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Department of Justice and Community Safety

HARASSMENT AND COERCION

 

Section 26 of the Fair Trading Act (the Act) prohibits the use of physical force or undue harassment or coercion towards consumers. A business person may try to use harassment or coercion to try to force the consumer to purchase goods or services or to obtain payment. Harassment or coercion for either of these reasons is an offence.

Prior to the introduction of this Act, there had been numerous instances in the ACT of consumers being coerced and harassed by debt collectors. Section 26 of the Act was a response to this problem and seeks to ensure that debt collection is carried out in a professional and responsible manner. Whilst creditors are allowed to take all reasonable steps to recover debts neither they nor people employed by them to collect debts are allowed to use violence or intimidation to do so.

What constitutes harassment and coercion?

The Act specifies several types of behaviour which are considered to be examples of undue harassment or coercion. These examples are not an exhaustive list but merely set out some of the well known tactics that creditors and their agencies have used.

Documents

The use of certain types of documents is prohibited under the Act. A person may not present a consumer with documents which are likely to mislead him/her. This may include documents which appear to have been issued by a court or some other official organisation, but in reality are not official documents. Commonly, such documents may be used in relation to a debt, telling the person what will happen if they do not pay the debt. It is also a breach of the Act to serve a summons which has not been issued by a court.

If, however, the documents had been issued officially, presenting them to you would not constitute a breach of the Act.

A person may not use a letterhead which could deceive someone. This includes someone who is not a solicitor or an employee of a solicitor sending someone letters on paper which had the letterhead of a (real or non-existent) law firm. It also applies to people who are not debt collectors sending letters on a (real or non-existent) debt collector's letterhead.

Information

It is an offence for a person to give a consumer false information about what would happen if he/she did not pay his/her debt. It is also an offence to give out, or even threaten to give out, information about someone's debts to people who do not have a legitimate interest in such information. For example a collector could not threaten to tell a persons' workmates about his/her debts, unless these people had some legal interest in financial affairs of that person.

Other forms of harassment

A person may not intimidate someone into doing business with them or paying their debts by impersonating bailiffs or police. Likewise it is an offence to carry or threaten someone with dangerous weapons.

The Act also makes it an offence for someone to communicate with another in an unreasonable manner in order to secure his/her business or money. What is unreasonable would depend on the situation; however, verbal abuse is likely to be considered unreasonable in most cases. Over-frequent requests for payment or patronage are also likely to be considered unreasonable.

It is also illegal to harass people associated with a debtor, to try and force a debtor to do something. For example, a collector may not harass a debtors' family in order to force him/her to pay the debt. This type of behaviour is illegal and is also considered to be harassment.