Definition of a debt collector
A debt collector is a person or company that engages in debt collection for remuneration or reward. This includes:
- collecting, or requesting payment of, debts owed to another person
- repossessing goods or property other than real estate.
Eligibility and permission
You do not need a licence to be a debt collector, unless you fall into the category of prohibited persons or corporations. In that situation, you need permission from the Business Licensing Authority (BLA) to engage in debt collection.
These requirements do not apply if you are collecting your own debts, or debts owed to your employer in your capacity as an employee. However, it is an offence for a prohibited person to knowingly purchase, or accept an assignment of, a consumer debt from a creditor for the purpose of collecting that debt.
Prohibited persons or corporations
Individuals are prohibited from engaging in debt collection if they:
- are under 18 years of age
- are a represented person within the meaning of the Guardianship and Administration Act 1986
- are an insolvent under administration
- have in the last five years:
- held a private security licence or registration under the Private Security Act 2004 that was cancelled or suspended
- been found guilty or convicted in Victoria or elsewhere, of an offence involving fraud, dishonesty, drug trafficking or violence punishable by imprisonment of three months or more
- been found to have been involved in the use of physical force, undue harassment or coercion in contravention of section 12DJ of the Australian Securities and Investments Commission Act 2001 (Commonwealth) or an equivalent provision in an Act of the Commonwealth, or another State or Territory, or in the Australian Consumer Law and Fair Trading Act 2012
- been found guilty or convicted of any prohibited debt collection practice under section 45 of the Australian Consumer Law and Fair Trading Act 2012.
Corporations are prohibited from engaging in debt collection if they:
- are an externally-administered body corporate
- have at least one director who is a prohibited person
- are managed or effectively controlled by a natural person who is a prohibited person
- have, in the last five years:
- been found guilty or convicted of any prohibited debt collection practice under section 45 of the Australian Consumer Law and Fair Trading Act 2012
- been found to have contravened section 53A(2) or 60 of the Trade Practices Act 1974 (Commonwealth) or section 50 of Schedule 2 to the Competition and Consumer Act 2010 (Commonwealth) while engaging in debt collection
- held a private security licence or registration under the Private Security Act 2004 that was cancelled or suspended
- been found to have been involved in the use of physical force, undue harassment or coercion in contravention of section 12DJ of the Australian Securities and Investments Commission Act 2001 (Commonwealth) or an equivalent provision in an Act of the Commonwealth, or another State or Territory, or in the Australian Consumer Law and Fair Trading Act 2012.
Permission
Prohibited persons or corporations must apply to the BLA for permission to:
- engage in debt collection
- be a director of a corporation that engages in debt collection
- manage or effectively control a corporation that engages in debt collection.
Note: The permission process is not available to anyone under 18 or a represented person within the meaning of the Guardianship and Administration Act 1986.
To apply for permission, complete the Debt collectors permission application (Word, 206KB). Lodgement details are on the form.
Public interest
In considering whether granting permission would be contrary to the public interest, the BLA must weigh the maintenance of standards in the industry and the protection of the public in its dealings with debt collectors, against the factors relevant to the individual making the application.
These factors could include an applicant's age, the nature and seriousness of an offence (if applicable), the applicant's remorse in the case of an offence (if applicable), the circumstances surrounding the reason why the applicant is prohibited, and the applicant's conduct and behaviour since.
The BLA may also impose conditions on this permission if it considers it appropriate to ensure the ongoing protection of the public interest .
Penalties for engaging in debt collection if prohibited
Penalties may apply if you or your company fall into the category of prohibited persons or companies, and you:
- engage in debt collection without permission, or
- knowingly purchase or accept an assignment of a consumer debt from a creditor for the purpose of collecting that debt.
For more information, view Penalties - debt collectors.