ABN 74 010 230 716Licence No. CAP1008674 ACL 388442www.collectionhouse.com.auLevel 7, 515 St Paul’s TerraceFortitude Valley Qld 4006PO Box 2247, Fortitude Valley BC Qld 4006

Phone <07> 3292 1000Fax <07> 3832 0222bne.office@collectionhouse.com.au

Queensland New South Wales Victoria South Australia New Zealand

2 December 2011

Debt Collection ConsultationConsumer Affairs VictoriaPolicy and Legislation BranchGPO Box 123Melbourne VIC 3001

By email: debt.collection@justice.vic.gov.au

Dear Sir

DEBT COLLECTION HARMONISATION – OPTIONS PAPER

Collection House Limited (CLH) is a listed public company providing a range of debt collection services including contingent collections (commission based collections), receivables management and related services.

CLH has a number of wholly owned subsidiaries including Lion Finance Pty Ltd (LF) (debt buyer) and Midstate Credit Management Services Pty Ltd (MCMS) (contingent debt collector) also participating in the debt collection industry in Australia.

Currently,

CLH is a licensed debt collection agency in all states of Australia, except in Victoria where mandatory exclusionary requirements apply;

MCMS is a licensed debt collection agent in New South Wales and operates in Victoria under mandatory exclusion requirements;

CLH, LF and MCMS and each of them hold an Australian Credit Licence.

The Collection House Group of companies comprising CLH, LF and MCMS (individually and collectively Collection House) wish to respond to the Debt Collection Harmonisation Regulation Options Paper.

RESPONSE

Collection House welcomes and generally supports the harmonisation of debt collection regulations, licensing and regulators across all States and Territories of Australia on the basis that the harmonisation provides for uniform and consistent legislation, laws and codes of conduct for all business entities and persons conducting debt collection activities including creditors, licensed credit providers (deemed or otherwise under existing legislation), debt collectors, debt buyers, factors and government.

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This response will endeavour to address the harmonisation of debt collection regulation in Australia under the following areas, which we consider to be in the best interests of creditors, debt collectors, debt buyers, consumers, regulators and the industry as a whole:

Collection House recommendations

Response to options + support of recommendations

Annexure A – Terminology – scope of the debt collection industry in Australia

COLLECTION HOUSE RECOMMENDATIONS

We recommend a uniform and consistent Australian Debt Collection model to replace all State and Territory legislation and licensing regimes, that addresses the following key elements and concepts:

1. A separate national legislative instrument be enacted specifically for the Debt Collection industry – suggested title being the National Debt Collection Act.

2. An Australian Debt Collection Licence is a licence that authorises the Licensee to engage in Debt Collection under the National Debt Collection legislation (Licence).

3. A Debt Collector must not engage in Debt Collection if the Debt Collector does not hold a current Licence authorising the Debt Collector to engage in Debt Collection.

4. An Australian Debt Collection Licence granted to a Debt Collector may be subject to any conditions that the Regulator requires.

For example:

(a) The Licensee must comply with its obligations under the National Debt Collection legislation, including conduct obligations.

(b) The Licensee and its nominated Responsible Managers are responsible for the acts or omissions of the Licensee’s Collection Officers and employees who engage in Debt Collection activities.

(c) The Licensee must ensure that:

i. Each Collection Officer of the Licensee is adequately trained to a Certificate III in Mercantile Agents (FNS30410) level within the first 12-18 months of the Licence being issued or of the Collection Officer commencing employment with the Licensee;

ii. Each Responsible Manager of the Licensee is adequately trained to a Certificate IV in Frontline Management (BSB40807) level or another general relevant higher level qualification within the first 12-18 months of the Licence being issued or of the Responsible Manager commencing employment with the Licensee; and

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iii. Each Responsible Manager of the Licensee undertakes at least 10 hours of continuing professional development in each calendar year in which they perform the role of Responsible Manager for the Licensee.

(d) The Licensee must establish an internal dispute resolution (IDR) system that meets the standards or requirements (AS ISO 10002 Complaint Handling) made or approved by the Regulator (ASIC Class Order [CO 10/250]).

(e) The Licensee must become, and continue to be, a member of an authorised external dispute resolution (EDR) scheme.

