Serious Thread: Debt collection issue


Before we start - I live in Australia.

Today I came home from work ill… and I am so glad I did because earlier this evening I received a call from a lady at a collection agency.

She mentions a debt that I apparently had in 2000 with a company that was bought out by another company who I didn’t pay and thus her company bought the debt. Now given that the original debt was in 2000 and therefore eight years ago I would normally be covered under what’s known as “statute barred”, which from what I can gather means that I can’t be taken to court. Apparently I made a payment to this account in June 2005 which restarted the clock.

Now I am fully prepared to admit the original debt which totaled $2200 (according to this lady that rang today ). However she told me today that since then they have been charging me interest on that amount of 27.5% and now the debt is $4000 (which makes no sense if you do the math).

I asked her why the account is still accruing interest charges if the account had been written off and bought by a debt collection agency. She advised me that it was in the terms and conditions I originally signed (in 2000). I asked if the account was still active at all, she said that it was classed as “on hold”. Tomorrow I plan to call the company that apparently now holds this account and ask why I haven’t received as statement for an account that is on hold. By law, in Australia, you must receive statements on any account that you hold with a bank or financial institution that is not closed.

So after all that my question here is: can a collection agency legally charge me interest on a debt that they have purchased?

:edit: I’ll also note that this debt does not appear on my credit history at all. I’m not sure if that means that the debt is classed as “statute barred”.




I think you aren’t going to find many QT3ers who can help with the ins and outs of debt laws in Australia. The best I can recommend is to do some investigation to validate the claims that this is a legitimate debt you owe and all their claims are factual. If it seems like they aren’t lying to me, do your homework on the relevant laws for your locality.


Get a lawyer. I can almost guarantee that the debt collection agency will at no point be honest with you. The lawyer can see to it that you only pay what you owe, and not any bullshit charges of which they never informed you beforehand. At least that’s true in the U.S.


Get a lawyer if the lawyer’s fees look likely to be small enough to justify the expense.


Debt collectors lie. That’s their job. Ask her to send what she’s saying to you in writing and I bet she won’t do it.


She might not even be a debt collector!


I’m a big fan of the old joke: What do you call 10,000 dead lawers at the bottom of a lake? a: A good start.

But in this case you really need to get one.


This. Then, should you get something in writing, take it to a lawyer.


In my experience almost nobody will ever put things in writing just because you ask them to. Their default answer is no. You have to start contacting them in writing via certified mail so that it looks suspicious that they wont reply. Then maybe they’ll start to consider it.


I second this. I’ve fought collections companies here over a bunch of bullshit, like not sending me statements and then charging me over-limit fees, late fees, and hiking up interest when they refused to take payments over the phone. They’ll send me a form to authorize deductions from my checking account for automatic payments, but they wouldn’t send me anything about the amount that they’d be withdrawing. They try not to have anything written down.


I would also just tell them that, if they intend to charge that much interest, that will make it expensive enough for you to employ a lawyer to handle this for you. They do NOT want that - these agencies typically rely on people being frightened/intimidated and know that a lawyer is likely to be trouble for them. It may be enough to tell them that, if they are asking for more than what you originally owed, you will let a lawyer handle this, to get them to quickly agree to take what they can get without the hassle (i.e. the original amount.)


Why would you care if it doesn’t show up on your credit history and likely never will?


Presumably there’s legal recourses for legitimate debt collection. Things like wage garnishment, repossessing stuff, etc. Again, I don’t know Australian law at all but I’m assuming they have a law or two in place that means people can’t just ignore debts.


She’s probably lying from the get-go and has no legal recourse. The debt is ice cold. I’d ask her not to contact me via telephone and request all correspondence be made through mail and would honestly expect her to just go away at that point.


Here’s what I told collection agencies when I was dealing with all of this shit. You want me to pay the full amount? You’re effing crazy. The next guy you sell this debt to will make me a deal at 33% or so and I’ll happily pay it off with them. If you can’t help with that, don’t call anymore.

And it was true, every single time.

Never believe anything a debt collector says (as others have said). They get paid to lie for a living. They only stick around in the job if they are good at it (and soulless! :p ).


In the US, refusal to do so is a violation of federal law, and carries some pretty hefty penalties. Whether you request it or not, they are required by law to send you written notice of the debt within five days of first contacting you. You are then required to respond to within 30 days of receiving this notice (even if it is simply to dispute the claim–which you should do in writing). You are under no obligation to pay anything to anyone if they will only speak with you over the phone, though.

And if you do dispute the claim (which you must do within 30 days), they are required to “validate” it, which entails them sending you itemized records of the original debt and any interest applied, full contact information for the original creditor, proof that the statute of limitations on the debt has not expired, and proof that they are licensed to collect debts in your state. They also must cease all collection activity until they can validate the debt, and if they can’t provide all of the above information, then they cannot collect on the debt at all.

Debt collectors will often try to skirt these laws, though, so it is indeed best to limit all of your communications with them to certified mail, and keep copies of everything you send them (and everything they send you). If they call you, do not speak to them beyond saying that you want all future communication to be written. They cannot legally refuse. Do not discuss anything further with them over the phone. Hang up on them, if necessary. If they continue to harass you by phone, report them to your state’s Attorney General.

Bear in mind, this is only for the US. You should do some research on debt collection laws in Australia, and perhaps speak to a lawyer or a credit counselor, if you think that’s necessary.


I don’t understand why the general response seems to be “Debt collection agencies lie - get a lawyer” and not “You incurred the debt - pay your fuxking bills”

Do you folks not believe in paying back the credit you use? Or is it the interest that offends you so?


I don’t understand why the general response seems to be Debt collection agencies lie - get a lawyer and not You incurred the debt - pay your fuxking bills…

I’m all about paying what you owe but, at the same time, debt collectors are scum. He should be aware of who he’s dealing with and get everything in writing.


I definitely recommend getting everything in writing, that way you know precisely what you are paying by way of original debt and interest.