What is Allowed and Not Allowed to Do during Debt Recovery?

by Andrew Thomas Debt Recovery Rules and Limitations Related

A call from a debt collector is a red flag that the matter has become serious, and the lender has availed debt recovery services for debt collection. Missed repayment on credit cards, home loans, car loans, education loans, etc., is very normal, but things turn into serious affairs when this is done deliberately and continuously for months. Overdue debts can be overwhelming and stressful for a company or the lender, and in this situation, he has all the right to seek debt collection services.

The professionals from the collection agency will call you initially, and your role is to be assured about what they are allowed to do. We have developed a guide that reveals everything about debt collectors and ways to deal with them.

Who Are Debt Collectors?

Debt collectors are individuals or agencies offering debt collection and recovery services to companies, agencies, institutions and independent financiers. They can provide a wide range of services by working with a creditor, service provider or debt collection agency. These people can contact you in case of outstanding debts and have multiple rights to exercise during the debt collection services. They can contact you for the following reasons –

• Make A Demand For Payment Of A Debt

• Make An Arrangement For Repayment

• Find Out Why An Agreed Repayment Plan Has Not Been Met

• Review A Repayment Plan After An Agreed Period Of Time

• Inspect Or Recover Mortgaged Goods

The government has strict laws to govern the functioning of these debt recovery experts and agencies.

What Are Debt Recovery Experts Allowed To Do?

Their primary responsibility is to contact you regarding debt or loan recovery. This contact can be made via phone, letter, email, social media or by visiting your office or home personally. Some limitations have to be followed, and we have discussed them below.

Contact Through Phone

• Debt recovery experts can call you up to three times a week.

• They can call you between 7:30 am and 9:00 pm on weekdays and between 9:00 am and 9:00 pm during weekends.

Contact In Person

• They can contact you personally between 9:00 am and 9:00 pm, seven days a week.

• Visiting the home should be done only if repayment arrangements fail to work via phone and email.

• Your complete consent will be required to meet you personally during debt recovery services.

Contact Via Social Media And Email

Debt recovery experts can use these communication methods while ensuring that private data and privacy is not breached. They must stay completely silent on public holidays and not contact you. Apart from this, they also have to keep a record of the entire communication with the debtor.

What Are Debt Recovery Experts Not Allowed To Do?

Upon failing to abide by the debt collection laws, they will have to face questions from the Australian Security And Investment Commission and Australian Competition And Consumer Commission. They must comply with the rules created by the Commonwealth Consumer Protection Laws and Australian Consumer Law. The Australian Security And Investment Commission Act 2001 and National Consumer Credit Protection Act 2009 govern the debt collection industry. These laws have strict guidelines on what these debt recovery experts must not do. Here is a quick list.

• Use any physical force or coercion

• Harass you to an unreasonable point

• Provide you with misleading information

• Make false statements or try to deceive you

• Trespass on your property, threaten or intimate you

• Verbally abuse you

• Take unfair advantage of any vulnerability or disability

You can raise your concern with the Australian Securities and Investment Commission and Australian Competition and Consumer Commission if you find them breaking the laws or not complying with the guidelines.

Can Debt Recovery Experts Contact By Family Members?

The Australian Consumer Law states that they are not allowed to threaten or use any physical force in the debt collection process. The same law states that they should not meet your family member or attempt to contact them or any third party related to you. They only reserve the right to contact your family member, friend or any third party to obtain your latest location information. However, they are not allowed to reveal the identity of a debt collector during this communication. Additionally, they should not share your private or financial information with the person they are contacting.

They can discuss your debt only with your lawyer or your spouse. They breach the consumer’s rights by revealing anything about debt with any third party without your permission or consent. During face-to-face visits, they must respect your privacy and ensure that the debt is not discussed before your family members, friends or third parties like neighbours.

What Is The Best Way To Deal With Debt Recovery Services?

As a debtor, you must cooperate with them while ensuring that they comply with the laws and guidelines.

• You must be respectful, and in turn, the experts should also be compliant during communication.

• You need to be honest about your debt and your financial situation.

• Timely response to all their communication is another impressive way of dealing with them and making the process easier for both parties.