This website is for use by legal professionals (lawyers and law practices) only. If the information is used incorrectly, you could risk losing money or your legal rights. If you are a member of the public looking for free advice about your legal problems please visit legalaid.vic.gov.au, or contact our Legal Help advice line on 1300 792 387, Monday to Friday from 8 am to 6 pm. 

If you decide to use or rely on the information or make decisions based on the information in this website (which VLA does not recommend) VLA is not liable to you or any third party in any way for any loss, damage, costs or expenses you or they may suffer or incur as a result.

Who can be a debt collector?

information about registration, and people who are prohibited from working as debt collectors.

Unless a person gets special permission from the Business Licensing Authority, they are not allowed to engage in debt collection if:

  • they are under 18
  • they are insolvent
  • they are a 'represented person' under the Guardianship and Administration Act 2019 (Vic)
  • their private security licence has been cancelled or suspended within the last 5 years
  • they have been found guilty of fraud, dishonesty, drug trafficking or violence (punishable by 3 months jail or more) within the last 5 years
  • they have been found to have been involved in using undue force, harassment or coercion by the Australian Securities and Investment Commission (ASIC) or an equivalent law in another state or territory, or
  • they have been found guilty of engaging in any prohibited debt collection practices.

These people are referred to as 'prohibited persons'.

See s. 47—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window) and Prohibited behaviour by debt collectors.

Penalty

If a prohibited person is found to have engaged in debt collection they may be fined or jailed. The maximum penalty is 240 penalty units or 2 years jail.

See s. 47(2)—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window).

When companies are prohibited from debt collection

A corporation or body corporate is not allowed to engage in debt collection if:

  • one or more of the directors is a prohibited person
  • the company is effectively managed or controlled by a prohibited person
  • they are a body corporate that is externally administered, or
  • they have been they have been found guilty of engaging in any prohibited debt collection practices (under s. 45).

Penalty

The maximum penalty for a body corporate or company is 1200 penalty units.

See ss. 45, 47(1)(b)—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window) and Value of penalty and fee units

When the Business Licensing Authority (BLA) may give permission

A prohibited person or corporation may apply to the Business Licensing Authority for permission to collect debts. They must use the prescribed form (See Forms). The BLA must not give permission to anyone younger than 18 years or to a represented person under the Guardianship and Administration Act 2019 (Vic).

The BLA may give permission only if it believes that it is in the public interest to do so. They may require that special conditions are met and they may charge a fee.

Anyone whose interests have been affected by the BLA decision may seek a review of the decision at the Victorian Civil and Administrative Tribunal (VCAT). They have 28 days to seek a review. Time starts from the date of the decision or the date that a written statement of reasons for the decision are given.

Note: The Business Licensing Authority is now part of Consumer Affairs Victoria.

See Business Licensing Authority Victoria(opens in a new window)

See ss. 48, 49, 50, 51—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window)) and Forms

When debt collectors have to be registered

Sometimes, when creditors have unpaid debts owing to them, they 'sell' these debts to specialist debt collection agencies. All debt collection agencies must be registered with the Australian Securities and Investments Commission (ASIC). Only registered debt collectors may collect debts.

Debt collectors don't need a credit licence if they are registered under a state scheme.

More information

Legislation

Australian Consumer Law and Fair Trading Act 2012 (Vic)

  • s. 45—prohibited debt collection practices are explained
  • s. 47—explains when a person is a 'prohibited person'
  • s. 80—certain people are prohibited from acting as debt collectors
  • s. 48—applications for permission to engage in debt collection
  • s. 49—when the authority will give permission
  • s. 50—conditions that may be imposed by the authority
  • s. 51—person who is affected may apply for a review of the BLA decision at VCAT

See Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window)

Guardian and Administration Act 2019 (Vic)

  • s. 3—defines a 'represented person' as someone who has a guardianship or administration order in effect

See Guardianship and Administration Act 2019 (Vic)(opens in a new window).

Private Security Act 2004 (Vic)

  • s. 25(2)—when the Chief commissioner (of police) must refuse to grant a private security individual licence
  • Division 5—disciplinary proceedings
  • s. 47—immediate cancellation of licence or authority to carry on activity
  • s. 61—court may cancel or suspend licence

See Private Security Act 2004 (Vic)(opens in a new window)

Australian Securities and Investments Commission 2001 (Cth)

  • s. 12DJ—harassment and coercion
  • s. 12GXC—amount of penalty

See Australian Security and Investments Commission Act 2001(Cth)(opens in a new window)

Reference

Consumer Affairs Victoria

The Business Licensing Authority, is part of Consumer Affairs Victoria. The CAV site has information about the licensing and registration of debt collectors.

See Consumer Affairs Victoria—Debt collectors(opens in a new window).

Business Licensing Authority

See Business Licensing Authority Victoria(opens in a new window).

Value of one Commonwealth penalty unit

The penalty scales under Commonwealth law are different to those under Victorian law. Commonwealth penalty scales are explained in the Crimes Act 1914. The current rate is $222.

This only applies to offences committed after 30 June 2020.

See:

This amount is indexed

This amount is indexed and so increases from time to time to retain the real value of the penalty. Immediately before 1 July 2020, the penalty amount was $210.

Updated