Dodgy debt collector

In short

The initial problem

Unreasonable demands from a debt collector made Geoff think he was headed for court owing $16,000.

The solution

Geoff was advised that the debt collector’s claims were unlawful, and he got help to resolve the debt repayment in his favour, without seeing a lawyer or going to court.

The full story

The background

Out of the blue, Geoff began receiving phone calls and letters from a debt collector demanding that he pay $16,000 for an outstanding debt. The debt collector did not make it clear what the debt was in relation to, but Geoff suspected it was to do with an old debt for $1000 he had not made a payment on for over 10 years.

The problem

The letters from the debt collector said that they were going to take action in court to recover the debt without further notice. Feeling under pressure and trusting that the debt collector’s claims were true, Geoff made an initial payment of $1000, hoping that the problem would go away.

Getting help

Not knowing what to do about the remaining $15,000 that the debt collector was claiming, Geoff contacted a community legal centre for help. They explained that because the original debt was more than 10 years old, it was protected by the statute of limitations – so the debt collector was acting illegally in claiming any money from Geoff. The community legal centre wrote to the debt collector on Geoff’s behalf, arguing that its conduct was illegal.

When there was no response from the debt collector, the community legal centre helped Geoff make a complaint to the Credit Ombudsman Service. The ombudsman found that the debt collector didn’t have the right to enforce the debt.

The solution

Geoff was able to get the debt collector to waive all rights to its claim. The debt collector also paid Geoff back his $1000.

Problem solved.

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This page was last updated on May 12, 2014