ABN 74 010 230 716
Licence No. CAP1008674 ACL 388442
www.collectionhouse.com.au
Level 7, 515 St Paul’s Terrace
Fortitude Valley Qld 4006
PO Box 2247, Fortitude Valley BC Qld 4006
Phone <07> 3292 1000
Fax <07> 3832 0222
bne.office@collectionhouse.com.au
2 December 2011
Debt Collection Consultation
Consumer Affairs Victoria
Policy and Legislation Branch
GPO Box 123
Melbourne VIC 3001
By email: debt.collection@justice.vic.gov.au
Dear Sir
DEBT COLLECTION HARMONISATION – OPTIONS PAPER
Collection House Limited (CLH) is a listed public company providing a range of debt
collection services including contingent collections (commission based collections),
receivables management and related services.
CLH has a number of wholly owned subsidiaries including Lion Finance Pty Ltd (LF)
(debt buyer) and Midstate Credit Management Services Pty Ltd (MCMS) (contingent
debt collector) also participating in the debt collection industry in Australia.
Currently,

CLH is a licensed debt collection agency in all states of Australia, except in
Victoria where mandatory exclusionary requirements apply;

MCMS is a licensed debt collection agent in New South Wales and operates in
Victoria under mandatory exclusion requirements;

CLH, LF and MCMS and each of them hold an Australian Credit Licence.
The Collection House Group of companies comprising CLH, LF and MCMS (individually
and collectively Collection House) wish to respond to the Debt Collection
Harmonisation Regulation Options Paper.
RESPONSE
Collection House welcomes and generally supports the harmonisation of debt collection
regulations, licensing and regulators across all States and Territories of Australia on the
basis that the harmonisation provides for uniform and consistent legislation, laws and
codes of conduct for all business entities and persons conducting debt collection
activities including creditors, licensed credit providers (deemed or otherwise under
existing legislation), debt collectors, debt buyers, factors and government.
Queensland
Document1
New South Wales
Victoria
South Australia
New Zealand
This response will endeavour to address the harmonisation of debt collection regulation
in Australia under the following areas, which we consider to be in the best interests of
creditors, debt collectors, debt buyers, consumers, regulators and the industry as a
whole:

