and type of supplies have posed particular problems for the power industry - the invoiced amount is unforeseeable, it is high because invoices are made out every 3 month rather than every month and the emergency has to be dealt with. Collections methods that generate extra cost can lead to disadvantages for financially distressed customers - either adding extra administrative charges without a commercial condition that supports the charge, or imposing an extra charge on each claim.
Enhanced supervisory supervision has resulted in better debt collecting practice - the Australia Consumer Act, Australia credit licence legislation, external dispute resolution procedures / ombudsmen and the ACCC / ASIC debt collecting directive for collector and creditor (see July 2014 update) have all resulted in better adherence. In spite of different state and territorial licence systems, the ACCC / ASIC Debt Recovery Directive makes clear the main responsibilities of debt recovery companies in their dealings with customers - debt recovery practice must comply with the Directive.
Incompliant debt collecting practice leads to significant disadvantages for vulnerable and deprived customers. Regulatory authorities are ready to take appropriate measures in such cases - the safety of endangered and deprived customers is a permanent top priority for the ACCC. Loan-repairing companies often raise the cost for debt burdening customers - the problem is that these companies require customers to do what is readily available, i.e. turn to loan bureaus, trade union Ombudsmen, the Privacy Commissioner's office and state-funded finance advisors.
Australia's consumer law rules relating to debt recovery are reflected in the 2001 AESC. ACCC and ASIC will use these rules to initiate criminal sanctions procedures under private law against companies that do not comply with the Directive when recovering their claims. The financial services industry - this industry is governed by ASIC as it is credit-regulated debt.
For the other areas, the ACCC regulates the sector. Collection companies for debt must have an Australian loan licence and be a member of an External Dispute Resolution Scheme (CIO or FOS), just like the lenders. The energy sector - Energy prices have gone far beyond price increases, increasing affordable and harsh conditions.
Consumers' more efficient commitment and innovation support are encouraged to address accounting problems, cases of hardship, separations, and the transfer of debt to several debt recovery agencies. Telecoms sector - Accounting or contractual matters dominate, along with consumers' comprehension of their debt. Merchants must check the can' t pays clients who suffer from the harshness of the can' pays clients efficiently before they send the receivables for debt recovery.
Educational sectors - Since the costs of training are a known factor and the presence of students gives the supplier periodic contacts, there are fewer debt collecting activities in this area. The main interests are the registration of needy users for unsuitable classes or the refusal to withdraw from the agreement if the pupil does not wish or cannot proceed with the course.
Health Care - Debt collecting is low, as Medicare or private health insurers provide patient coverage, and where gaps are covered, they tended to be prepaid. Governments - Centrelink and the Australian Revenue Service are long-term recipients of outside debt recovery service. Commonwealth Ombudsman handles grievances that often focus on improper use of third party debtors, refusal of settlement agreements and new debt.
Parks fees, penalties and other public debts are regarded as an up-and-coming region. Having worked with the debt recovery sector to enhance adherence to the guidelines on the basis of the report, the ACCC will prosecute companies that still breach the consumers regulations of the ACT.