It seems that we are well and truly into Election mode here in Australia and the media has definitely not let up on this. There has been a very thorough campaign drive to get Australians to enroll to vote and having twin boys just turn 18 has also highlighted this in our household.
I know some of you savvy business people may be thinking this would be a great time to head down to the electoral office and have a look for fresh information on some lost debtors. If you weren’t thinking of this and now are please read on, as there are some very large consequences for misusing that information that I would like to make you aware of.
What the Institute of Mercantile Agents Say
Recently at the Annual Institute of Mercantile Agents Conference the electoral role came up in discussion as an issue of privacy and the rules around using it as a method of finding people who owe money. The institute’s direction to members was that the electoral role was not an acceptable place to search for debtors as there are strict rules around the use of the information on the role. The CEO Alan Harries outlined the dangers of misuse and fines that can be incurred if found guilty of an offence.
Two Important pieces of information
What I would like to highlight here for you is two important pieces of information from the electoral commission website which Mr Harries was eluding to. Please find as follows;
- An electronic copy of the current electoral roll (e-roll) is available for public inspection at any AEC office. You may inspect the publicly available electoral roll for the purposes of:
• Checking your own enrollment details, or
• Making an objection to the enrollment of another elector.
You may not copy, record or photograph any information from the electoral roll with any electronic device.
- The roll is not available for sale in any format. Consistent with the restrictions that are in place for roll information provided under section 90B of the Commonwealth Electoral Act 1918 (section 91B contains offences on the commercial use of section 90B information with penalties of up to $170 000), the AEC discourages any inspection of the roll information that involves some commercial or other non-electoral use of this information.
As you can read there are large penalties up to $170 000 for misuse of the information.
Further to this I would like to let you know that BCA Debt does not use the electoral role as a method of finding debts, BCA Debt use paid legitimate searching companies for the purpose of finding your debtors and the staff of BCA Debt follow strict guidelines when searching for people.
Breaching a Persons Privacy
I would also like to point out that breaching a person’s privacy has now become something that is not taken lightly by us or the industry we work in and I cannot stress enough how important it is for all businesses and their personnel to be conversant with the ASIC/ACCC Debt Collection guidelines for collectors and creditors.
No matter how frustrated we get at the people who owe us money, when it comes to debt collection you must be careful you do not defame your debtor.
As you know being owed money comes with a myriad of emotions and the tendency to voice opinions about the person who owes you money. Whilst I understand the obvious need to vent frustration it can come to the point where you may be defaming that person.
Well you have defamed a person if you make statements about them that
A defamatory statement can be verbal or written. The statement must be published or made known to other persons other that the person being defamed. Defamation includes talking about that person in conversations to other people, writing about the person in articles, on websites, through email or other communication.
Even a private conversation in a pub or restaurant could be overheard and result in defamation proceedings.
All parties to any publication as explained above that defames a person are liable for the defamation, not just the author. This means that if you receive an email or letter that includes defamatory information and forward or distribute it, you can be sued as well as the author.
Just remember, you never know where an email may end up. If you have defamed a person you may be liable for damages (money), however if you can prove the defamatory information is substantially true you can’t be liable. Although in this case you may want to make sure your defense is watertight.
No matter what you must be careful you do not defame your debtor.
I am not sure if many business realise there has been changes to the privacy laws and these changes affect everyone in business who collects information from their customers.
The privacy act now includes 13 new harmonising Privacy Principles, known as the 13 APP (13 Australian Privacy Principles).
The first thing you need to know about these principles is, if you breach them you may be up for a very hefty fine, the privacy commissioner has the power to seek civil penalties of up to $1.7million. Not only that, if there is a breech and a civil penalty is imposed by the commissioner the individual whom has been affected can seek compensation. This compensation could include a recompense for hurt feelings.
Hey Nichola! Did you say ‘hurt feelings’... Yes I said hurt feelings.
OK, from now on make sure you do not put anything into your notes that is derogatory, nasty or makes the person look or feel bad in their eyes or the eyes of someone else.
The privacy principles are about protecting personal information, this is the information on individual people.
So who is an individual person in the context of your business?
Basically any information that you collect about a human being is now protected by the privacy laws and there is two types of information.
The difference between these two is, now you cannot collect sensitive information on an individual. This also means that you cannot write in your notes any information about a customer that is sensitive. You can only write information, that is relevant to your business that would be required in the ordinary cause of your day to day activities.
The information you collect must be relevant, you cannot keep information incase you may use it later, it must be relevant to the moment. Not only that, you must make sure that the information you collect is correct at all times and if a customer supplies you with any changes you must make those changes.
Also the Privacy Law warrants that if an individual requests to see the information you have collected on them, you must give them access to it. They also have a right to correct their information.
Moving Forward: When it comes to handing personal information over to a third party you now must have expressed permission from your customers.
Expressed permission means that your customer must sign off on and agree to you passing their information on.
Then your customers must sign that document.
There is more info at http://www.oaic.gov.au/
It's just unbelievable how much the debt collection industry has changed and now there are more changes about to happen in the Credit Providers arena.
As of the 14 March 2014 new laws will come in that will change the way credit is given to consumers.
This will undoubtedly have an affect on business in general, the changes have been bought in to enable Credit Providers to cross reference consumers credit information. The information provided on a consumers credit file will now include payment history on all credit providers accounts.
What does this mean:
What does this mean for businesses?
In summary business will need to be aware of those customers who change their payment habits, it should ring alarm bells if a customer who normally pays on credit card is now asking for credit.
Ensure you have all current details of your customer and know who they are.
This is a link to an excellent website that explains how the new system works, I encourage all to have a really good look at it, it effects us all.
Don't think you will be able to access a consumers credit report because this is not legal, only those with a credit providers licence will be able to access this information. The fines are huge for a breach so it wouldn't be worth trying.
All I can do is urge you to have a good poke around the http://creditsmart.org.au/ website.
What is a Statute Barred Debt?
These are debts that have reach the statutory limitation period. This means that the debt has reached an age where it is no longer legal to pursue.
Each state of Australia has a period of time where a debt can be pursued, and has legislation in place that outlines what happens when the limitation period has expired.
Limitation periods for unsecured personal loans and credit cards and the majority of debts sold or referred to a collection agency will arise from simple contracts. In all states the limitation period for this type of debt is 6 years, except the Northern Territory where it is 3 years.
These are debts following a court judgment
All states are 12 years except South Australia and Victoria where it is 15 years.
This usually starts at the time the debt is entered into. However it is not always that straight forward. If a payment arrangement is entered into or the debtor acknowledges the debt in writing the period of limitation recommences at this time.
There is a section in the ASIC / ACCC Debt Collection Guidelines around collecting on statute barred debts, I encourage all businesses that have an older debtors ledger to ensure that you are not following up on these types of debt and to have a good read of the guidelines.
Please find a copy of this document below.