Collection House recommendations

Response to options + support of recommendations

Annexure A – Terminology – scope of the debt collection industry in Australia
COLLECTION HOUSE RECOMMENDATIONS
We recommend a uniform and consistent Australian Debt Collection model to replace
all State and Territory legislation and licensing regimes, that addresses the following
key elements and concepts:
1.
A separate national legislative instrument be enacted specifically for the Debt
Collection industry – suggested title being the National Debt Collection Act.
2.
An Australian Debt Collection Licence is a licence that authorises the Licensee
to engage in Debt Collection under the National Debt Collection legislation
(Licence).
3.
A Debt Collector must not engage in Debt Collection if the Debt Collector does not
hold a current Licence authorising the Debt Collector to engage in Debt
Collection.
4.
An Australian Debt Collection Licence granted to a Debt Collector may be subject
to any conditions that the Regulator requires.
For example:
(a)
The Licensee must comply with its obligations under the National Debt
Collection legislation, including conduct obligations.
(b)
The Licensee and its nominated Responsible Managers are responsible for
the acts or omissions of the Licensee’s Collection Officers and employees
who engage in Debt Collection activities.
(c)
The Licensee must ensure that:
i.
Each Collection Officer of the Licensee is adequately trained to a
Certificate III in Mercantile Agents (FNS30410) level within the first 1218 months of the Licence being issued or of the Collection Officer
commencing employment with the Licensee;
ii.
Each Responsible Manager of the Licensee is adequately trained to a
Certificate IV in Frontline Management (BSB40807) level or another
general relevant higher level qualification within the first 12-18 months
of the Licence being issued or of the Responsible Manager
commencing employment with the Licensee; and
2
iii.
(d)
The Licensee must establish an internal dispute resolution (IDR) system
that meets the standards or requirements (AS ISO 10002 Complaint
Handling) made or approved by the Regulator (ASIC Class Order [CO
10/250]).
(e)
The Licensee must become, and continue to be, a member of an authorised
external dispute resolution (EDR) scheme.
(f)
If the Licensee ceases to be, or becomes aware that it will cease to be, a
member of an approved external dispute resolution (EDR) scheme, the
Licensee must, within five (5) business days of becoming aware of the
same:
(g)
5.
6.
Each Responsible Manager of the Licensee undertakes at least 10
hours of continuing professional development in each calendar year in
which they perform the role of Responsible Manager for the Licensee.
i.
Notify the Regulator in writing; and
ii.
Advise the Regulator of its new EDR Scheme.
The Licensee must maintain a trust account in accordance with the National
Debt Collection legislation including:
i.
Appointing an independent auditor;
ii.
Annually auditing the trust account; and
iii.
Providing a copy of the trust account audit report to the Regulator
within 3 months of the audit being completed by the independent
auditor.
(h)
The Licensee must maintain a fidelity insurance policy that is adequate in
terms of its amount, scope and other terms in accordance with the
insurance requirements for Debt Collection activities.
(i)
The Licensee must conduct Debt Collection activities in compliance with the
Australian Securities and Investments Commissions Regulatory Guide 96:
Debt collection guidelines: for collectors and creditors and the National Debt
Collection Act and regulations.
A Debt Collector must not engage in Face to Face Debt Collection if the Debt
Collector does not hold:
(a)
an Australian Debt Collection Licence to engage in Debt Collection; and
(b)
a Securities Legislation Licence for the relevant jurisdiction or jurisdictions to
engage in Face to Face Debt Collection.
For the purposes of Recommendation 3, a Fit and Proper Person or a Collection
Officer does not require to hold a current Australian Debt Collection Licence or
otherwise to engage in Debt Collection if:
(a)
the Fit and Proper Person or a Collection Officer engages in Contingent
Debt Collection on behalf of another person (the principal); and
3
7.
(b)
the Fit and Proper Person or a Collection Officer is a Fit and Proper Person
or a Collection Officer of the principal or of a related body corporate of the
principal; and
(c)
the Fit and Proper Person’s or a Collection Officer’s conduct in engaging in
the Debt Collection is with the authority of the principal; and
(d)
the principal holds a Licence authorising the principal to engage in Debt
Collection.
For the purposes of Recommendation 6, a principal Debt Collector must ensure
that a Collection Officer who conducts Debt Collection is compliant with the
training and competency conditions of the principal’s licence.
