The Australian Competition and Consumer Commission alleges ACM engaged in “misleading or deceptive conduct, harassment and coercion, and unconscionable conduct” in dealings with two consumers in contravention of the Australian Consumer Law (ACL) and/or the Australian Securities and Investments Commission (ASIC) Act.
In each case in the Federal Court involving the two consumers the debt being pursued by ACM had been sold to the firm by Telstra.
ACM purchases debts from companies, including telecommunications companies, utility companies and banks, and then attempts to recover all or part of the debt.
The ACCC alleges that ACM engaged in misleading or deceptive conduct by representing to:
• Both consumers that ACM was about to commence legal proceedings against them when this was not the case, and
• the second consumer that ACM was preparing to issue them with a summons when ACM was not planning to do so, and that failing to make an immediate payment to ACM would affect their ability to obtain credit for five to seven years when ACM did not have reasonable grounds to make that statement.
And, it is also alleged that ACM:
• Engaged in undue harassment by repeatedly contacting the first consumer by phone and letter when ACM was aware that he had difficulty communicating, was highly vulnerable and had no capacity to repay the debt, and
• Engaged in coercion by representing to the second consumer that ACM was going to take legal action or issue a summons and that failing to make an immediate payment to ACM would affect their ability to obtain credit for five to seven years.
The ACCC also alleged that ACM’s conduct in dealing with each of these consumers was, in all circumstances, unconscionable – and is seeking pecuniary penalties, declarations, injunctions, orders for an ACL compliance program, publication orders and costs.
ACCC chairman Rod Sims says conduct affecting vulnerable consumers is an enforcement priority for the commission.
“The ACCC has brought these proceedings because the alleged conduct by ACM, in seeking to recover debts ACM had purchased from Telstra, was in our view contrary to accepted community values and standards of fairness in dealing with consumers, especially those who are vulnerable.
“This action is part of our joint efforts with the Australian Securities and Investments Commission to improve debt collection practices.
“The ACCC has worked with debt collectors and businesses who assign debts, to ensure that collection activity complies with best practice and the law. We are now taking enforcement action to reinforce these efforts.”
In July 2014, the ACCC and ASIC released updated guidelines for debt collection firms regarding their contact with consumers and compliance with the law and, in December 2014, the ACCC released ‘Dealing with debt collectors: Your rights and responsibilities’, a guide that helps consumers in trouble with debt understand their options and how to deal with debt collectors and creditors.