Debt warning for North East consumers after ACCC legal action

North East residents are being urged to seek advice before paying or acknowledging a debt, after Australia’s consumer watchdog launched Federal Court action over more than 320,000 allegedly misleading debt enforcement notices. The ACCC has commenced proceedings against debt collection agency ARMA Group Holdings Pty Ltd and legal practice Force Legal Pty Ltd, alleging the related companies sent notices to consumers by email, letter or text message that misrepresented debts, possible legal action and the consequences of non-payment. Hume Riverina Community Legal Service principal lawyer, civil law practice Deborah Fisher said misleading or aggressive debt collection was not an abstract issue for Wangaratta and the broader North East. “We see people every day who are impacted by aggressive debt collection practices, causing stress, anxiety, and increased financial hardship,” Ms Fisher said. “This in turn can affect people’s relationships, their housing and their health.” Ms Fisher said people who did not know their rights or the legal protections available to them could be vulnerable to poor debt collection practices. “When people are unaware of their legal rights or the protections that the law offers then they are vulnerable to these sort of practices and may end up feeling burdened, stressed and paying debts that they were not legally obligated to,” she said. The ACCC alleges ARMA and Force Legal sent misleading notices over more than three and a half years, including communications which represented that a debt was due and required payment when it was no longer outstanding or was past the statutory limitation period. The consumer watchdog also alleges Force Legal sent letters containing misrepresentations about escalation steps and potential consequences of non-payment. Ms Fisher said North East consumers should be cautious about any debt communication that seemed to arrive “out of the blue”, related to something they thought had been resolved, or concerned a debt they did not believe they were responsible for or simply cannot afford to pay. “If you receive any communication threatening legal action or debt or enforcement, including the Sheriff coming to your property to seize goods, please call a financial counsellor or a lawyer,” she said. The ACCC alleges Force Legal communications misleadingly conveyed that it had instructions to start legal action when it had not received such instructions, that it was independent of ARMA when it was a related body corporate, that payments could be deducted from pay without a court hearing and that consumers would have to pay all legal costs and interest. The ACCC said ARMA and Force Legal were enforcing debts for many well-known private and public companies, including gyms, energy and telecommunications companies, education providers, health and medical providers, funeral providers, a streaming service and a transport provider. It is not alleging ARMA’s clients breached Australian Consumer Law, or were complicit in, or aware of, the conduct. “If anyone is unsure about any debt collection demands or practices, they should seek immediate financial and legal advice - before making any payment and before acknowledging any debt,” Ms Fisher said. Ms Fisher said people could contact the National Debt Hotline on 1300 771 741. Local services including Hume Riverina Community Legal Service and Upper Murray Family Care financial counselling may also be able to provide advice and assistance, subject to capacity restraints. She also pointed people to UMFC financial counselling on 02 6055 8000, Victoria Legal Aid on 1300 792 387, Legal Aid’s Wodonga office, the Victorian Aboriginal Legal Service on 1800 064 865 and Consumer Action Law Centre on 1800 476 477. Ms Fisher said consumer protections could always be improved, but creditors and debt collectors also needed to be held to the standards already required by law. “This action by the ACCC shows that making regulatory complaints is important; your one complaint may be part of a bigger picture and what may appear at first glance to be a ‘one-off’ occurrence may actually be systemic conduct,” she said. “We thank the ACCC for actively taking steps to protect consumers and to ensure that our laws and protections are not treated lightly. “You shouldn’t need to see a lawyer for debt collectors and creditors to comply with the law.”

Debt warning for North East consumers after ACCC legal action

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