Debt Collector Rights in Australia & Your Credit File (2026)

Quick Answer: Debt collectors in Australia operate under strict rules set by the ACCC, ASIC, and the Privacy Act 1988. They CAN contact you by phone, email, and letter within regulated contact limits; sell your debt to a third party; list defaults on your credit file if they hold the debt and follow Section 21D notice requirements; and take court action for judgements. They CANNOT harass or threaten you; contact you at unreasonable times (restricted to 7am–9pm weekdays, 9am–9pm weekends); list a default without sending a proper Section 21D notice; or inflate the debt beyond what is legally owed. If a collection agency listed a default on your credit file with procedural errors, Australian Credit Solutions can dispute it for removal under the Privacy Act 1988. 98% success rate. No Win No Fee. ASIC ACL 532003. Industry Excellence Award 2022, 2023 & 2024. 4.9/5 from 976+ Reviews. Over 5,000 Australians helped since 2014.

When a debt collector is pursuing you, understanding the rules isn't just helpful — it's your legal protection. Many collection defaults end up on credit files through procedural breaches that make those defaults disputable.

Who Are Debt Collectors in Australia?

Debt collectors are businesses that pursue debts on behalf of original creditors or that have purchased debts from original creditors. They operate in two main ways:

Contingency collectors: Acting on behalf of the original creditor for a fee or commission (e.g., Recoveriescorp collecting on behalf of a bank).

Debt buyers: Purchasing debts from original creditors at a discount and then collecting for their own account (e.g., a debt buyer purchasing a $5,000 Latitude Financial debt for $1,200, then pursuing the full $5,000 from the debtor).

Common debt collection agencies in Australia: Recoveriescorp, Probe Group, Collection House, Credit Corp, NCO Group, and many smaller operators.

Licensing: Debt collectors pursuing consumer debts (personal, household, domestic purposes) must operate under an ASIC-licensed credit provider if they intend to use credit reporting tools (listing defaults, accessing credit files). This is a critical point — unlicensed collectors cannot legally list defaults.

What Debt Collectors Are Legally Allowed to Do

Contact you — within regulated limits (detailed below)

Request payment — they can ask you to pay the debt

Negotiate a payment arrangement — they can agree to reduced amounts or payment plans

List a default on your credit file — if the debt is $150+, 60+ days overdue, AND they follow the Section 21D notice process (licensed collectors only)

Sell the debt — the original creditor or a subsequent collector can sell the debt to a third party; the new owner has the same rights as the original creditor

Apply for a court judgement — take legal action and obtain a judgement that appears on your credit file for 5 years

Garnish wages or bank accounts — only after a court judgement

Contact Rules — What Collectors Are Restricted To

Under the ACCC/ASIC joint debt collection guidelines, debt collectors must observe these contact restrictions: If you need professional help, explore the Credit Reporting Code and your rights.

Frequency limits:

• No more than 3 contacts per week per debtor
• No more than 10 contacts per month
• All contact attempts count (even unanswered calls)

Method restrictions:

• Cannot contact at your workplace if told not to
• Cannot contact a third party (employer, family) to pressure payment — only to find contact details if genuinely lost
• Must stop contact if you have a lawyer and provide their details

What Debt Collectors Are NOT Allowed to Do

Harassment and coercion: Cannot threaten violence, property damage, legal action they have no intention of pursuing, or use abusive language.

Misleading claims: Cannot falsely claim to be lawyers, police, or government officials. Cannot threaten arrest for unpaid debts (debts are civil, not criminal matters — you cannot be arrested for owing money in Australia).

Inflate the debt: Cannot add fees, charges, or interest beyond what is specified in the original credit contract or allowed by law.

Contact at unreasonable times or places: Cannot call at midnight, contact you at your workplace after you've asked them not to, or contact friends and family for pressure purposes.

List a default without proper notice: Cannot list a default on your credit file without first sending a valid Section 21D written notice to your current address at least 30 days before listing.

Access your credit file without a permissible purpose: A debt collector can only access your credit file for purposes permitted under the Privacy Act 1988 — primarily to locate you if contact has been lost, or to assess your capacity to pay.

The Section 21D Obligation — The Most Commonly Breached Rule

The single most common Privacy Act breach by debt collectors is the Section 21D notice requirement. Before listing a default, the collector must:

1. Send a written notice to your current address (not an old address — your address as known to them at the date of the notice)
2. The notice must advise of the impending default listing
3. State the amount
4. Give you at least 30 days to respond

Collection agencies are particularly prone to address errors because:

• Debts are sold between collectors, and address records aren't always accurately transferred
• Collectors sometimes use an address from the original creditor's records that is years out of date
• Internal systems don't always update addresses when consumers notify them

This is the most productive area for credit file dispute work — and the most consistent source of removable defaults from collection agency listings.