(f) If the Licensee ceases to be, or becomes aware that it will cease to be, a member of an approved external dispute resolution (EDR) scheme, the Licensee must, within five (5) business days of becoming aware of the same:

i. Notify the Regulator in writing; and

ii. Advise the Regulator of its new EDR Scheme.

(g) The Licensee must maintain a trust account in accordance with the National Debt Collection legislation including:

i. Appointing an independent auditor;

ii. Annually auditing the trust account; and

iii. Providing a copy of the trust account audit report to the Regulator within 3 months of the audit being completed by the independent auditor.

(h) The Licensee must maintain a fidelity insurance policy that is adequate in terms of its amount, scope and other terms in accordance with the insurance requirements for Debt Collection activities.

(i) The Licensee must conduct Debt Collection activities in compliance with the Australian Securities and Investments Commissions Regulatory Guide 96: Debt collection guidelines: for collectors and creditors and the National Debt Collection Act and regulations.

5. A Debt Collector must not engage in Face to Face Debt Collection if the Debt Collector does not hold:

(a) an Australian Debt Collection Licence to engage in Debt Collection; and

(b) a Securities Legislation Licence for the relevant jurisdiction or jurisdictions to engage in Face to Face Debt Collection.

6. For the purposes of Recommendation 3, a Fit and Proper Person or a Collection Officer does not require to hold a current Australian Debt Collection Licence or otherwise to engage in Debt Collection if:

(a) the Fit and Proper Person or a Collection Officer engages in Contingent Debt Collection on behalf of another person (the principal); and

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(b) the Fit and Proper Person or a Collection Officer is a Fit and Proper Person or a Collection Officer of the principal or of a related body corporate of the principal; and

(c) the Fit and Proper Person’s or a Collection Officer’s conduct in engaging in the Debt Collection is with the authority of the principal; and

(d) the principal holds a Licence authorising the principal to engage in Debt Collection.

7. For the purposes of Recommendation 6, a principal Debt Collector must ensure that a Collection Officer who conducts Debt Collection is compliant with the training and competency conditions of the principal’s licence.

For example, the principal/Debt Collector may be required to ensure that the Collection Officer is adequately trained to a Certificate III in Mercantile Agents (FNS30410) level within the first 12-18 months of the principal obtaining its Licence or of the Collection Officer commencing employment with the principal.

8. A person who is a Responsible Manager must not engage in Debt Collection activities if the Responsible Manager does not hold a current sub-licence authorising the Responsible Manager to engage in Debt Collection activities. A sub-licence may contain any conditions that the Regulator deems fit.

9. A Debt Collector must ensure that its Responsible Managers are sub-licensed and that they are compliant with the conditions of the Licence including training and competency requirements.

For example, a sub-licensed Responsible Manager must be adequately trained to a Certificate IV in Frontline Management (BSB40807) level or another general relevant higher level qualification within 12-18 months of the Debt Collector obtaining its Licence or of the Responsible Manager commencing employment with the Debtor Collector and that each Responsible Manager undertakes at least 10 hours of continuing professional development in each calendar year during the currency of the Licence and sub-licence.

10. Under the National Debt Collection legislation, a licensed Debt Collector and the Debt Collectors nominated Responsible Managers are responsible for the acts or omissions of the Licensee’s Collection Officers and employees who engage in Debt Collection activities.

11. A Debt Collector must maintain an internal dispute resolution (IDR) system that meets the standards or requirements (AS ISO 10002 Complaint Handling) made or approved by the Regulator (ASIC Class Order [CO 10/250]).

12. A Debt Collector must become, and continue to be, a member of an authorised external dispute resolution (EDR) scheme during the currency of the Licence.

13. A Debt Collector who conducts Debt Collection activities must maintain a trust account in accordance with the National Debt Collection legislation including, but not limited to:

(a) Appointing an independent auditor;

(b) Annually auditing the trust account; and

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(c) Providing a copy of the trust account audit report to the Regulator within 3 months of the audit being completed by the independent auditor.

14. A Debt Collector who conducts Debt Collection activities must maintain a fidelity insurance policy that is adequate in terms of its amount, scope and other terms in accordance with the insurance requirements for Debt Collection activities.