For example, the principal/Debt Collector may be required to ensure that the
Collection Officer is adequately trained to a Certificate III in Mercantile Agents
(FNS30410) level within the first 12-18 months of the principal obtaining its
Licence or of the Collection Officer commencing employment with the principal.
8.
A person who is a Responsible Manager must not engage in Debt Collection
activities if the Responsible Manager does not hold a current sub-licence
authorising the Responsible Manager to engage in Debt Collection activities. A
sub-licence may contain any conditions that the Regulator deems fit.
9.
A Debt Collector must ensure that its Responsible Managers are sub-licensed
and that they are compliant with the conditions of the Licence including training
and competency requirements.
For example, a sub-licensed Responsible Manager must be adequately trained to
a Certificate IV in Frontline Management (BSB40807) level or another general
relevant higher level qualification within 12-18 months of the Debt Collector
obtaining its Licence or of the Responsible Manager commencing employment
with the Debtor Collector and that each Responsible Manager undertakes at least
10 hours of continuing professional development in each calendar year during the
currency of the Licence and sub-licence.
10.
Under the National Debt Collection legislation, a licensed Debt Collector and the
Debt Collectors nominated Responsible Managers are responsible for the acts or
omissions of the Licensee’s Collection Officers and employees who engage in
Debt Collection activities.
11.
A Debt Collector must maintain an internal dispute resolution (IDR) system that
meets the standards or requirements (AS ISO 10002 Complaint Handling) made
or approved by the Regulator (ASIC Class Order [CO 10/250]).
12.
A Debt Collector must become, and continue to be, a member of an authorised
external dispute resolution (EDR) scheme during the currency of the Licence.
13.
A Debt Collector who conducts Debt Collection activities must maintain a trust
account in accordance with the National Debt Collection legislation including, but
not limited to:
(a)
Appointing an independent auditor;
(b)
Annually auditing the trust account; and
4
(c)
Providing a copy of the trust account audit report to the Regulator within 3
months of the audit being completed by the independent auditor.
14.
A Debt Collector who conducts Debt Collection activities must maintain a fidelity
insurance policy that is adequate in terms of its amount, scope and other terms in
accordance with the insurance requirements for Debt Collection activities.
15.
A Debt Collector must ensure that its Responsible Managers, its Collection
Officers or any employees that conduct Debt Collection activities comply with the
National Debt Collection legislation, the Australian Securities and Investments
Commissions Regulatory Guide 96: Debt collection guidelines: for collectors and
creditors together with any other Regulatory Guide issued or prescribed by the
Regulator.
16.
The Regulator is the Administrator of the National Debt Collection regulations. As
a significant proportion of Debt Collection is carried out for Licensed Credit
Providers, the Regulator should be the Australian Securities and Investments
Commission (ASIC) rather than the task be split with the Australian Competition
and Consumer Commission (ACCC).
17.
The Debt Collector is required to provide information to Debtors within the
confines of the existing legislative requirements.
18.
“For profit” agencies that claim they can facilitate “repair credit” or “restore credit
ratings” or purport to act as “advocates for Consumers” to, among other things,
(a)
remove any payment default[s] or judgment default[s] from credit reporting
agencies; or
(b)
negotiate an informal settlement or an informal arrangement (not being a
Part X or Part IX arrangement under the Bankruptcy Act),
be licensed and subject to appropriate uniform legislation, regulations, conduct
obligations, trust obligations and fidelity insurance requirements, at least
equivalent to that proposed for Debt Collectors.
RESPONSE TO OPTIONS + SUPPORT OF RECOMMENDATIONS
Licensing Options
Collection House’s preferred option is Option 5: Deemed licensing via the National
Consumer Credit Protection Act (National Credit Act) or a separate national licensing
regime. Our submission supports the creation of a new legislative instrument (National
Debt Collection) as the best method for achieving harmonisation for the industry.
Currently, no State or Territory has enacted legislation that is specifically designed for
the debt collection industry. Rather, it is contained in a myriad of inconsistent State and
Territory based legislation including the Security Legislation.
We submit that the Security Legislation is not suitable for legislating Debt Collectors, as
the Security Legislation’s primary function is to regulate the security industry.
