Debt collectors ACM Group have been found to have been engaged in deceptive and misleading conduct relating to two “vulnerable consumers” in cases brought forward by the ACCC and ASIC. The firm, which used methods of harassment and coercion including multiple telephone calls, false threats and misinformation, have now been put on notice as a direct result of their conduct, which was found to infringe on Australian Consumer Law by the Federal Court.
The ACCC said that between 2011 and 2015 ACM unfairly and inappropriately pursued two low-income consumers over defaults on their phone bills: debts that had been sold on to ACM by their service providers, including Telstra.
ACCC Commissioner Sarah Court said that the “conduct by ACM was particularly egregious, as it included ongoing harassment of a care facility resident who had difficulty communicating after suffering multiple strokes, as well as a Centrelink recipient who was falsely told their credit would be affected for up to seven years if they failed to pay immediately.”
Despite the debtors’ assets and income meaning that a judgement debt through the courts would be impossible, and despite knowing that they had “no means, or only limited means, to repay”, ACM repeatedly threatened legal action against them, including threatening bankruptcy, undoubtedly causing them undue stress.
“Lower-income groups suffer greater stress because of debt collection practices and have limited access to legal support, while creditors are using improper ways to escalate disputes,” Ms Court said. “One of the ACCC’s enduring enforcement priorities is taking action against conduct that impacts disadvantaged or vulnerable consumers”.
Gerard Brody, Consumer Action’s Director of Policy and Campaigns, said he was pleased that in the context of the legal action, ACM Group had revised its debt collection procedures significantly. He also implied that providers ought to have more responsibility towards their customers.
“Firms that sell debts to external collectors should have adequate controls to ensure those collectors abide by the law. If a consumer disputes a debt being sought by an external collector, firms should consider buying back debts so that consumers can fairly resolve complaints and disputes with the original creditor,” said Mr Brody.
More information on dealing with debt collectors: your rights and responsibilities.