This is the equivalent to the old challenging question of "what comes first, the chicken or the egg?"
Both the Institute of Mercantile Agents and Australian Collectors and Debt Buyers Association offices receive regular calls and messages each week from members of the public expressing frustration in relation to contacts from parties they understand or suspect to be collectors who more often than not are seeking out someone unknown to that individual: sometimes it might be seeking a previous tenant of their address; or someone who reportedly lived next door; or perhaps someone with the same surname.
The most common thread to these calls and messages is the concern of the perceived attempt by the party initiating the contact to deceive or be tricky. Well you may ask, what were the deceptions or the trickiness allegedly being used by those making such contacts? The refusal to say on privacy grounds exactly who they are and why they are calling!
Therein lies the disconnect between the position embraced by legislators and interest groups justifying strict privacy regulations and what the general community actually want and expect in their dealings in everyday activities such as someone making a telephone call to them. I'm sure many other Australians are frustrated by this overzealous "nanny state" privacy protection which makes even the simplest of transactions more convoluted and difficult to navigate than is really warranted.
Ever received a call from your health insurer, your bank or insurer and been annoyingly asked "before I can discuss with you the reason for my call can you please properly identify yourself". When this happens to me, my response is usually "Well yes I can, but you know who I am – can't you remember, you called me on my mobile telephone number and I announced my name as I answered the call!"
The ACCC/ASIC Debt Collection Guideline at Part 2: Practical Guidance specifically provides what a collector should do when:
"1. Making contact with a debtor
(a). Under the privacy laws, you have obligations to protect the privacy of debtors. When making direct contact, your first task must always be to ensure the person you are dealing with is the debtor. This must be done every time you make contact before you divulge any information about the debt, the process for its recovery or before providing any other confidential information.
(b). If you consider it necessary to divulge your identity as a debt collector before being sure that you are dealing with the debtor (for example, if requested by the person you are dealing with) then you may do so if that would not have the effect of divulging that the debtor has a debt. Particular care should be taken when speaking to a person at a debtor's workplace.
Example: Calling from or on behalf of an organisation with a descriptive name
If you are calling from or on behalf of an organisation whose name is more revealing or descriptive in relation to debt collection practices (for example, 'Collections R Us') then revealing the name of the organisation is likely to divulge the existence of a debt.
(c). The limits on disclosing information to third parties apply to the debtor's spouse, partner and/or family as much as they apply to other third parties.
(d). Having established the debtor's identity, you should then identify who you are, who you work for
and explain the purpose of the contact. Failing to clearly identify who is calling and the purpose of the call will most likely confuse the debtor and may lead to the debtor avoiding subsequent calls...."
Below as an example, is a recent email received by the IMA from a distressed individual:
I am receiving frequent calls from a debt collector on my personal mobile number regarding a debt that is held by a person a named 'Wahid' – a person whom I do not know, who lives at a different address, and whom I have never had any form of relationship with.
These calls have been ongoing since the beginning of this year.
The collector will not tell me how or why they believe I know this person or provide me with their contact details, and as such I have no way of knowing if it is the same agency contacting me on each occasion.
The agency in these calls advise me my details have been obtained from a 'public database'. I have an unlisted mobile number, which is not recorded on public databases. When I ask them to provide me with the name of the public database so I can have my details corrected, they refuse to provide it to me. The calls usually end with the agency refusing to answer any questions and hanging up on me.
A number of months back the NSW Sheriff attended my residential address and spoke with my wife regarding this debt owed by ‘Wahid’. They were satisfied we had no relation to the debt or the person and left but due to privacy reasons the Sheriff Officers could not disclose who had sent them. The calls (presumably from the agency) however, have continued.
I have had my phone provider place a trace on my phone number to identify the details of the caller, however as the agency does not call more than the required times each month the phone company cannot provide me any further details.
As the body representing debt collectors I am hoping you can assist me in some way with:
- identifying the agency contacting me and request they delete my contact details and cease contacting me; and
- providing me with details of ‘public databases’ used by collection agencies who I can contact to have my details corrected.
Telephone contacts with consumers are problematic for many industries especially for those where any element of sales is involved but the situation for collectors making legitimate calls is much more difficult given the initiating party is restrained from being upfront and open as to the purpose of the call until such time that the other party to the call has been properly identified!