Accordingly, it is currently an imperfect solution to regulate a different industry.
5
We submit that the Debt Collection industry and Debt Collection has developed and
continues to grow as a specialised profession. Debt Collection should not embrace
Face to Face Collections as part of its core business activities.
We submit that in order to best achieve harmonisation, and at the same time resolve
and replace the existing inconsistent State and Territory legislation issues currently
experienced by Debt Collectors, that new national legislation (National Debt Collection)
should be specifically drafted for the Debt Collection industry (Recommendation 1).
We have recommended that Debt Collectors must not engage in Debt Collection
activities unless they are licensed (Australian Debt Collection Licence – ADCL) to
conduct Debt Collection activities (Recommendations 2 and 3).
We have submitted that the Regulator should be able to place any appropriate
conditions on granting an ADCL (Recommendation 4), such as: the proper conduct
obligations; internal dispute resolution requirements; and mandatory external dispute
resolution requirements; (we have been member of FOS/ BFSO since 2005).
We consider that modern Debt Collection activities do not and should not include Face
to Face Debt Collection activities (Recommendation 5). Accordingly, for convenience
and simplicity, Debt Collection should exclude Face to Face Collection.
Collection House submits that any Debt Collector, Responsible Manager or Collection
Officer that performs Face to Face Debt Collection activities should (besides holding an
ADCL or a sub-licence) also be required to comply with the licensing obligations under
the existing Security Legislation in the relevant jurisdiction or jurisdictions of their
operations (Recommendation 5). This extra licensing requirement is premised on the
Face to Face interaction with Debtors. As Face to Face Debt Collection activities
necessitate direct contact with a Debtor, we submit that further identification
requirements, such as those contained in the Securities Legislation, is warranted for
any Debt Collector that conducts Face to Face Debt Collection activities.
Similar to the provisions of the National Credit Code, we have recommended that
Collection Officers of Debt Collectors are not required to be licensed if conducting nonface to face Debt Collection activities (Recommendation 6). This exclusion already
exists under the PAMDA legislation in Queensland.
The only exception that we consider reasonable would be when a Debtor attends a
Debt Collector’s place of business to make a payment of the Debt or part thereof. In
that circumstance, the exception should permit a Responsible Manager and a Collection
Officer to be present together, at the same time as the Debtor is present, to record and
receipt the payment of the Debt.
While Collection Officers should not be required to be licensed to conduct Debt
Collection activities, the Debt Collector, as the Collection Officer’s principal, is
responsible for the training and competency of the Collection Officer, within a certain
timeframe (Recommendation 7).
However, unlike the National Credit Code, we have recommended that Responsible
Managers of Debt Collectors are required to obtain a sub-licence to conduct Debt
Collection activities. Further, the Regulator may place any appropriate condition on a
sub-licence that the Regulator requires (Recommendation 8).
Similar to Recommendation 7, a Debt Collector must ensure that its Responsible
Managers are sub-licensed, and that they are adequately trained and continue to
6
receive continuing professional
(Recommendation 9).
development
training
each
calendar
year
We further recommend that a licensed Debt Collectors and the Debt Collector’s
nominated Responsible Managers are to be responsible for the acts or omissions of
Collection Officers and employees who engage in Debt Collection activities
(Recommendation 10).
Conduct Options
Collection House’s preferred option is a combination of both Option 3: Mandatory
prescribed code and Option 4: Legislative provisions.
Collection House agrees with Consumer Affairs Victoria and submits that an excellent
start for a mandatory code of conduct for Debt Collectors would be the Australian
Securities and Investments Commission’s Regulatory Guide 96: Debt collection
guidelines: for collectors and creditors (RG 96).
This publication has been used and is well understood by Debt Collectors since its
release in October 2005. Further, it is well understood by Entities across business and
consumer groups.
We have recommended that a Debt Collector must ensure that its Responsible
Managers, Collection Officers and any employees that conduct Debt Collection
activities comply with RG 96 (Recommendation 15). The Regulator could place a
similar compliance condition on an ADCL or a sub-licence (Recommendations 4 and 8).
