Important Legislation Changes for Collections

RE: Debt Collection Guideline for collectors and creditors.

On October 14, 2005, the Australian Competition & Consumer Commission, in conjunction with ASIC, released the final draft of the above guideline. NCI, as part of its policy of ensuring Best Practice, has obtained independent legal advice on the implication these guidelines have for both our customers and ourselves.

This document has far reaching effects on the Collection industry and a Creditors' right to claim costs associated with recovery action.

In short, you are only allowed to recover collection costs where you hold completed documents which allow you to pass these costs onto your debtor. In QLD and TAS you are restricted by statute from recovering costs, irrespective of whether there is the appropriate clause in your paperwork.

Effective immediately, we will only be seeking recovery of costs where our client has provided us with a copy of the appropriate documentation that supports our right to do so.

We strongly recommend you take appropriate action to update your paperwork to ensure you comply with the Guidelines and secure your right to recover any costs incurred as a result of a delinquent account.

An example of a suitable clause is: "Any expenses, costs or disbursements incurred by the supplier in recovering any outstanding monies including debt collection agency fees and solicitors costs shall be paid by the Customer."

You should seek your own independent legal advice regarding appropriate wording for your specific situation.

Contact NCI's Collection experts Brad, Daryl or Terry on 1300 137 728 for assistance in relation to these changes.

Click here to download the ACCC-ASIC Debt Collection Guideline: For Collectors and creditors