credit-card-debt-collectors

How to deal with credit card debt collectors

Credit card debt collectors chasing you for payment? Here’s how to take control of this tricky situation.

There are all sorts of reasons why you might find yourself struggling to cope with debt. You may have lost your job, gone through a divorce, spent more than you could afford or simply not know how to manage your repayments efficiently.

Whatever the case may be, if you fall behind on your credit card repayments then you might be contacted by a debt collector. This can be an intimidating and even downright scary situation, so it’s important to know your rights when dealing with credit card debt collectors.

What is a debt collector?

A debt collector is a person who collects debts on behalf of a creditor. This could be someone from your credit card provider, or it could be someone from a debt collection agency.

A debt collector may contact you for several reasons, such as to demand payment for a debt, to explain the consequences of failing to pay a debt, or to help you make alternative payment arrangements to settle your debt.

What should I do if I’m contacted by a debt collector?

If you are contacted by a debt collector about a legitimate debt, the most important thing you can do is cooperate. Be upfront and honest about your financial circumstances, including any other debts you may be struggling with, and answer any questions the collector may have.

Promptly respond to any correspondence from a debt collector and always return missed calls rather than trying to dodge their attempts to make contact. If you move house or your contact details change, let the debt collector know.

And finally, if a collector offers you an alternative payment arrangement that you can realistically afford, accept it – doing so can help you get your finances back on track.

Of course, the debt collector should also treat you in a fair and professional manner. Under Australian Consumer Law, there are a number of important protections in place to ensure that debt collectors do not behave inappropriately or unconscionably towards you.

What are my rights when dealing with a debt collector?

Debt collectors are only allowed to contact you when necessary and when they have a reasonable purpose for doing so. A reasonable purpose for a debt collector to contact you could be:

  • To provide information about your credit card account and the money you owe
  • To demand payment from you
  • To explain the legal consequences of failing to pay off your debt
  • To offer to settle your debt
  • To help you make alternative payment arrangements, or to review an existing payment arrangement
  • To inspect or recover mortgaged goods
  • To find out why you have not responded to previous attempts to contact you
  • To find out why you have failed to adhere to a repayment plan

How and when can debt collectors contact me?

There are several methods a debt collector may use to get in touch with you, but they must consider your circumstances and adhere to any reasonable requests you have about how and when you can be contacted.

Debt collectors can get in touch by visiting you in person or by contacting you via phone, email, letter or social media. However, they are obliged to respect your right to privacy and must not provide details about your financial situation or reveal that they are a debt collector to someone else without first obtaining your permission.

Specific rules and regulations also apply to some contact methods:

If a debt collector contacts you via email or social media, they must be reasonably sure that you don’t share your account with someone else and that their message cannot be viewed by someone other than you.

If there is an easier way that a debt collector can feasibly contact you, such as working out an alternative payment arrangement over the phone or by email, there is no requirement for them to meet you face to face. However, in situations where face-to-face contact is necessary, such as if you have failed to respond to other efforts to get in touch, they should visit you at home during the hours outlined in the table below – visiting you at work is a last resort.

If a debt collector visits you in person they must:

  • Leave immediately when asked
  • Treat you and your family with respect and courtesy
  • Respect your right to privacy when dealing with you in front of anyone else
  • Not engage in any sort of behaviour that suggests your home may be under surveillance
  • Not talk to your child under 18 years of age about the debt
  • Not cause embarrassment or distress to you or anyone else
  • Not imply that anyone else (for example one of your family members) is responsible for the debt when this is not the case
  • Not visit on a national public holiday

The table below outlines when and how often a debt collector can contact you:

By phoneFace to face
How often?A maximum of 3 times per week or 10 times per monthA maximum of once a month
When is contact allowed?Weekdays between 7:30am and 9pm, weekends between 9am and 9pmWeekends and weekdays between 9am and 9pm (only if there is no other way to contact you)

What are debt collectors not allowed to do?

Under Australian Consumer Law, there are strict rules governing how debt collectors can act in their dealings with you. It is against the law for debt collectors to:

  • Use physical force, coercion or intimidation
  • Trespass on your property when asked to leave
  • Harass or verbally abuse you
  • Make false or misleading statements or engage in deceptive conduct
  • Take advantage of you if you are ill, disabled, unfamiliar with the law or vulnerable for some other reason

These laws not only apply to a debt collector’s treatment of you, but also to their dealings with your spouse, partner, family members and anyone else connected with you.

