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How To Handle Communications With A Debt Collector In Australia
How To Deal With A Debt Collector In Australia
Communication Tips For Those Dealing With Over The Top Debt Collectors
If you are in the unfortunate situation of having outstanding credit owed to a financial institute, you can sometimes find yourself on the other end of harassing phone calls from debt collectors who blur the line of what’s legal when it comes to retrieving funds.
This may not be the case for all debt collectors, as many do stay within the law, although there are always exceptions. For this reason we’ve put together a guide to help your protect yourself by understanding what is allowed and what is unacceptable behaviour from a debt collector.
Understanding The Debt Collector’s Job
Understand the debt collector and know your rights in Sydney
Debt collection is basically when a creditor that you owe money seeks to secure payment of the debt you owe them. You or your business is legally bound to pay the money that is owed, however, this doesn’t mean that you don’t have any rights. It’s important that you understand what a debt collector’s role is as well as your legal rights when dealing with a debt collector. However, you also need to play a role by making sure you cooperate with the debt collector. They often have the ability to negotiate with you as well, which means you could work out a better deal for yourself.
In most cases, a debt collector is an employee of a third party agency who has been hired by a large company to collect a debt that is owed to them. A debt collector is usually called upon when you fail to pay your bill and communicate with your creditor. Whenever speaking to someone claiming to be a debt collector, you have the right to ask for verification before you continue contact with them. When you are dealing with a debt collector you are protected by Australian Consumer Law. This mean that a debt collector cannot, harass, mislead, pressure or act unconscionably to you.
In other cases, debt collectors work for themselves, by buying up debts they believe they can retrieve. Companies are often happy to do this as they can cut their losses if they believe that a debt will not be repaid. Usually they buy the debt from the companies for a cheaper price than what you owe, say 60%, then they come after you for the full amount. This can be a scary experience as the company you trusted to pay has now sold your debt to someone you had no dealings with. This is why it’s important to fully investigate the claims of the debt collector to make sure who you actually owe the money to.
What Methods Do Debt Collectors Use
Know the limits of a debt collectors power in Melbourne
Debt collectors are not law enforcers and have legal boundaries just like any other citizen. There are somethings that a debt collector is legal allowed to do however and you will need to be aware of the difference between proper debt collection and illegal debt collection. When dealing with a debt collector, they may do the following to retrieve the debt owed:
Inform you of the status of your account and how much you owe
Request the amount that is owed
Create an offer in which makes the debt more payable by you, such as a payment plan
Explain the legal consequences which may occur if the debt is not settled
Explain that restrictions may be placed on your utilities
Claim any mortgaged goods and determine their value towards your balance
Ask why you have not actively responded in the past
If the debt has been outstanding for some time and you have not taken action, the debt collector may decide it’s time to take you to court in order to get an official judgement of your debt. It’s at this point, if you haven’t already, you should take immediate action to protect yourself. By taking action as soon as possible you may be able to prevent any in erasable marks against your credit history which will affect you in the long run. Once an official judgement is made, you have less leeway with the debt collector and payment will be due.
A debt collector is able to force you into bankruptcy if you refuse to pay off your debts. This is less than ideal and if this is being considered you should consider talking to a debt counsellor about protecting yourself. Debt collectors in this case also have the authority to strike a deal with you if they can see you are unable to pay the debt. A debt counsellor or negotiator can handle your debt collector, going to them with a proper deal that should hopefully allow you to reduce the amount of debt owed and the amount of interest you have to pay. You need to properly consider your options and if you are struggling to pay off your debt, it might be time to call a debt counsellor to avoid the financial burden of bankruptcy.
The Six Basic Rights You Have When Dealing With A Debt Collector
Know how to protect yourself from debt collectors in Brisbane
When dealing with a debt collector, you have six rights which, if you feel at any time are being violated, you should cease contact with the debt collector and especially not make any agreements which you may later regret.
You have the right to request no further contact
You have the right for proof of your debt
You have the right to be treated fairly
You have the right to negotiate payment plans that suit your finances
You have the right to live in peace
You have the right to sue the debt collector if any of these rights are violated
Debt collectors may call you by phone a maximum of three times a week and ten times a month, between the hours of 7:30am-9:00pm on weekdays and 9:00am-9:00pm on weekends.
Debt collectors may choose to visit you in person if every other form of contact has failed, but only between 9:00am-9:00pm on weekdays, it is only ever appropriate to visit on weekends if they absolutely no other way of contact. It is not often that a debt collector has a good enough reason to visit your home, and they should make every effort to contact you alternatively before they do. Debt collectors must seek permission from you for further contact to be made over their allotted times, but if you don’t agree with their request, they may not continue contact once their limitations have been reached.