15. A Debt Collector must ensure that its Responsible Managers, its Collection Officers or any employees that conduct Debt Collection activities comply with the National Debt Collection legislation, the Australian Securities and Investments Commissions Regulatory Guide 96: Debt collection guidelines: for collectors and creditors together with any other Regulatory Guide issued or prescribed by the Regulator.

16. The Regulator is the Administrator of the National Debt Collection regulations. As a significant proportion of Debt Collection is carried out for Licensed Credit Providers, the Regulator should be the Australian Securities and Investments Commission (ASIC) rather than the task be split with the Australian Competition and Consumer Commission (ACCC).

17. The Debt Collector is required to provide information to Debtors within the confines of the existing legislative requirements.

18. “For profit” agencies that claim they can facilitate “repair credit” or “restore credit ratings” or purport to act as “advocates for Consumers” to, among other things,

(a) remove any payment default[s] or judgment default[s] from credit reporting agencies; or

(b) negotiate an informal settlement or an informal arrangement (not being a Part X or Part IX arrangement under the Bankruptcy Act),

be licensed and subject to appropriate uniform legislation, regulations, conduct obligations, trust obligations and fidelity insurance requirements, at least equivalent to that proposed for Debt Collectors.

RESPONSE TO OPTIONS + SUPPORT OF RECOMMENDATIONS

Licensing Options

Collection House’s preferred option is Option 5: Deemed licensing via the National Consumer Credit Protection Act ( National Credit Act ) or a separate national licensing regime. Our submission supports the creation of a new legislative instrument (National Debt Collection) as the best method for achieving harmonisation for the industry.

Currently, no State or Territory has enacted legislation that is specifically designed for the debt collection industry. Rather, it is contained in a myriad of inconsistent State and Territory based legislation including the Security Legislation.

We submit that the Security Legislation is not suitable for legislating Debt Collectors, as the Security Legislation’s primary function is to regulate the security industry. Accordingly, it is currently an imperfect solution to regulate a different industry.

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We submit that the Debt Collection industry and Debt Collection has developed and continues to grow as a specialised profession. Debt Collection should not embrace Face to Face Collections as part of its core business activities.

We submit that in order to best achieve harmonisation, and at the same time resolve and replace the existing inconsistent State and Territory legislation issues currently experienced by Debt Collectors, that new national legislation (National Debt Collection) should be specifically drafted for the Debt Collection industry (Recommendation 1).

We have recommended that Debt Collectors must not engage in Debt Collection activities unless they are licensed (Australian Debt Collection Licence – ADCL) to conduct Debt Collection activities (Recommendations 2 and 3).

We have submitted that the Regulator should be able to place any appropriate conditions on granting an ADCL (Recommendation 4), such as: the proper conduct obligations; internal dispute resolution requirements; and mandatory external dispute resolution requirements; (we have been member of FOS/ BFSO since 2005).

We consider that modern Debt Collection activities do not and should not include Face to Face Debt Collection activities (Recommendation 5). Accordingly, for convenience and simplicity, Debt Collection should exclude Face to Face Collection.

Collection House submits that any Debt Collector, Responsible Manager or Collection Officer that performs Face to Face Debt Collection activities should (besides holding an ADCL or a sub-licence) also be required to comply with the licensing obligations under the existing Security Legislation in the relevant jurisdiction or jurisdictions of their operations (Recommendation 5). This extra licensing requirement is premised on the Face to Face interaction with Debtors. As Face to Face Debt Collection activities necessitate direct contact with a Debtor, we submit that further identification requirements, such as those contained in the Securities Legislation, is warranted for any Debt Collector that conducts Face to Face Debt Collection activities.

Similar to the provisions of the National Credit Code, we have recommended that Collection Officers of Debt Collectors are not required to be licensed if conducting non-face to face Debt Collection activities (Recommendation 6). This exclusion already exists under the PAMDA legislation in Queensland.

The only exception that we consider reasonable would be when a Debtor attends a Debt Collector’s place of business to make a payment of the Debt or part thereof. In that circumstance, the exception should permit a Responsible Manager and a Collection Officer to be present together, at the same time as the Debtor is present, to record and receipt the payment of the Debt.

While Collection Officers should not be required to be licensed to conduct Debt Collection activities, the Debt Collector, as the Collection Officer’s principal, is responsible for the training and competency of the Collection Officer, within a certain timeframe (Recommendation 7).

