The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court against debt collection firm ACM Group, following its ruthless pursuit of Telstra customers.
According to the Australian watchdog, ACM Group engaged in “misleading or deceptive conduct, harassment and coercion, and unconscionable conduct” in dealings with two consumers, breaching the Australian Consumer Law in the process.
The alleged conduct occurred between 2011–2015 in relation to one customer, a resident in a care facility, and in September 2014 in relation to the other consumer, a single parent with a limited income.
In each case, the debt being pursued had been sold to ACM Group by Telstra - which is no longer represented by the firm - with the ACCC alleging that the company deceived both customers into thinking they were about to commence legal proceedings against them when this was not the case.
During this first victim’s ordeal, the largest privately owned debt acquisition firm in Australia engaged in “undue harassment” by repeatedly contacting the customer by phone and letter when the debt firm was aware that “he had difficulty communicating, was highly vulnerable and had no capacity to repay the debt”.
Furthermore, the relentless pursuit led to the company engaging in coercion by representing to the second customer that it was going to take legal action or issue a summons and that failing to make an immediate payment to ACM Group would affect their ability to obtain credit for five to seven years.
Consequently, the ACCC also alleged that ACM Group's conduct in dealing with each of these consumers was, in all circumstances, “unconscionable”.
“Conduct affecting vulnerable consumers is an enforcement priority for the ACCC,” ACCC Chairman, Rod Sims, said.
“The ACCC has brought these proceedings because the alleged conduct by ACM Group, in seeking to recover debts ACM Group had purchased from Telstra, was in our view contrary to accepted community values and standards of fairness in dealing with consumers, especially those who are vulnerable.
“This action is part of our joint efforts with the Australian Securities and Investments Commission to improve debt collection practices.”
Sims said the ACCC has worked with debt collectors and businesses who assign debts, to ensure that collection activity complies with best practice and the law.
“We are now taking enforcement action to reinforce these efforts,” he added.
Sims said the ACCC is seeking pecuniary penalties, declarations, injunctions, orders for an ACL compliance program, publication orders and costs.