If a debt collector breaches any of the above conditions, you can make a formal complaint in writing to your creditor.

Tips to make sure you’re protected

The following tips can help reduce stress and ensure that you are treated fairly when dealing with debt collectors:

  • Keep records. Keep detailed records of all the communication you have with a debt collector. This will come in handy if you need to make a complaint.
  • Know your rights. Closely read the information in this article concerning your rights and the regulations around how a debt collector must treat you. This way you’ll be ready to take action if a debt collector acts inappropriately.
  • Know how to complain. If you’d like to complain to a creditor about the way you have been treated by a debt collector, a sample letter of complaint is available from the Australian Securities and Investment Commission’s (ASIC) MoneySmart website.
  • Hardship variation. If a debt collector contacts you about your credit card debt, you may be able to apply for a hardship variation to change your payment plan.

How can I dispute a debt?

If a debt has been incorrectly attributed to you or if the amount owing is wrong, request a copy of your account information and your credit contract from the debt collector.

If you don’t owe the debt, you only owe some of the debt or if there is a good reason you should not have to pay the debt, you can dispute it by contacting the credit card provider. If you’re unhappy with their response you can complain to a free external dispute resolution scheme such as the Financial Ombudsman Service, while you should also consider accessing free legal advice.

Where can I get help?

If you’re struggling with debt, talk to a free financial counsellor. Financial counsellors offer independent advice on how you can manage debt and take charge of your finances, and they can also negotiate with creditors on your behalf. Contact the National Debt Helpline (1800 007 007) to find a counsellor near you.

If you need legal help, community legal centres and Legal Aid agencies across Australia can provide free legal advice. You can access details of community legal centres across Australia by phoning the National Association of Community Legal Centres on 02 9264 9595 or visiting naclc.org.au. Alternatively, contact Legal Aid in your state or territory.

Have more questions about credit card debt collectors?

When will debt collectors get involved?

Once 60 days have passed with no payment towards your credit card debt, the account is considered “in default” and your card issuer can choose whether or not to begin the debt collection process.

How long do defaults stay on my credit file?

Credit defaults are listed in your credit file for five years, or seven years if the debt collector is unable to contact you.

What should I do if a debt collector contacts me about a debt I have already settled?

You can explain the situation in writing and provide any documents that prove you have settled the debt. If the collector continues to contact you, you can make a complaint.

The debt collector thinks I’m someone else – what should I do?

Showing your driver’s licence or another form of ID can clear up cases of mistaken identity, but remember that a debt collector has no right to force you to show ID.

Picture: Shutterstock

Tim Falk

A freelance writer with a passion for the written word, Tim loves helping Australians find the right home loans and savings accounts. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

Was this content helpful to you? No  Yes

Related Posts

American Express Velocity Platinum Card
American Express Velocity Platinum Card

Interest rate

20.74

Annual fee

375
ANZ Platinum Credit Card - Exclusive Offer
ANZ Platinum Credit Card - Exclusive Offer

Interest rate

19.74

Annual fee

87
St.George Vertigo Platinum
St.George Vertigo Platinum

Interest rate

12.74

Annual fee

99

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

310 Responses to How to deal with credit card debt collectors

  1. Default Gravatar
    Tita | April 14, 2017

    I have a default listed in my credit file by a collection agency thats been removed just recently after 5 years. Can they still chased this debt or can they re-list this again as court judgement if they want too.?

    • Staff
      arnold.salas@findercrew.com | April 16, 2017

      Hi Tita,

      Thanks for your inquiry.

      Yes, Creditors have the right to start legal proceedings to recover the money
      you owe – in other words, they can sue you for the debt. If they do, these
      legal proceedings will be civil rather than criminal and will have nothing to
      do with the police or the possibility of jail.

      Once 60 days have passed with no payment towards your credit card debt, the account is considered “in default” and your card issuer can choose whether or not to begin the debt collection process.

      Debt collectors generally have six years to recover a debt. If it is over six years (or three years in the Northern Territory) since you made a payment on a debt or acknowledged owing the debt in writing (and the debt collector or creditor doesn’t have a court judgment about the debt) you have a complete defense against this claim in court. These debts are called statute barred debts. If a debt collector contacts you about an old debt, do not make a payment or confirm the debt in writing. It is also important that you file a defense in court.

