The debt was almost $10,000 and seemed to have arisen from her agreeing to pick up some items for a relative’s business partner from a service provider. Over the years many members of Samantha’s family had taken advantage of and been abusive towards her.
Samantha was unaware of the debt. Despite telling the debt collection agency she had no knowledge of the debt, they continued to contact her. As a result of the continuing pressure she paid $600 towards the debt although she could not afford it.
Both the agency and the service provider failed to give reasons why Samantha was liable for the debt.
It was only after months of pursuing this matter that the service provider told Samantha she was liable because she was listed as a company director and a secretary for a company set up by a close family member. Samantha did not remember signing any documentation that made her a director or company secretary. Samantha reported this to the police as she believed she had been a victim of fraud.
When no further clarification was provided, RLC demanded return of the $600 and confirmation that the debt agency would no longer pursue the debt unless they could provide evidence of why Samantha was personally liable for what appeared to be the debt of a company.
RLC argued that the debt collection agency had engaged in misleading and deceptive conduct when it demanded payment from Samantha under the threat that legal proceedings could be commenced against her. In doing so the agency had contravened section 10 of the Debt Collection Guideline: For Collectors and Creditors (2005) (the Debt Collection Guideline).
RLC argued that threatening Samantha with imminent legal action for a debt for which she had no apparent personal liability, amounted to undue harassment and intimidation, which contravenes sections 16 and 19 of the Debt Collection Guideline.
The $600 was repaid to Samantha and RLC was informed that the matter was closed and finalised. However, to add to the complexity, the agency stated that they could not provide written confirmation of this. After further contact, confirmation was finally received that there is no money owing on the account.
This case illustrates the following:
- People can be taken advantage of by someone they trust, particularly when in abusive relationships and when they are anxious, exhausted and easily overwhelmed;
- Some debt matters can be very complex and that not all requests for payment from debt collection agencies are valid; and
- It is useful for those helping people with debts to be aware of codes of conduct relevant to the parties.
In the course of resolving the matter, RLC identified other legal issues and support needs that Samantha had and was able to address those with her. Samantha gained confidence and ability to address her problems during the time she was an RLC client.
