The Federal Court has ordered a debt collection firm to pay $750,000 in penalties for intimidating and harassing two people that had outstanding Telstra bills.
The ACM Group Ltd was judged earlier this year to have violated Australian Consumer Law in leading an ‘unconscionable’ pursuit of two former Telstra customers – one a stroke victim in a care facility who could barely speak, and another a single parent in dire financial circumstances.
When the Australian Competition and Consumer Commission first brought the case to court in June 2016, it alleged that ACM phoned the stroke victim more than 40 times to demand payment, despite being told by the care facility that he was disabled and unable to communicate.
On some occasions the consumer was forced to get on the phone to utter single words like “stroke”, “no” and “speech” in a vain attempt to prove to ACM staff he was disabled.
“ACM’s continued harassment and intimidation of a care facility resident who had difficulty speaking after suffering multiple strokes is one of the worst cases of unconscionable conduct we have seen in the debt collection sector,” said ACCC commissioner Sarah Court.
“ACM’s conduct towards another consumer who was in difficult financial circumstances, which included giving false information and making empty threats of court action, was also particularly egregious.”
Utility companies such as Telstra regularly sell their long-standing debts to specialist debt collection companies. The utility firm receives a small price from the collector then writes off the rest of the amount, while companies like ACM are left to recover as much as they can from the consumer.
A Telstra spokesperson said back in 2016 that “collection activity is being conducted on behalf of the new owner, not on Telstra’s behalf” and that the telco sells debt to a third party only as “a last resort”.
The court, while not fully meeting ACCC’s demand for a $1.1 million penalty for its treatment of the stroke victim and $550,000 for the single parent, ordered ACM to pay the consumer watchdog’s legal costs.
Commissioner Court said the penalty would be a signal to entire debt collection sector about their behaviour.
“Unconscionable conduct such as harassment, intimidation and coercion of consumers is unacceptable to not only the ACCC and the court, but the wider community,” she said.
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