Collection House submits that the conduct obligations should be legislated with a
section of the National Debt Collection legislation in similar terms to that of section 47(1)
- general conduct obligations of licensees, under the National Credit Act. For example,
the National Debt Collection legislation could prescribe (based on the requirements of
s47 NCA) that:
(1)
A Licensee must:
(a)
do all things necessary to ensure that Debt Collection activities authorised
by the licence are engaged in efficiently, honestly and fairly; and
(b)
have in place adequate arrangements to ensure that clients of the Licensee
are not disadvantaged by any conflict of interest that may arise wholly or
partly in relation to Debt Collection activities engaged in by the licensee or
its Collection Officers; and
(c)
comply with the conditions on the Licence; and
(d)
comply with the National Debt Collection legislation; and
(e)
take reasonable steps to ensure that its employees comply with the National
Debt Collection legislation; and
(f)
maintain the competence to engage in the Debt Collection activities
authorised by the Licence; and
7
(g)
ensure that its employees are adequately trained and are and remain
competent, to engage in Debt Collection activities authorised by the
Licence; and
(h)
maintain internal dispute resolution procedures; and
(i)
be a member of an approved external dispute resolution scheme; and
(j)
comply with any other obligations that are prescribed by the regulations.
Legislating good conduct obligations such as the above examples will provide both the
Debtor and Debt Collector with a greater understanding, accountability, clarity and
consistency of how Debt Collection activities are to be undertaken.
Consumer Advocate Conduct Obligations
It is our experience, that “not for profit” organisations that assist Debtors in the
resolution of their Debts operate in an ethical and fair manner in their negotiations with
Collection House. We also note that currently, parties carrying on Part IX and Part X
Arrangements are regulated.
However, the “for profit” agencies that proclaim that they “repair credit” or “restore credit
ratings” or are “advocates for Consumers” or claim that they can remove any payment
default[s] or judgment default[s] from credit reporting agencies, or can negotiate an
informal settlement or an informal arrangement (not being a Part X or Part IX
arrangement under the Bankruptcy Act), are not regulated.
These types of
organisations cause Creditors, Debt Collectors and Debt Buyers much concern, cost
and delay in the debt recovery process, to the extent that often, the representations of
these groups to Debtors are potentially misleading and false and could be interpreted
as an abuse of process.
We note that ASIC is aware of the various methods that these groups use to avoid
regulation and achieve a “fee” for their service. Collection House submits that “for
profit” businesses of this type, that purport to operate as advocates for Debtors in the
Debt Collection process must be subject to the licensing obligations under the National
Debt Collection legislation and/or be made to comply with the good conduct obligations
and be accountable for their actions (Recommendation 18).
Trust Accounting Options
Collection House’s preferred option is not an Option provided by Consumer Affairs
Victoria. Accordingly, we submit the following Option.
Collection House submits that the actual reality of the Trust Account options is that
Contingent Clients will require Debt Collectors to ensure that collected money is not to
be mixed funds and accordingly, must be put directly into a trust account or an account
where the collected money is readily identifiable as money belonging to the
client/creditor.
We do not propose a statutory trust for each client/creditor, rather as identified above,
an account named as Debt Collector client/creditor trust account. We also submit that
trust accounts, howsoever named, should be audited at least once per year.
Collection House notes that trust accounting requirements vary widely, as and between
the States and the Territories. We submit that national harmonisation would be
8
incomplete if the trust requirements were not stipulated in the National Debt Collection
legislation.
We have recommended that the Regulator should impose a single, national system for
trust accounting. Accordingly, we submit that a Debt Collector conducting Debt
Collection activities must maintain a trust account in accordance with the National Debt
Collection legislation (Recommendation 13).
We submit that the trust account requirements, for Commercial Agents under Chapter
12 of the Property and Motor Dealers Act 2000 in Queensland, are sufficiently robust
and complete to be considered for the National Debt Collection legislation. This
legislation provides, among other things, the following:

Part 1 – Division 1 – trust accounts – application to Licensees;
o
Division 2 – Opening trust accounts – notice to regulator required whether
opening, closing, or renaming;
o
Division 3 – Dealing with trust money;
o


Subdivision 1 – Payments into trust accounts, receipts, investments
and restrictions;

Subdivision2 – payments, when permitted;

Subdivision 3 – accounting to clients;
Division 4 – disputes about trust moneys;
Part 2 – Audit requirements;
o
Division 2 – provision about auditors, appointment and duration;
o
Division 3 – audit of trust accounts, timing, requirements, reporting

Part 3 – Claim fund, establishment, application and agreement with financial
institutions;

Part 4 – Freezing trust accounts and appointing receivers and special
investigations.
We also submit that the National Debt Collection legislation should stipulate that Debt
Collectors are required to have adequate insurances in place that a prudent business
operator would have when conducting Debt Collection activities including receiving
monies, holding and disbursing to the client or as otherwise directed.
Which policies are prudent, and the limit of indemnity provided under each insurance
policy, should be determined by the Debt Collector. However, we recommend that each
Debt Collector keep, and maintain, a fidelity insurance policy providing indemnity for
$20,000, to redress any fraud occurring against a debtor when making a payment into a
trust account.
We recommend that a Debt Collector must maintain a fidelity insurance policy that is
adequate in terms of its amount, scope and other terms in accordance with the
insurance requirements for Debt Collection activities (Recommendation 14).
9
Complaints Handling Options
Collection House’s preferred option is a combination of both Option 2: Mandatory
membership of EDR Scheme and Option 3: Mandatory internal dispute resolution.
We submit that the complaints handling requirements under the National Credit Act be
adopted for the National Debt Collection legislation. That is, a licensed Debt Collector
must maintain an internal complaints handling process based on Australian Standards
(Recommendation 11), together with the Debt Collector becoming and continuing to be
a member of an approved External Dispute Resolution Scheme (EDRS)
(Recommendation 12).
In relation to EDRS, we submit that the Regulator ensure that the terms of reference for
different EDRS are standardised as and between the providers, including but not limited
to, the Financial Ombudsman Services, the Credit Ombudsman Service Limited, the
Telecommunications Ombudsman, the Energy and Water Ombudsman, the
Ombudsman Services and any other responsible Ombudsman for any of the Entities.
Finally, it is our experience that many Consumers do not bring their complaint to the
attention of our internal dispute resolution process before seeking the EDRS
assistance. Accordingly, we submit that the terms of reference include a requirement
on the EDRS provider to ensure that the Debt Collector is first given the opportunity to
resolve any complaint, before incurring a non-recoverable cost under an EDRS.
Administration Options
Collection House’s preferred option is Option 2: Transfer administration to a dedicated
debt collection regulator.
We submit that the Regulator, the Australian Securities and Investments Commission
(ASIC), be the Administrator of the National Debt Collection legislation as its dedicated
debt collection regulator. We submit that the greater proportion of Debt Collection
carried out in Australia relates to Licensed Credit Providers and their Credit related
products (the Credit Industry). The Credit Industry is regulated by ASIC.
Debt Collection is intrinsically connected to the Credit Industry. Accordingly, we submit
that the most appropriate Regulator would be ASIC (Recommendation 16).
Information Standards Options
Collection House’s preferred option is Option 1: the Status quo.
Collection House submits that in its experience, the majority of debts that are purchased
do not contain up to date demographic information of the Debtors. Upon assignment, a
notice of assignment is sent to the Debtor’s last known address that they provided the
Entity. Often, Debt Buyers are required to resend this document upon locating the
Debtor.
We do not support Option 2: standardised and prescribed information, becoming a
requirement. Primarily, the information that is to be prescribed, would, in a majority of
cases be sent to an invalid address for the Debtor. Thus, while the Debt Collector may
be complying with this obligation, the Debtor would not benefit from the prescribed
information. Thus, strict compliance with this option would frustrate the goal of the
option.
10
We do not support Option 3: mandatory disclosure upon request, becoming a
requirement. For the same reasons given above relating to Option 2, a mandatory
requirement to send out information would be frustrated by the invalid addresses of the
Debtors.
We submit under the current legislative provisions, a Debtor can request information
relating to the Debtor’s liability and indebtedness at any point in time. We submit if
anything, that mirroring legislation to section 38 of the National Credit Code be
replicated in the National Debt Collection legislation.
Educational Requirements Options
Collection House’s preferred option is Option 2: Modernise and harmonise statutory
training standards.
We submit that as the industry inescapably grows as a specialised profession, so to
does the requirement of Debt Collectors to properly educate, train and maintain
Collection Officer’s qualifications to compliantly, effectively, efficiently and ethically
collect debts.
We submit that Collection Officers must obtain a Certificate III in Mercantile Agents
(FNS30410) within 12-18 months of the Debt Collector being licensed or the Collection
Officer commencing employment with the Debt Collector (Recommendation 7).
During the intervening period, a Collection Officer should still be able to conduct Debt
Collection activities provided that they are adequately supervised by a licensed
Responsible Manager.
We also submit that Responsible Managers must be adequately trained to a Certificate
IV in Frontline Management (BSB40807) level or another general relevant higher level
qualification within 12-18 months of the Debt Collector becoming licensed or of the
Responsible Manager commencing employment with the Debt Collector
(Recommendation 9).
We submit that it should be the Debt Collector’s obligation to ensure that its:

