The Industry

ACDBA members include both contingent debt collectors and debt buyers.

Since the late 1990s environmental changes have resulted in a stronger, more professional collections industry in Australia. Those changes include:

  • Debt collection agencies have corporatised resulting in larger corporations which usually work across multiple jurisdictions.
  • Technology has allowed the industry to deliver services with no face to face contact with debtors.
  • Technology allows members to deliver services across multiple jurisdictions without the need for a physical presence in each one.
  • The "traditional" collection industry has moved to specialisation into 2 very separate and distinct elements in service delivery:
    • debt collection, with no face to face debtor contact
    • field call, repossession and process service functions – with face to face debtor contact.
  • ACDBA members are subject to strict legal agreements with their creditor clients (clients) which cover legal compliance, collection conduct and dispute resolution processes in addition to other contractual arrangements.
  • The ASIC/ACCC Debt Collection Guidelines and the Consumer Affairs Victoria Guidelines for Debt Collection have provided members with clear guidances on appropriate debt collection practices. Compliance with these Guidelines is usually part of the contractual agreement with clients. Compliance with these Guidelines routinely provides the framework in which members base all their collection activities with debtors.
  • The Privacy Act (Cth) regulates how members (and their clients) can collect, use and disclose credit and personal information.
  • Debt purchase assignees are obliged to comply with the Banking Code of Practice and the National Credit Code for consumer credit debt, where relevant, in addition to their contractual obligations to the assignors.

Standards in the industry are high given the contractual and legislative obligations with which our members comply. The majority of ACDBA members are large corporations, many of which are listed on the Australian Stock Exchange, collecting a range of consumer, commercial and government debts. A significant survey of ACDBA members for the year ended 30 June 2013 provides a snapshot for the Australian industry - read more.

 

Incidents

Member statistics indicate a very low level of confirmed complaints against industry members.  Despite a high volume of contacts (over 49.8 million for the year ended 30 June 2013 in relation to 3.6 million accounts) incidents against the industry amount to 1 per 9,175 contacts or 659 accounts under management; or less than 0.011% per total contacts per annum

Incidents recorded as part of ACDBA member Internal Dispute Resolution processes are considered to be any matter related to an alleged unsatisfactory professional conduct and lodged as requiring investigation.  These unsubstantiated incidents should not be confused with genuine requests made by debtors for additional information to understand the terms of an account, the balance outstanding or the history of payments made.

Recognising that collections deal exclusively with distressed debt where often the responses received to demands for payment are emotionally charged, an incident rate as low as 0.011% per total contacts made each year is outstanding and would no doubt be envied by many other industries and government departments in respect to their public dealings.

 

Licensing

The majority of ACDBA members work in multi-jurisdictions. The professionalism of members is unaffected by jurisdictional differences in licensing regimes and is evidenced by an extremely low rate of complaints against members. Complaints that arise are resolved promptly and efficiently, as evidenced by the lack of enforcement action by regulators across Australia. This high level of professionalism supports ACDBA's contentions that a co-regulator approach to national, consistent legislation should apply for the industry.

ACDBA concerns for the industry in respect to its regulation include:

  • Inconsistent licensing requirements and standards across State & Territory jurisdictions;
  • Multiple licenses required to meet State & Territory specific requirements, regardless of head office locale;
  • Inconsistent training standards across jurisdictions;
  • Training requirements which exceed collector work requirements;
  • Restrictive and expensive training delivery requirements which ignore workplace training; and
  • Administrative inefficiencies of some licensing agencies.

In addition to compliance with the legislative environment the clients of ACDBA members generally have strict service agreements in place which specify conduct and account management standards for the member. Read more about client service agreements.

These business to business contractual arrangements indicate the high service delivery standards agreed between ACDBA members and their clients. The agreed obligations are broader than debt collection specific legislation.