Former debt collector reveals dark secrets of the Australian industry | debt collection

Sean Letcher is a shadow of his former self.

Fifteen long years in the debt collection game, spending his days harassing people for unpaid bills and loans, left him broken.

“In short, they treat us like slaves, like total trash,” he says.

He has decided to speak publicly about what he saw in the private debt collection sector – and the shortcomings of a regulatory system he describes as “regrettable” and “a joke” – because he believes the average Australian would be horrified by what is actually happening. behind the doors of the call center.

In 2012, while working for a major Australian debt collector, Letcher remembers being told to try to seize a house to pay off a $90,000 debt owed by a Queensland woman who had been raped the same week her husband had died. The woman was forced to sell her house to pay the debt, she claims.

The company has no records going back that far and was therefore unable to verify the allegation, but said it was committed to “treating all customers with respect and in accordance with ACCC debt collection guidelines”.

Letcher says that at another debt collection company he saw “skip trackers” (staff who track down missing debtors) create fake profiles on social media to find information about their targets.

That company said it “categorically rejects” the allegations and that Letcher had left the firm because it did not meet its standards. Letcher disagrees: he says he left because he had ethical concerns about the company.

The former debt collector says regulatory enforcement in the industry is “woeful” and “non-existent.” He doesn’t remember a single time he felt like regulators pressured his employers to stop unethical behavior.

“In my more than 15 years of experience, I don’t remember ever feeling that these companies were pressured by the relevant bodies to act ethically,” he says. “Maybe something can happen on a case-by-case basis. But who has seen the whole picture as a whole?”

In one case, he recalls being told to ignore a warning from the ombudsman to stop charging excessive late payment fees unless a debtor complained.

“The instruction was to aggressively pursue fees but, at a mention of filing a complaint, simply waive the fees,” he says.

He also sent an agent to a debtor’s child’s school and made false threats to debtors that their nonpayment would damage their credit rating for debts that could not possibly have that effect, practices that consumer advocates and Lawyers have raised this issue separately with Guardian Australia. .

Letcher feels like he owes a debt to society after his time working in debt collection. Photograph: Penny Stephens/The Guardian

“You’ll see this used a lot with younger people, older people, or people with limited English,” he says. “That’s debt collection 101.”

It tells of debt collectors who harass friends and family in an effort to make debtors pay. Consumer Credit Legal Services of Western Australia, a community legal centre, has reported similar conduct, saying it is “particularly insidious and disgusting behavior and must be condemned”.

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Three sources, who spoke on condition of anonymity, also spoke to The Guardian about what they saw in the sector.

They say many debt collection companies take great care to meet their legal and ethical obligations and carry out rigorous checks on how their collectors interact with debtors.

They did not witness the type of conduct Letcher talked about, which his former employers also question.

But two sources say they have been charged by a predatory lender who would deliberately circumvent payday lending restrictions to provide loans to vulnerable people with little ability to pay, before charging massive interest while debt recovery processes were in progress. course.

A third has spoken of the stress that erroneous debt recovery communications could have on vulnerable debtors.

“Sometimes technical errors can occur, for example sending unnecessary (text messages) … even if customers already have a payment plan,” he says.

“It causes a lot of stress and the vulnerable most of the time called back (and) started abusing all the collectors. Occasionally we may receive calls about self-harm or threats; we received many of them during Covid.”

Letcher says that after escaping the industry, he now feels the need to pay penance or, in his words, “take his medicine.”

“I do not hide from paying what I deserve and I realize that I have a debt to the people of this country.”

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