A debt collector is not able to take or seize any of your property unless it is secured by the loan and the loan is in default. They are able to also get a court order against you to claim your property. They are unable to take any of your household items as they see fit and any attempt to is considered illegal.
Another one of your rights is to appoint another person such as a financial or debt counsellor to represent you in all dealings with the debt collector. This includes negotiations with the debt collector, which they must listen to and consider, just as if you were dealing with your creditors. My Credit Card Debt is able to help you, one of our financial counsellors is able to handle all communication with your debt counsellor, securing you more time, a better rate, a lower repayment and fairer treatment.
Recognising When A Debt Collector Has Breached Your Rights
Don't be bullied by debt collectors in Sydney, Melbourne Or Perth
If you are in a situation when you can’t keep up with their requests, some unprofessional debt collectors may turn to stand over tactics and blatant harassment to encourage you to pay your debt faster. You should contact the police if your debt collector does any of the following or similar to you throughout your contact with them:
Threaten yourself or anyone you know with any form of violence or harassment
Stop you from entering your home or vehicle
Use threatening or offensive language toward you
Contact you outside of the above mentioned hours
Present themselves as anyone other than who they are
Threaten to destroy your property
Threaten you with exaggerated claims in order to frighten you into paying
Forge any legal documents ordering you to pay
An unfortunate reality is that some debt collectors choose to prey on the disabled or misunderstood and may use their ignorance to their finances in order to make unreasonable or illegal requests, which breach the six rights we all have in these situations. It is their job to properly and accurately explain everything that is happening and why it is happening. If you feel a friend or relative may have been taken advantage of in this sense, you should also seek legal action as soon as possible.
The money smart website provides information about how to launch a complaint against your debt collector. This is information you can use to get you debt collector to not only stop this behavior but to get them into serious legal trouble.
You also need to make sure that the debt collector is being honest. This includes honesty with how much you owe with some debt collector asking for an increased price without you knowing to earn an extra buck. You need to make sure they can produce all document you require and don’t sneak in any fees.
There are also occasions where debt collectors chase you for debt that you don’t owe. You might have already paid off the debt or the amount they are saying you owe is more than you actually owe, with the debt collector claiming that you haven’t paid the amount you actually have paid. They also sometimes go after the wrong person, which means that you are able to easily produce any documentation that proves you don’t owe the debt. You can also seek damages if the debt collector continues to pursue you and you are forced to pay a financial counsellor to clear your name.
Coming To An agreement With A Debt Collector
The best way of dealing with a debt collector in Australia
At first, you may dispute that you owe the debt collector anything. Until the debt collector then sends you all relevant invoices and contracts to prove that you do, you should not make any agreements or involve yourself in conversation.
You may also dispute the exact amount of money that you owe. In order to fully understand why you owe what you do, you should request an itemised list of all credits as well as full details of each item so there is no ambiguity in the amount that is owed.
Once you have agreed on the amount you will then work towards making a repayment plan that suits your financial needs to live while taking care of your debt. Debt collectors may pressure you into paying before this, but refrain from paying anything until a written repayment contract has been formed and agreed upon by both parties. By doing so you are protecting yourself from overpaying your debt.
Waiting for written agreements is the first step in the note taking process which you should do very accurately throughout your dealings with a debt collector. Keep your own personal notes in regards to all forms of contact and matters discussed, as well as phone records to prove your perspective. Get as much information as you can from the collector including your reference number, summary of debts as well as their name and company they represent.
If Your Rights Are Breached
What to do if your rights are breached by a debt collector in Australia
At My Credit Card Debt we can help by negotiating on your behalf with your creditors and debt collectors to get you a better deal. If you feel the amount you are being asked to pay is unfair talk to us to get a fair deal. We deal with creditors every day, making sure that our customers get the best deal possible, while stopping the calls and the harassment of debt collectors. Call My Credit Card Debt on (02) 9011 7919.
If you believe that your debt collector has worked in an illegal matter in regards to settling your debt, you should seek immediate legal action. Two agencies can help you, the Australian Securities and Investment Commission (ASIC), which deals mainly in credit card debts and home loans and the Australian Competitors And Consumers Commission (ACCC) who mainly deal with unpaid bills.
My Credit Card Debt will help you settle your debts, getting you the best possible deal though negotiations with your creditors. We can get your debts payments or interest reduced and get you an extension on paying your debts. Contact us today to find out how! Call (02) 9011 7919 or fill out our form.