      Please click the link to learn how to deal with credit card debt collectors.

      Hope this information helped.

      Cheers,
      Arnold

  2. Default Gravatar
    Adam | April 6, 2017

    I live overseas for many years in the UK, but the address of my credit card is at my brothers home . I do not own this . If I default can the court enforce repression from him?

    • Staff
      Harold | April 7, 2017

      Hi Adam,

      Thank you for your inquiry.

      In most cases, your credit card issuer will contact you directly about the debt until more than 60 days have passed with no payment. Once that happens, the account is considered “in default”, and your issuer can choose whether or not to enter the debt collection process. With regards to this legal matter, it would be nice if you can settle your concern directly with the provider. That way they can provide you the proper guidance and settle the next actions that you would need to do.

      I hop this information has helped.

      Cheers,
      Harold

  3. Default Gravatar
    David | March 24, 2017

    Is there a time limit past which credit card debt collectors can no longer take you to court? I have heard that if the debts are more than 7 years old they cannot take legal action. Is that correct?

    • Staff
      arnold.salas@findercrew.com | April 16, 2017

      Hi David,

      Thanks for your inquiry.

      No, Creditors have the right to start legal proceedings to recover the money
      you owe – in other words, they can sue you for the debt. If they do, these
      legal proceedings will be civil rather than criminal and will have nothing to
      do with the police or the possibility of jail.

      Once 60 days have passed with no payment towards your credit card debt, the account is considered “in default” and your card issuer can choose whether or not to begin the debt collection process.

      Debt collectors generally have six years to recover a debt. If it is over six years (or three years in the Northern Territory) since you made a payment on a debt or acknowledged owing the debt in writing (and the debt collector or creditor doesn’t have a court judgment about the debt) you have a complete defense against this claim in court. These debts are called statute barred debts. If a debt collector contacts you about an old debt, do not make a payment or confirm the debt in writing. It is also important that you file a defense in court.

      Please click the link to learn how to deal with credit card debt collectors.

      Hope this information helped.

      Cheers,
      Arnold

  4. Default Gravatar
    Harry | March 15, 2017

    Hi,

    I was in Melbourne from 2009 to 2013. I own a credit card for $28000 (Commonwealth Bank).My Debt was listed in my credit file as per my debt collection agency on Nov. 2013. But when i get a credit check done by DUN & BRADSTREET they doesn’t show any debt owning towards me. But after a deal with the debt collection agency i made a full and final payment of $10000. So till when the default would be on my credit file. As i have applied for Permanent residency in Australia and would it any how stop me to get my visa.

    Thanks & Regards
    Harry

    • Staff
      May | March 17, 2017

      Hi Harry,

      Thank you for your inquiry.

      Basically, a default can stay on your credit file for up to five years, even if you have settled the account in that time. You can find more information about the listings on your credit file here.

      About your permanent residency, there are separate requirements set by the government for you to be eligible, so your default will not stop you to get a visa. But be sure to confirm and get advice regarding your PR eligibility from the Department of Immigration and Border Protection.

      Cheers,
      May

  5. Default Gravatar
    sam | February 1, 2017

    Hi,

    I have checked my credit file. I have two credit cards taken on 2013 and unpaid since 2014( from NAB and ANZ) which are with collection agencies and i am on payment plan. the debt has been given to collection agency in 2015
    Surprisingly, Neither NAB or ANZ have listed them on my file. they are not shown on my credit file as a default or overdue payment.
    I contacted the collection agency they mentioned that they are not sure why its not on my credit file
    My concern is will that be placed on my file very soon by ANZ or NAB?.
    is ther anything i can do to stop the process of putting it on my credit file

    • Staff
      May | February 1, 2017

      Hi Sam,

      Thank you for your inquiry.

      Just to give you a short background on how a listing can go into your file. Basically, when a lender has to list a default, there is a legal process that they should follow. A lender has to send you to letter of notices before it can list a default on your credit file. These notices should be sent in the way your credit provider normally contacts you through email or by mail to your physical address. After 60 days if they have not received payment from you, the credit provider can have the default listed on your file after 14 days.