However, unlike the National Credit Code, we have recommended that Responsible Managers of Debt Collectors are required to obtain a sub-licence to conduct Debt Collection activities. Further, the Regulator may place any appropriate condition on a sub-licence that the Regulator requires (Recommendation 8).

Similar to Recommendation 7, a Debt Collector must ensure that its Responsible Managers are sub-licensed, and that they are adequately trained and continue to

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receive continuing professional development training each calendar year (Recommendation 9).

We further recommend that a licensed Debt Collectors and the Debt Collector’s nominated Responsible Managers are to be responsible for the acts or omissions of Collection Officers and employees who engage in Debt Collection activities (Recommendation 10).

Conduct Options

Collection House’s preferred option is a combination of both Option 3: Mandatory prescribed code and Option 4: Legislative provisions.

Collection House agrees with Consumer Affairs Victoria and submits that an excellent start for a mandatory code of conduct for Debt Collectors would be the Australian Securities and Investments Commission’s Regulatory Guide 96: Debt collection guidelines: for collectors and creditors (RG 96).

This publication has been used and is well understood by Debt Collectors since its release in October 2005. Further, it is well understood by Entities across business and consumer groups.

We have recommended that a Debt Collector must ensure that its Responsible Managers, Collection Officers and any employees that conduct Debt Collection activities comply with RG 96 (Recommendation 15). The Regulator could place a similar compliance condition on an ADCL or a sub-licence (Recommendations 4 and 8).

Collection House submits that the conduct obligations should be legislated with a section of the National Debt Collection legislation in similar terms to that of section 47(1) - general conduct obligations of licensees, under the National Credit Act. For example, the National Debt Collection legislation could prescribe (based on the requirements of s47 NCA) that:

(1) A Licensee must:

(a) do all things necessary to ensure that Debt Collection activities authorised by the licence are engaged in efficiently, honestly and fairly; and

(b) have in place adequate arrangements to ensure that clients of the Licensee are not disadvantaged by any conflict of interest that may arise wholly or partly in relation to Debt Collection activities engaged in by the licensee or its Collection Officers; and

(c) comply with the conditions on the Licence; and

(d) comply with the National Debt Collection legislation; and

(e) take reasonable steps to ensure that its employees comply with the National Debt Collection legislation; and

(f) maintain the competence to engage in the Debt Collection activities authorised by the Licence; and

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(g) ensure that its employees are adequately trained and are and remain competent, to engage in Debt Collection activities authorised by the Licence; and

(h) maintain internal dispute resolution procedures; and

(i) be a member of an approved external dispute resolution scheme; and

(j) comply with any other obligations that are prescribed by the regulations.

Legislating good conduct obligations such as the above examples will provide both the Debtor and Debt Collector with a greater understanding, accountability, clarity and consistency of how Debt Collection activities are to be undertaken.

Consumer Advocate Conduct Obligations

It is our experience, that “not for profit” organisations that assist Debtors in the resolution of their Debts operate in an ethical and fair manner in their negotiations with Collection House. We also note that currently, parties carrying on Part IX and Part X Arrangements are regulated.

However, the “for profit” agencies that proclaim that they “repair credit” or “restore credit ratings” or are “advocates for Consumers” or claim that they can remove any payment default[s] or judgment default[s] from credit reporting agencies, or can negotiate an informal settlement or an informal arrangement (not being a Part X or Part IX arrangement under the Bankruptcy Act), are not regulated. These types of organisations cause Creditors, Debt Collectors and Debt Buyers much concern, cost and delay in the debt recovery process, to the extent that often, the representations of these groups to Debtors are potentially misleading and false and could be interpreted as an abuse of process.

We note that ASIC is aware of the various methods that these groups use to avoid regulation and achieve a “fee” for their service. Collection House submits that “for profit” businesses of this type, that purport to operate as advocates for Debtors in the Debt Collection process must be subject to the licensing obligations under the National Debt Collection legislation and/or be made to comply with the good conduct obligations and be accountable for their actions (Recommendation 18).

Trust Accounting Options

Collection House’s preferred option is not an Option provided by Consumer Affairs Victoria. Accordingly, we submit the following Option.

Collection House submits that the actual reality of the Trust Account options is that Contingent Clients will require Debt Collectors to ensure that collected money is not to be mixed funds and accordingly, must be put directly into a trust account or an account where the collected money is readily identifiable as money belonging to the client/creditor.

