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ACCC Commences Proceedings Against Debt Collection Firm ACM Group

The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court proceedings against debt collection firm ACM Group over allegations of “misleading or deceptive conduct” in relation to its dealings with two Telstra customers.

The ACCC alleges that ACM, which purchases debts from companies and then attempts to recover all or part of the debt, “engaged in misleading or deceptive conduct, harassment and coercion, and unconscionable conduct in dealings with two consumers in contravention of the Australian Consumer Law (ACL) and/or the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act)”.

“The alleged conduct occurred between 2011–2015 in relation to one consumer, a resident in a care facility, and in September 2014 in relation to the other consumer, a single parent with a limited income,” the ACCC stated.

“In each case, the debt being pursued had been sold to ACM by Telstra.”

ACCC chairman Rod Sims stated that conduct affecting vulnerable consumers is an ACCC enforcement priority.

“The ACCC has brought these proceedings because the alleged conduct by ACM, in seeking to recover debts ACM 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,” Sims commented.

“This action is part of our joint efforts with the Australian Securities and Investments Commission to improve debt collection practices.

“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.”

The ACCC alleges ACM engaged in misleading or deceptive conduct by representing to both consumers that it was about to commence legal proceedings against them when this was not the case.

The ACCC also alleges that ACM engaged in misleading or deceptive conduct by representing to the second consumer that it was preparing to issue them with a summons when it was not planning to do so, and that failing to make an immediate payment to ACM would affect their ability to obtain credit for five to seven years, when it did not have reasonable grounds to make that statement.

It is also alleged by the ACCC that ACM engaged in undue harassment by repeatedly contacting the first consumer by phone and letter when it “was aware that he had difficulty communicating, was highly vulnerable and had no capacity to repay the debt”.

The ACCC stated that it is seeking pecuniary penalties, declarations, injunctions, orders for an ACL compliance program, publication orders and costs.

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