Responsible Managers are sub-licensed;

Responsible Managers and Collection Officers are adequately trained within the
timeframes and constraints of the Debt Collectors’ Australian Debt Collection
Licence and the National Debt Collection legislation; and

Responsible Managers undertake at least 10 hours of continuing professional
development in each calendar year.
ANNEXURE A – TERMINOLOGY – SCOPE OF THE DEBT COLLECTION INDUSTRY
IN AUSTRALIA
In addition to our recommendations and response to the options, we attach by way of
Annexure A, our definitions of certain terminology used in the debt collection industry in
Australia.
In our experience, the terminology is often not fully understood or misused by
commentators in the industry.
11
Our recommendations and response to the options are based on the terminology set
out in Annexure A and may be useful in any subsequent documents developed by
Consumer Affairs Victoria or the Ministerial Council of Consumer Affairs in the
harmonisation process.
CONCLUSION
For many years, Collection House has actively promoted the concept (now referred to
as “harmonisation”) of there being uniform and consistent legislation, laws and codes of
conduct across the debt collection industry in Australia.
We look forward to the development of the harmonisation of debt collection regulations
in Australia that meets that objective.
We would be pleased to participate in any further consultation or meeting with
Consumer Affairs Victoria or the Ministerial Council of Consumer Affairs in relation to
progressing the harmonisation of debt collection regulation in Australia.
Yours sincerely
COLLECTION HOUSE LIMITED
MATTHEW THOMAS
CHIEF EXECUTIVE OFFICER
12
ANNEXURE A –
TERMINOLOGY – SCOPE OF THE DEBT COLLECTION INDUSTRY IN AUSTRALIA
(used throughout this Submission and could potentially be adopted for National Debt
Collection)
Active Debts means active, current and performing Debts that are not Distressed
Debts.
Australian Debt Collection Licence means a licence issued under National Debt
Collection legislation that permits a Debt Collector to carry on Debt Collection.
Collection Officer means the employee of a Debt Collector.
Consumer means a natural person or a strata corporation.
Control has the meaning given by section 50AA of the Corporations Act (Cwlth) 2001.
Credit means credit is provided if:
(a)
payment of a Debt owed by a Debtor to an Entity is deferred; or
(b)
the Debtor incurs a deferred Debt to an Entity.
Credit Contract means a contract under which Credit is or may be provided (regulated
or otherwise).
Creditor means the original Creditor who provided Credit to the Debtor including any
governmental agencies, government owned corporations, utilities (power or water),
telecommunication providers, private or commercial businesses, individuals or insurers.
Debt means Active Debts, Distressed Debts and/or an amount of money owed or
alleged owed, where:
(a)
the Debtor is in default under the terms and conditions of the provision of Credit or
a Credit Contract; or
(b)
the Debtor is in default under the terms and conditions of the provision of Credit or
a Credit Contract and the Entity has declined the provision of further Credit to the
Debtor; or
(c)
the Entity has terminated, cancelled, written off or charged off the Debt, by reason
of the Debtor’s default or continuing default in repaying the money under the
terms and conditions of the provision of Credit or a Credit Contract.
Debt Buyer means an Entity that purchases a Creditor’s or a Licensed Credit
Provider’s Debt at a discount, making a profit if the amount recovered exceeds the
purchase price of the Debt and the cost of collection.
Debt Collection means providing debt collection activities that involves contact with the
Debtor by and through telecommunications, e-communications, correspondence and by
commencing Court proceedings to recover Debts from Debtors, but does not include
Face to Face Collections with a Debtor. It includes:
13
(a)
In-house Collections meaning an Entity that conducts in-house collection of its
Debts.
(b)
Contingent Debt Collections meaning a Debt Collector acting as an outsourced
collection agent for an Entity.
(c)
Purchased Debt Collections meaning a Debt Collector conducting in-house
collections or acting as an outsourced collection agent for a Debt Buyer.
Debt Collector means a person who, in the ordinary course of business provides Debt
Collection activities to or for Entities including Creditors, Licensed Credit Providers,
Factors, Debt Buyers, in-house collections, receivables management companies,
assignees, outsourced collection agents (contingent debt collectors paid either a flat fee
for pursuing overdue accounts, or a commission based on the amount of money
recovered), lawyers and Australian government bodies.
Debtor means a person, a company or a Consumer that owes a Debt to an Entity.
Distressed Debts means inactive, terminated, cancelled, non-performing, written off
and/or charged off Debts of an Entity.
Entity means a person, partnership, company or trust and includes:

