The ACCC has said it will be closely monitoring unethical debt collectors that are targeting small businesses in Australia, with the consumer watchdog concerned of what it labels ‘harassing’ debt collection practices.
The Australian Competition and Consumer Commission (ACCC) has said that small businesses are particularly vulnerable to unethical debt collectors.
This is, at least in part due to the fact that JobKeeper payments have stopped, and small business owners are feeling the crunch, as well as the end of debt deferral periods that were introduced at the beginning of the COVID-19 pandemic.
In light of these debt collection methods becoming more aggressive and manipulative, the ACCC is urging small business owners to be mindful of their rights under the law, while adding that the agency will be closely monitoring any debt collectors that have been reported to them.
The ACCC has created a web page for small business owners to report any unethical or dodgy debt collection practices, stating that “a debt collector must not mislead, harass, coerce or act unconscionably towards you.”
The ACCC’s Deputy Chair, Delia Rickard has told the NCA NewsWire said its campaign is designed to remind Australians that no matter the level of debt, the collector cannot legally behave in a coercive or harassive manner.
“You have a right to question the debt, whether or not you owe the debt and to demand evidence of it,” Rickard said, adding that “we are really concerned with any debt collecting practices which are harassing and ignore consumer rights.”
“We have taken action against several debt collection cases in recent years and we will not hesitate to take more,” Rickard added.
Unethical Debt Collectors Targeting Small Businesses in ACCC’s Sights
The ACCC is reminding the public that any information handed over to a debt collector must remain confidential, and that they are only able to contact members of the public during a specific set of hours.
Australian law states that if a debt is outstanding for longer than six years, a debt collector is unable to further pursue it; this stands at three years in the Northern Territory.
According to a report from News, “during the pandemic, many firms pledged not to pass on outstanding debt to third party collectors but Ms Rickard is concerned the tapering of support initiatives will prompt a rise in disputes.”
“We are expecting to see a real rise in debt collection issues,” the ACCC’s Deputy Chair said, adding that “if you are in financial difficulty, ask for a repayment plan, and the important thing there to remember is to get a repayment plan that you can actually meet.”
Before wrapping up her series of statements, Ms Rickard warned of the potential for harm from financial advisories that supposedly specialise in issues surrounding debt obligations. She said that the same advice can be obtained through the National Debt Hotline, or via a free financial counsellor.
“I would really be concerned about people who are already in financial difficulty getting themselves into greater difficulty using some of these for-profit schemes.”
Business owners that have come into contact with unethical debt collectors are being urged to contact the National Debt Hotline on 1800 007 007.