Debt Collectors
1. HARASSMENT BY DEBT COLLECTOR
Mr. B had endured years of harassment at the hands of a ruthless debt collection agency that used every trick in the book to extract payment for a very old alleged debt that related to a T.V and Video rental agreement which the debt collector had bought from the liquidator of the original rental company after it had gone broke, for just 10c in the dollar.
After conducting our investigation we discovered the debt was not really a debt at all as the rented T.V and video had been stolen in a burglary in 1989 and had been insured by Mr. B as an additional “add on” to the rental agreement. Mr. B had reported the incident to the police at the time of the theft and had notified the rental company.
After reporting the theft to the rental company and notifying them of the insurance policy, Mr. B had no further contact with the rental company. However, unknown to Mr. B who had moved on from the rented house six months later, the insurance company is alleged to have reneged on paying out the rental contract.
Nothing further was done until five years later when the rental business went broke in 1994 and the liquidator sold the companies entire debt ledger to the debt collector.
Shortly thereafter, a Statement of Liquidated claim was issued out of the Sydney District Court by the debt collector claiming $2,500.00 plus costs and interest which now totaled $3,200.00. The Court documents were allegedly served on Mr. B at his old address which he had not been at for over 4 years.
As Mr. B did not attend the court hearing the Magistrate made a judgment order against Mr. B awarding the debt collector $5,600.
Unlike the rest of Australia, NSW privacy laws do not allow the credit bureaux to access the Court records and report judgments on individuals. As a result, the judgment was not reported on Mr. B’s credit file and therefore went unnoticed for several years.
Then one day in March 2001 Mr. B received a call on his mobile phone. On the other end was a representative from the debt collection company who at first did not identify who he was. He began to ask various personal questions and details like can I confirm your date of birth for privacy reasons and can I confirm your driving license and can I confirm your current address.
At first Mr. B started answering the questions but then he thought it was all a bit too strange and asked who the person was. The person than identified himself as XXX from XXXX Factoring and he wanted to know when Mr. B would be paying the $5,600.00 that he owed them.
Mr. B had no idea what he was talking about as he did know that the insurance company had failed to pay the rental company back in 1989. As a result Mr. B refused to disclose his current address but agreed to attend the debt collector’s office to discuss the matter.
Once at their office, the debt collector revealed that they had obtained a judgment against Mr. B in 1994 and then threatened to bankrupt Mr. B if he did not pay them.
Most people would say how could a debt incurred in 1989 be collectable in 2001 eleven years after it the debt was alleged to have been incurred. The answer is that the law provides that a creditor who obtains a judgment in the appropriate court against a debtor will be able to rely on the original judgment to collect the judgment debt for the next 7 years. Even after the expiration of 7 years the creditor may seek leave of the court requesting the Judgment be reinstated for a further 7 years.
This is exactly what had happened to Mr. B.
After learning that the debt collector had obtained a judgment against him, Mr. B went to his lawyers for help and was advised to seek an Order setting aside the judgment and bringing the matter back on foot. In due course, Mr. B’s lawyers lodged the application with the court, and were successful in having the judgment set aside. However, Mr. B’s lawyers demanded $5,000.00 to defend the matter in court. Unable to come up with the funds, nothing further was done on Mr. B’s behalf and the debt collector obtained a subsequent judgment against Mr. B and continued enforcement of the debt.
Up until this point, the debt collector did not have Mr. B’s current address and was finding it difficult to locate Mr. B as the only point of contact they had for him was his mobile phone number which they ring constantly. On one of these occasions the debt collector in charge of the account threatened to list a default on Mr. B’s Baycorp Advantage credit file if he didn’t disclose his address. The debt collector added that once default he would never get credit again.
Undeterred Mr. B refused to reveal his address to the debt collector.
Despite not having Mr. B’s current address, several days after the phone call, Mr. B received a letter from the debt collector which was correctly addressed to his current address. The letter threatened that if the debt was not paid within 7 days the debt collector would commence bankruptcy proceedings.
After considering his options Mr. B decided to pay the debt collector and put the matter behind him. However, some time later Mr. B and his new wife decided to purchase a house.
The house prices in Sydney had been advancing at a rapid rate and Mr. B was concerned that if he did not buy soon the prices of houses may have advanced beyond his reach. Mr. B and his wife found a house coming up for auction. Before attending the auction, Mr. B went to their local mortgage broker to apply for a loan. To their amazement the loan was rejected due to a default which had been published on Mr. B’s Baycorp credit file.
After obtaining a copy of his Baycorp credit file Mr. B discovered that the debt collector had made good their threat and listed a default with Baycorp.
Mr. B’s mortgage broker referred him to Latham Moore who investigated the matter finding no less than five separate breaches of the Privacy Act 1988.
After Latham Moore threatened the debt collector with an injunction restraining them from publishing the default the debt collector removed the default listing.
Mr. B obtained his mortgage but lost out on the house he and his wife had planed to buy.
Mr. B has been advised he has six years to commence legal action against the debt collector to recover his loss and damages as a result of the non compliant default published with the Baycorp Bureaux.
Last updated March 2005