      Although we may not be 100% sure, the banks may not have listed your default/overdue payment because they may not have sent you notices. Otherwise, there may be other reasons, which we do not really know. Furthermore, the possibility of listing the defaults in your file in the future could be very slim given that your overdue was already 3 years ago. Usually, the defaults/overdue payments stay on the file for five years.

      Cheers,
      May

    • Default Gravatar
      | February 1, 2017

      does that mean the default even if it is listed it will take the date when the account went overdue?

    • Staff
      May | February 1, 2017

      Hi Sam,

      Thanks for getting back.

      Let us say the banks have listed it and you have started paying the debts, the default will stay on your file up to five years. Nonetheless, all your payments activities will also reflect so that would help improve your score even if you have a default. Basically, the period of five years will start from the time that the bank has listed your overdue payment/default on your credit file. Since your overdue payments started in 2014, had that been listed in your file that year, then it should have already been 3 years now that it stayed on your file.

      Cheers,
      May

  6. Default Gravatar
    barry | October 2, 2016

    other credit car lenders wont accept mine for interest free 12 months because I’m on a pension

    • Staff
      May | October 6, 2016

      Hi Barry,

      Thank you for your comment.

      Just to clarify, are you looking for a credit card with 0% interest on purchases for 12 months? If so, you can find a list of credit card companies on this page that accept applicants who are retired and pensioners. If you click on the name of the credit card company, you’ll be able to view the credit cards and the promotions they offer on purchase and balance transfer rates.

      Cheers,
      May

  7. Default Gravatar
    | September 20, 2016

    Hi ,
    My friend has owed the personal loan around $40000 and credit card around $5000 , he didn’t pay off the bills almost 3 years because he used the money for helping his family.

    Past 3 years he never put money in the bank even others bank in Australia.

    Do u think he can loss his money if he put his money in other bank?
    Will the police catch him about so much money that he owes ?

    Thanks

    • Staff
      Arra | September 20, 2016

      Hi Jal,

      Thanks for your question.

      Please note that finder.com.au is an online comparison service and is not in a position to recommend specific products, providers and services. We can only provide general information such as our guide on getting out of debt.

      I hope this has helped.

      Cheers,
      Arra

  8. Default Gravatar
    | September 15, 2016

    i owe around 25k ( without interest,per loan,credit cards 2 bank) overseas for over 1 year no job , didn’t make a payment.
    is it possible to settle everything at once for less payment.
    i can borrow around 10k ?

    • Staff
      Jonathan | September 20, 2016

      Hi Ak, thanks for your inquiry!

      To clarify is your debt owed overseas or with an Australian bank? Unfortunately no Australian credit cards allow transfers of overseas debt. You may like to consider personal loan options.

      Cheers,

      Jonathan

  9. Default Gravatar
    Junior | August 4, 2016

    Can an New Zealand Debt Collection company sell the debt to a Australian agency to recover debt owed even if they are the same company?

    • Staff
      Chester | August 8, 2016

      Hello Junior,

      Thanks for your question.

      Generally no, unless the bank really wants to collect the debt off you. It usually depends how much the debt is, if it’s worth the bank’s worthwhile generally they will transfer the debt.

      I hope I was able to answer your question.

      Cheers!
      Chester

  10. Default Gravatar
    Rod | August 1, 2016

    Hello.
    I recently over paid my credit card bill in excess of $4500.
    When i contacted the credit card provider they informed
    Me that my account had been sold to a collection agency only 6 weeks earlier. They then informed me that standard protocol is for them to forward all monies paid to them to the collection agency and that it is my responsibility to go chase the money from the collection agency. Is this correct? Because i can see this being a challenge having the hunted chasing the hunter for a change. I also think i may have another account with the collection agency if that is the case can they legally hold onto the monies and put it towards the other debt instead of refunding me the amount that was overpaid? Any info or advice is appreciated. Thank you

    • Staff
      May | August 2, 2016

      Hi Rod,

      Thanks for your inquiry. Please note that you’ve come through to finder.com.au we are an Australian financial comparison website and general information service. We are not credit experts and can only give a general advice.

      You’d be best if you contact the debt collection agency directly if they could put the excess money (from your overpayment) to your other debt. For sure they’ll be able to trace your account and record.

      Cheers,
      May

Ask a question
feedback