Debt collector reveals harassment techniques


OVERBLOWN threats of legal action, deliberate misinformation and phone harassment were tactics employed by a debt collection agency contracted to National Australia Bank, according to an industry insider.

The insider, who requested his identity not be disclosed because he feared losing his job, told The Age his debt collection agency often breached guidelines on the number of phone calls that could be made to debtors during a week. He also claimed staff were instructed not to tell bank customers their minimum monthly repayment on credit cards - only the total amount owed - in an effort to maximise late fees.

''We are coached to extract money out of people regardless of their circumstances,'' he said.


''People think we work directly for the bank's collections department when, in fact, we are with an outsourced agency that has access to the NAB's collections department data.''

The insider's testimony came as The Age was inundated with complaints about the tactics employed by debt collection agencies working to recover monies owed to Australia's big four banks.

In some cases, bank clients alleged they had had their accounts frozen despite hardship arrangements with banks or agreements in place to repay debts.

Others told of having money taken from their accounts without consent, leaving them unable to pay for food or rent.

The Age yesterday revealed ANZ Bank files showed the bank's debt collectors may have acted illegally by harassing debtors and seizing money from their accounts in breach of consumer laws.

ANZ staff concerned about the drive to maximise debtor repayments have recently contacted the Australian Consumer and Competition Commission, which began examining their claims weeks ago.

In July, five staff from the ANZ debt collection department were disciplined after The Age revealed they had set up a bogus Facebook page in order to track debtors.

The NAB debt collecting agency insider told The Age yesterday that he and his colleagues were given a script that was designed to ''manipulate'' debtors into agreeing to have money transferred by the bank out of their accounts to meet debts.

Loan contracts permit banks to recover debts by taking money from borrowers' other accounts. But ACCC guidelines require debt collectors to make ''reasonable allowance for a debtor's on-going living expenses''.

The banking industry is yet to implement recommended changes to its code of conduct, including one to ban the seizing of lump sums to financially disadvantaged debtors whose other accounts are in arrears.

Other tactics identified by the NAB debt collecting insider were regular phone calls in excess of the recommended industry limit of four a week. ''One lady received 109 calls in one week,'' the insider claimed.

Warnings of debtors being hit with a ''bad credit rating for life'' were also common, he said.

A spokeswoman for the NAB said the bank did not provide scripts to any of its collections agencies and did not tolerate inappropriate behaviour by them. She said the bank last year reviewed its collections agencies and put out to tender its debt recovery work. Successful tenderers were required to meet strict criteria for debtor care, hardships processes and customer-complaints-handling processes.

The NAB's debt collectors were reviewed by external auditors every six months, she said.

having worked in finance and have a mate who actually runs a DCA I can tell you a few pointers on how to beat the system.


lets say you rack up 20K in CC debt.

You default and allow legal action to commence through a collection agency. That agency ha sbought your 20K debt from the bank for probably 2K, now when they get any money from you the first 2K goes to cover their purchase costs any above that 2K is profit for the collection agency so.


When they say you owe 20K tell them you only have 5K that is all I can pay, quite often they'll go OK we'll take 5K and close the file.

You just made 15K.

It is so easy the bank got the 2K they sold teh debt for the agency made 3K and you don't have to pay the remaining 15K

Don't forget to mention that when you default on a loan, you are placed on the CRAA and your credit is stuffed for 5 years or untill you repay the full amount.

laborfornever wrote on Sep 15^th, 2010 at 12:07pm:

having worked in finance and have a mate who actually runs a DCA I can tell you a few pointers on how to beat the system. lets say you rack up 20K in CC debt. You default and allow legal action to commence through a collection agency. That agency ha sbought your 20K debt from the bank for probably 2K, now when they get any money from you the first 2K goes to cover their purchase costs any above that 2K is profit for the collection agency so. When they say you owe 20K tell them you only have 5K that is all I can pay, quite often they'll go OK we'll take 5K and close the file. You just made 15K. It is so easy the bank got the 2K they sold teh debt for the agency made 3K and you don't have to pay the remaining 15K

You can easily avoid debt collection agencies by remaining in contract with the creditor and updating them on your situation particularly if you can't honour previous agreements.

I think there is a need to change credit laws, such that the aggregate credit card/short term debt must not exceed a certain percentage of annual income; mainly to protect many from themselves.

I got a text message threatening my credit rating if I didn't pay a fine (now about $60 I think) to an old video rental place. I thought I had sorted it out ages ago.

culldav wrote on Sep 15^th, 2010 at 12:13pm:

Don't forget to mention that when you default on a loan, you are placed on the CRAA and your credit is stuffed for 5 years or untill you repay the full amount.

I heard of someone who was denied a home loan
because of an old Optus bill for $40 that they didn't know about.
The Credit Referencing Association of Australia had them on
a list for bad debts.
That was an expensive $40 bill.
They didn't get a house because of it.