How to Deal with Debt Collectors
Posted on 22 nov 2017
When dealing with Debt Collectors there is certain ways to handle the situation, follow this guide to help you make sense of what options are available to you. Over the last 20 years the banks Collection Departments have dramatically evolved. Banks have largely outsourced much of the legal and late stage collection processes, yet their early in house collection processes have become more sophisticated, matching cost savings with decreased delinquency rates.
When dealing with the banks, there is only one rule, be honest and proactive. In terms of Debt Collection Agencies, this is a different story. An Agency will collect on debts that are usually beyond 3 months in arrears. You’re going to achieve the best possible outcome if you follow these rules:
- Be honest and courteous with the debt collector, the vast majority are decent people trying to do a difficult job. When you speak with people the way you want to be spoken to then it can open doors that would otherwise slam shut in your face.
- Always answer the ‘Private’ numbered calls, if you don’t then they’ll continue to call and you’ll feel harassed. Creditors are only allowed to call you no more than 3 times a week, between 7.30am and 9.00 pm. Most of the Debt Collection Agencies have computer auto diallers and if you don’t call back or pick up your phone then the software is programmed to keep calling.
- Always open your letters from the bank as they will warn you about possible Defaults on your credit rating or your loan being transferred to an outside debt collection agency.
- Keep a diary of the time of call and who is calling, in particular with Debt Collection Agencies as this may be useful later if you want to lodge a harassment complaint.
- It shows good faith to pay what you can, even when you are not in a payment plan. This can pay dividends later.
- Only agree to a payment arrangement if you can afford it otherwise you will default and the Debt Collectors terse approach will be much more inflexible next time.
- NCCP legislation allows you to apply for a Hardship Variation on your contract, this means your monthly repayments can vary down depending on your affordability.
So long as you run by these rules there is no reason why you cannot have a functioning payment plan with the Debt Collection Agency you’re dealing with.
If you’re having a hard time with a Debt Collection Agency don’t automatically consult with the Credit Ombudsman, it’s time to speak with the Ombudsman when:
- A debt collector contacts you via Social Media publicly, they can only message you in private otherwise this is considered harassment.
- Contact is made too frequently and outside of acceptable hours of contact
- Bully or harass you
- Making false or misleading statements or engaging in deceptive conduct: For example, they tell you they will be proceeding with legal action when it is unlikely they will.
- They demand a payment plan outside of your capability
Finally, if you feel overwhelmed and uncertain what to do, seek out a specialist like a Financial Counsellor, Debt Negotiator or the Credit Ombudsman for further guidance.