We do not propose a statutory trust for each client/creditor, rather as identified above, an account named as Debt Collector client/creditor trust account. We also submit that trust accounts, howsoever named, should be audited at least once per year.

Collection House notes that trust accounting requirements vary widely, as and between the States and the Territories. We submit that national harmonisation would be

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incomplete if the trust requirements were not stipulated in the National Debt Collection legislation.

We have recommended that the Regulator should impose a single, national system for trust accounting. Accordingly, we submit that a Debt Collector conducting Debt Collection activities must maintain a trust account in accordance with the National Debt Collection legislation (Recommendation 13).

We submit that the trust account requirements, for Commercial Agents under Chapter 12 of the Property and Motor Dealers Act 2000 in Queensland, are sufficiently robust and complete to be considered for the National Debt Collection legislation. This legislation provides, among other things, the following:

Part 1 – Division 1 – trust accounts – application to Licensees;

o Division 2 – Opening trust accounts – notice to regulator required whether opening, closing, or renaming;

o Division 3 – Dealing with trust money;

Subdivision 1 – Payments into trust accounts, receipts, investments and restrictions;

Subdivision2 – payments, when permitted;

Subdivision 3 – accounting to clients;

o Division 4 – disputes about trust moneys;

Part 2 – Audit requirements;

o Division 2 – provision about auditors, appointment and duration;

o Division 3 – audit of trust accounts, timing, requirements, reporting

Part 3 – Claim fund, establishment, application and agreement with financial institutions;

Part 4 – Freezing trust accounts and appointing receivers and special investigations.

We also submit that the National Debt Collection legislation should stipulate that Debt Collectors are required to have adequate insurances in place that a prudent business operator would have when conducting Debt Collection activities including receiving monies, holding and disbursing to the client or as otherwise directed.

Which policies are prudent, and the limit of indemnity provided under each insurance policy, should be determined by the Debt Collector. However, we recommend that each Debt Collector keep, and maintain, a fidelity insurance policy providing indemnity for $20,000, to redress any fraud occurring against a debtor when making a payment into a trust account.

We recommend that a Debt Collector must maintain a fidelity insurance policy that is adequate in terms of its amount, scope and other terms in accordance with the insurance requirements for Debt Collection activities (Recommendation 14).

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Complaints Handling Options

Collection House’s preferred option is a combination of both Option 2: Mandatory membership of EDR Scheme and Option 3: Mandatory internal dispute resolution.

We submit that the complaints handling requirements under the National Credit Act be adopted for the National Debt Collection legislation. That is, a licensed Debt Collector must maintain an internal complaints handling process based on Australian Standards (Recommendation 11), together with the Debt Collector becoming and continuing to be a member of an approved External Dispute Resolution Scheme (EDRS) (Recommendation 12).

In relation to EDRS, we submit that the Regulator ensure that the terms of reference for different EDRS are standardised as and between the providers, including but not limited to, the Financial Ombudsman Services, the Credit Ombudsman Service Limited, the Telecommunications Ombudsman, the Energy and Water Ombudsman, the Ombudsman Services and any other responsible Ombudsman for any of the Entities.

Finally, it is our experience that many Consumers do not bring their complaint to the attention of our internal dispute resolution process before seeking the EDRS assistance. Accordingly, we submit that the terms of reference include a requirement on the EDRS provider to ensure that the Debt Collector is first given the opportunity to resolve any complaint, before incurring a non-recoverable cost under an EDRS.

Administration Options

Collection House’s preferred option is Option 2: Transfer administration to a dedicated debt collection regulator.

We submit that the Regulator, the Australian Securities and Investments Commission (ASIC), be the Administrator of the National Debt Collection legislation as its dedicated debt collection regulator. We submit that the greater proportion of Debt Collection carried out in Australia relates to Licensed Credit Providers and their Credit related products (the Credit Industry). The Credit Industry is regulated by ASIC.

Debt Collection is intrinsically connected to the Credit Industry. Accordingly, we submit that the most appropriate Regulator would be ASIC (Recommendation 16).

Information Standards Options

Collection House’s preferred option is Option 1: the Status quo.

