Debt collectors warned after complaints

Debt collection agencies have been put on notice by the Commerce Commission after it warned a company about its actions amid a spike in complaints about the industry.

The commission said it had warned Intercoll it had likely breached the Fair Trading Act after the company told a debtor that if she wanted to question her debt she would need to contact the company she originally owed money to.

“The debtor was told she needed to pay Auckland-based Intercoll the disputed amount, and if the dispute with the original lender was successful, then Intercoll would pay the money back,” the commission said.

But that was not true because Intercoll had bought the debt and the woman who owed the money should have been able to dispute it directly with the company.

The commission also warned Intercoll from making statements which gave the impression that court action was inevitable if the debtor did not pay up when it was only a possibility.

Intercoll did not wish to comment Commissioner Anna Rawlings said complaints about debt collection had increased in the past year and debt collectors needed to ensure they had systems in place to comply with their legal obligations.