If a Debt Collector Has Listed a Default — Check These Things Immediately

Pull your credit report and for any collection default, check:

1. Who listed it? (Collection agency name vs original creditor)
2. What address was the Section 21D notice sent to? (Check your own address history)
3. What is the listing date vs the notice date? (Must be 30+ days apart)
4. Is the amount correct? (Compare to original debt)
5. Is the debt within the 5-year listing period? (Older than 5 years from listing = should be removed)
6. Did you have a complaint active with the original creditor when the debt was sold? (Active complaint = potential breach) For more, see our guide on afca complaint process for credit disputes in australia.

Case Study: Sandra, Perth — Collection Default Removed, $1,200 Inflated Amount

Sandra, 35, a retail manager from Joondalup, had a Credit Corp collection default of $1,200 on her Equifax file. The original debt was a $780 Vodafone account. Credit Corp had purchased the debt and listed the default for $1,200 — $420 higher than the original Vodafone debt amount, with no documented contractual basis for the additional amount.

The Section 21D notice had been sent to Sandra's old Scarborough address — she'd moved 8 months before the notice was issued and had updated her address with Vodafone (verified by her Vodafone account portal records). Credit Corp, as the debt buyer, had used Vodafone's old records without updating.

Australian Credit Solutions disputed on two grounds: (1) notice sent to outdated address in breach of Section 21D, and (2) default amount higher than the original debt with no contractual basis. Credit Corp removed the default within 36 days. Sandra's score improved from 461 to 567. Further recovery underway as CCR markers age out.

Sandra paid nothing until we succeeded.

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Frequently Asked Questions

Can a debt collector list a default on my credit file in Australia? Yes — debt collectors who hold a debt (either as the original creditor's agent or as a debt buyer) can list defaults on your credit file if the debt is $150+, 60+ days overdue, and they follow the mandatory Section 21D written notice process under the Privacy Act 1988. The notice must be sent to your current address at least 30 days before listing. Unlicensed collectors cannot legally access credit reporting services to list defaults.

What are debt collectors not allowed to do in Australia? Debt collectors cannot: contact you outside permitted hours (7:30am–9pm weekdays, 9am–9pm Saturdays, not at all on Sundays and public holidays); make more than 3 contacts per week or 10 per month; threaten violence, arrest, or actions they cannot legally take; falsely claim to be lawyers or government officials; inflate debts beyond what is legally owed; list a default without a proper Section 21D notice sent to your current address; or harass, intimidate, or use abusive language.

Can debt collectors take you to court in Australia? Yes — if a debt is valid, a collection agency or creditor can take you to court and apply for a judgement. A successful judgement appears on your credit file for 5 years and enables the creditor to pursue enforcement actions including wage garnishment and bank account seizure (following court order). However, court action involves legal costs and risk for the collector — it's usually pursued for larger, uncollected debts.

What happens if a debt is sold to a collection agency? When a debt is sold to a collection agency (debt buyer), the buyer acquires the same legal rights as the original creditor — including the right to collect the debt, list defaults (following proper procedure), and take court action. The original creditor's default listing typically remains on your file. The new collector may list a separate entry or update the existing one. The underlying debt amount should remain the same — collectors cannot legally add arbitrary fees beyond the original contract.

Can I dispute a collection agency default on my credit file? Yes — collection agency defaults are disputable on the same grounds as any other default: Section 21D notice sent to wrong address, notice period shorter than 30 days, debt amount incorrectly inflated, default listed beyond 5-year retention period, or original underlying debt was in dispute. These grounds are particularly common with collection agency defaults due to address record gaps in the debt transfer process.

How do I stop debt collector harassment in Australia? Document all contact (dates, times, what was said). If contact rules are being breached, send a written notice requesting all further contact be in writing only (this limits the collector to written correspondence). Lodge a complaint with the ACCC (accc.gov.au) and ASIC (asic.gov.au) if harassment continues. If the collector is attempting to collect a statute-barred debt (typically more than 6 years old in most states), seek legal advice — you may have additional defences. For more, see our guide on statute of limitations on debt in australia.

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Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.

Related reading: How to dispute a credit report error → | Your Privacy Act credit rights → | Default removal services →