Collection House submits that in its experience, the majority of debts that are purchased do not contain up to date demographic information of the Debtors. Upon assignment, a notice of assignment is sent to the Debtor’s last known address that they provided the Entity. Often, Debt Buyers are required to resend this document upon locating the Debtor.

We do not support Option 2: standardised and prescribed information, becoming a requirement. Primarily, the information that is to be prescribed, would, in a majority of cases be sent to an invalid address for the Debtor. Thus, while the Debt Collector may be complying with this obligation, the Debtor would not benefit from the prescribed information. Thus, strict compliance with this option would frustrate the goal of the option.

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We do not support Option 3: mandatory disclosure upon request, becoming a requirement. For the same reasons given above relating to Option 2, a mandatory requirement to send out information would be frustrated by the invalid addresses of the Debtors.

We submit under the current legislative provisions, a Debtor can request information relating to the Debtor’s liability and indebtedness at any point in time. We submit if anything, that mirroring legislation to section 38 of the National Credit Code be replicated in the National Debt Collection legislation.

Educational Requirements Options

Collection House’s preferred option is Option 2: Modernise and harmonise statutory training standards.

We submit that as the industry inescapably grows as a specialised profession, so to does the requirement of Debt Collectors to properly educate, train and maintain Collection Officer’s qualifications to compliantly, effectively, efficiently and ethically collect debts.

We submit that Collection Officers must obtain a Certificate III in Mercantile Agents (FNS30410) within 12-18 months of the Debt Collector being licensed or the Collection Officer commencing employment with the Debt Collector (Recommendation 7).

During the intervening period, a Collection Officer should still be able to conduct Debt Collection activities provided that they are adequately supervised by a licensed Responsible Manager.

We also submit that Responsible Managers must be adequately trained to a Certificate IV in Frontline Management (BSB40807) level or another general relevant higher level qualification within 12-18 months of the Debt Collector becoming licensed or of the Responsible Manager commencing employment with the Debt Collector (Recommendation 9).

We submit that it should be the Debt Collector’s obligation to ensure that its:

Responsible Managers are sub-licensed;

Responsible Managers and Collection Officers are adequately trained within the timeframes and constraints of the Debt Collectors’ Australian Debt Collection Licence and the National Debt Collection legislation; and

Responsible Managers undertake at least 10 hours of continuing professional development in each calendar year.

ANNEXURE A – TERMINOLOGY – SCOPE OF THE DEBT COLLECTION INDUSTRY IN AUSTRALIA

In addition to our recommendations and response to the options, we attach by way of Annexure A, our definitions of certain terminology used in the debt collection industry in Australia.

In our experience, the terminology is often not fully understood or misused by commentators in the industry.

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Our recommendations and response to the options are based on the terminology set out in Annexure A and may be useful in any subsequent documents developed by Consumer Affairs Victoria or the Ministerial Council of Consumer Affairs in the harmonisation process.

CONCLUSION

For many years, Collection House has actively promoted the concept (now referred to as “harmonisation”) of there being uniform and consistent legislation, laws and codes of conduct across the debt collection industry in Australia.

We look forward to the development of the harmonisation of debt collection regulations in Australia that meets that objective.

We would be pleased to participate in any further consultation or meeting with Consumer Affairs Victoria or the Ministerial Council of Consumer Affairs in relation to progressing the harmonisation of debt collection regulation in Australia.

Yours sincerelyCOLLECTION HOUSE LIMITED

MATTHEW THOMASCHIEF EXECUTIVE OFFICER

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ANNEXURE A –

TERMINOLOGY – SCOPE OF THE DEBT COLLECTION INDUSTRY IN AUSTRALIA

(used throughout this Submission and could potentially be adopted for National Debt Collection)

Active Debts means active, current and performing Debts that are not Distressed Debts.

Australian Debt Collection Licence means a licence issued under National Debt Collection legislation that permits a Debt Collector to carry on Debt Collection.

Collection Officer means the employee of a Debt Collector.

Consumer means a natural person or a strata corporation.

Control has the meaning given by section 50AA of the Corporations Act (Cwlth) 2001.

Credit means credit is provided if:

(a) payment of a Debt owed by a Debtor to an Entity is deferred; or

(b) the Debtor incurs a deferred Debt to an Entity.

Credit Contract means a contract under which Credit is or may be provided (regulated or otherwise).

