Confessions of a debt collector


Sep 13, 2016 has posted an interesting article about the new look of the Debt Collection industry “DEBT collectors just want to help. That’s the message from the debt collection industry, which is on a public relations drive to overhaul its image in the minds of consumers.”

Most importantly, the Australian Collectors and Debt Buyers Association (ACDBA) says it just wants people to pick up the damn phone.

Alan Harries is the CEO of ACDBA and a 31-year veteran of the industry. He’s keen to dispel the stereotypes perpetuated by “movies and trashy TV shows” of debt collectors whose “knuckles drag on the ground when they walk”.

Gone are the days of knocking on doors. The bulk of the industry works out of professional call centres, and most debt collection is undertaken without any face-to-face contact.

“It costs a lot of money to send people out and knock on doors,” he said. “The industry is heavily regulated by ASIC and the ACCC, which limits the time frame collectors can speak with consumers.

“There’s no point knocking on most doors between 9am and 5pm.”

He said debt collection wasn’t about “hassling” consumers but “trying to resolve issues with meaningful communication”.

“None of us know what a consumer is facing in their own circumstances. They might have lost a job, gone through a divorce. There’s no way of knowing why an account hasn’t been paid until you talk to them.”

Mr Harries recalls delivering a summons for one of the big retail chains as a young man. “I knocked on this lady’s door in early January,” he said.

“Before I could say anything she said, ‘I know why you’re here, I’ve got family visiting for Christmas, can we go out to the garden.

“She asked me to give her the summons in the palm of my hand, she tucked it inside her bra and went inside. I don’t know what she told her family. People have their own way of dealing with issues.”

A recent report into the debt collection industry by the Australian Competition and Consumer Commission found few complaints compared with the number of interactions, although acknowledged there were still problems.

The ACCC found most complaints stemmed from disputes the customer had about the debt and not the conduct of the collection agency.

“The debt collection industry has made significant improvements in recent years,” ACCC Deputy Chair Delia Rickard said.

“Many in the industry clearly take their compliance obligations seriously and are committed to improving their reputation. However, this report shows there is room for further improvement.”

Some of the big issues still in the industry include additional fees tacked on by debt collection agencies, misleading threats of legal action for very small amounts and continued contact even when it’s clear the consumer is unable to pay.

The vast majority of accounts relate to electricity and telecommunications bills, and Mr Harries is scathing of existing hardship programs.

“Some individual operators do it well but generally those industries haven’t gotten their heads around how to best handle genuine hardship,” he said.

ACDBA has been trialling a pilot National Hardship Register, which voids debts for people determined by a financial counsellor to be in genuine or major hardship

Mr Harries says if a client is listed on the register, members will cease to make contact with them and not onsell the debt. If it’s a debt buyer or collector acting on behalf of a third party, they will make a recommendation to void the debt.

“Our experience is almost without exception they all accept the recommendation.”

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