Creditor

Debt Buyer

Factor

Licensed Credit Provider
Face to Face Collections means, when providing Debt Collection activities, collection
methods that include field calls, repossessions, process serving or other personal
contact with Debtors, where an essential part of recovering the Debt is face to face
contact with the Debtor, either by attending a place of residence or other place,
including a place of employment.
Factor means a person or a company that provides cash flow finance to a Creditor in
exchange for the absolute assignment of an Active Debt at a discount, making a profit if
the amount recovered exceeds the purchase price of the Debt and the cost of
collection.
Fit and Proper Person (for Debt Collection) means where the Debt Collector is a body
corporate, each active director of the body corporate who performs management duties
or exercises control in connection with the Debt Collection activities of a Debt Collector.
Licence means an Australian Debt Collection Licence or any sub-licence.
Licensed Credit Provider means a person or a company that provides Consumer
Credit to Debtors, and includes a prospective Consumer Credit provider (taken and
modified from section 204 of National Credit Code).
Licensee means the person holding a current Australian Debt Collection Licence.
National Credit Act means the National Consumer Credit Protection Act (Cwlth) 2009.
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National Credit Code means Schedule 1 to the National Credit Act.
National Debt Collection means a single, standard, national regulation of Debt
Collection for Australia.
Regulator means the Australian Securities and Investments Commission.
Responsible Manager for Debt Collection means the following people or subset of
people:
(a)
where the Debt Collector is a single director or natural person, the single director
or the natural person; or
(b)
where the Debt Collector is a body corporate, each Senior Manager of the body
corporate involved in Debt Collection activities; or
(c)
where the Debt Collector is a partnership or the trustees of a trust, each partner or
trustee; or
(d)
where a person employed by a Debt Collector supervises or manages more than
10 Collection Officers.
Securities Legislation means the Security and Investigation Agents Act (SA) 1995; or
the Security and Investigation Agent Act (Tas) 2002; or the Commercial Agents and
Private Inquiry Act (NSW) 2004; or the Commercial and Private Agents Licensing Act
(NT); or the Private Security Act (Vic) 2004; or the Security Providers Act (Qld) 1993; or
the Security and Related Activities (control) Act (WA) 1996, for each jurisdiction as the
case may be.
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