Creditor means the original Creditor who provided Credit to the Debtor including any governmental agencies, government owned corporations, utilities (power or water), telecommunication providers, private or commercial businesses, individuals or insurers.

Debt means Active Debts, Distressed Debts and/or an amount of money owed or alleged owed, where:

(a) the Debtor is in default under the terms and conditions of the provision of Credit or a Credit Contract; or

(b) the Debtor is in default under the terms and conditions of the provision of Credit or a Credit Contract and the Entity has declined the provision of further Credit to the Debtor; or

(c) the Entity has terminated, cancelled, written off or charged off the Debt, by reason of the Debtor’s default or continuing default in repaying the money under the terms and conditions of the provision of Credit or a Credit Contract.

Debt Buyer means an Entity that purchases a Creditor’s or a Licensed Credit Provider’s Debt at a discount, making a profit if the amount recovered exceeds the purchase price of the Debt and the cost of collection.

Debt Collection means providing debt collection activities that involves contact with the Debtor by and through telecommunications, e-communications, correspondence and by commencing Court proceedings to recover Debts from Debtors, but does not include Face to Face Collections with a Debtor. It includes:

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(a) In-house Collections meaning an Entity that conducts in-house collection of its Debts.

(b) Contingent Debt Collections meaning a Debt Collector acting as an outsourced collection agent for an Entity.

(c) Purchased Debt Collections meaning a Debt Collector conducting in-house collections or acting as an outsourced collection agent for a Debt Buyer.

Debt Collector means a person who, in the ordinary course of business provides Debt Collection activities to or for Entities including Creditors, Licensed Credit Providers, Factors, Debt Buyers, in-house collections, receivables management companies, assignees, outsourced collection agents (contingent debt collectors paid either a flat fee for pursuing overdue accounts, or a commission based on the amount of money recovered), lawyers and Australian government bodies.

Debtor means a person, a company or a Consumer that owes a Debt to an Entity.

Distressed Debts means inactive, terminated, cancelled, non-performing, written off and/or charged off Debts of an Entity.

Entity means a person, partnership, company or trust and includes:

Creditor

Debt Buyer

Factor

Licensed Credit Provider

Face to Face Collections means, when providing Debt Collection activities, collection methods that include field calls, repossessions, process serving or other personal contact with Debtors, where an essential part of recovering the Debt is face to face contact with the Debtor, either by attending a place of residence or other place, including a place of employment.

Factor means a person or a company that provides cash flow finance to a Creditor in exchange for the absolute assignment of an Active Debt at a discount, making a profit if the amount recovered exceeds the purchase price of the Debt and the cost of collection.

Fit and Proper Person (for Debt Collection) means where the Debt Collector is a body corporate, each active director of the body corporate who performs management duties or exercises control in connection with the Debt Collection activities of a Debt Collector.

Licence means an Australian Debt Collection Licence or any sub-licence.

Licensed Credit Provider means a person or a company that provides Consumer Credit to Debtors, and includes a prospective Consumer Credit provider (taken and modified from section 204 of National Credit Code).

Licensee means the person holding a current Australian Debt Collection Licence.

National Credit Act means the National Consumer Credit Protection Act (Cwlth) 2009.

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National Credit Code means Schedule 1 to the National Credit Act.

National Debt Collection means a single, standard, national regulation of Debt Collection for Australia.

Regulator means the Australian Securities and Investments Commission.

Responsible Manager for Debt Collection means the following people or subset of people:

(a) where the Debt Collector is a single director or natural person, the single director or the natural person; or

(b) where the Debt Collector is a body corporate, each Senior Manager of the body corporate involved in Debt Collection activities; or

(c) where the Debt Collector is a partnership or the trustees of a trust, each partner or trustee; or

(d) where a person employed by a Debt Collector supervises or manages more than 10 Collection Officers.

Securities Legislation means the Security and Investigation Agents Act (SA) 1995; or the Security and Investigation Agent Act (Tas) 2002; or the Commercial Agents and Private Inquiry Act (NSW) 2004; or the Commercial and Private Agents Licensing Act (NT); or the Private Security Act (Vic) 2004; or the Security Providers Act (Qld) 1993; or the Security and Related Activities (control) Act (WA) 1996, for each jurisdiction as the case may be.

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