Establishing the bona fides of any caller in order to have a meaningful communication with the other party is very much dependent upon explaining the purpose and the context of the call. This is simply achieved for most calls except for those made by collectors!
Consider these two typical business related calls: “Hello, this is Mary from Dr Smith’s office just calling to change your appointment time for tomorrow” and “Hi this is John from Curtains–R-Us, I will be at your place at 9.30am in the morning to do your measure and quote”.
In both examples, the party receiving the call can quickly understand the reason and recognise the legitimacy of the call and is not confronted or positioned for a wary, guarded or hostile response to a request to provide personal identification details before the caller can properly identify himself and the purpose of the call.
The adverse response often encountered to a contact made where the collector was unable to divulge the identity of his or her employer and the reason for the call is capably demonstrated by a complaint an IMA member recently received – a simple contact quickly spiralled to a complaint all because the collector correctly followed the privacy requirements:
The call initiated in response to an updated contact point for a borrower in default on an account was to a third party who took offence when the collector politely declined due to privacy reasons to name the company she was calling from.
The third party was insistent in wanting to know the identity of the company involved and would not accept that due to privacy reasons the caller could only say she was from a financial company and couldn’t provide the company’s name. The third party demanded the call be transferred to a supervisor and in the process of that transfer, the call connection was lost.
The collector’s supervisor recontacted the third party again, advised her name and apologised for the earlier call connection being lost. She attempted to assure the third party as to the need to make contact with the consumer – the third party however was determined to argue about the lack of identification of the company being provided. The third party asserted the first caller and now the supervisor had breached the privacy laws by not providing the company’s name and that she had previously worked in a government department so she knew!
The third party expanded that older people if contacted as she had been might give out information and so it was a breach of privacy! The supervisor attempted to acknowledge the third party’s perspective and to explain the onus in any conversation is always upon the person giving information not to breach another’s privacy.
The third party returned to insistent criticism of the initial caller’s refusals to identify the company she was calling from – the supervisor again explained she and the original caller were restrained from providing such information due to a specific regulator requirement. The third party asserted she knew who the regulator was and so the supervisor invited her to check the guidelines – however it was quickly apparent the third party was unaware of the identity of the regulatory agency involved.
Increasingly agitated she would not be provided with the name of the employer involved, the third party then asserted an intention to call Kochie (Sunrise) and Lisa (Today show) to see if it is allowed!
The supervisor explained a journalist with either morning TV show would be able to check industry requirements and confirm all the dealings in the telephone calls had been done correctly and again expanded it would be easier for the two staff to provide their employer’s name but the intention is to protect the privacy of the individuals they are attempting to speak directly with.
Finally the third party claimed that “calling” is harassment – this was politely disputed with the supervisor noting she saw no evidence of any harassment. Several attempts to engage the supervisor in further argument were unsuccessful with the supervisor drawing the third party back to the reason for the call. At this impasse, the supervisor advised she was happy to stop calls to the third party’s number – the third party advised she would tell her fellow residents never to provide information to any caller from financial companies and then terminated the call. If we were scoring this contact the result would have to be judged as: Privacy frustration 1 vs Effective engagement Nil!
Written contacts can be problematic too. Another example of the frustration of third parties encountering privacy restrictions was evident when the IMA office was contacted some months back by an elderly female who was very upset that she was receiving mail at her address for a previous occupant for whom she did not know a forwarding address.
Instead of simply returning the mail to sender with an appropriate notation such as “Not Known At Address” – this third party explained she was so offended by the steady stream of mail being received in her mail box for the previous occupant and so she googled the PO Box address on the back of one of the envelopes and discovered it related to a collection firm based in Sydney.
The Third Party then decided she would call that collection agency to get her address removed from their records only to discover she was met by a refusal on privacy grounds to discuss whether the company were chasing the previous occupant for a debt as the third party was unable to identify herself as the consumer concerned or as an authorised representative of the consumer.
The next call was to the IMA to complain about the collection company for writing to her and then refusing to discuss anything about the previous occupier of her address on privacy grounds.
Impact of contacts
Whilst writing this article, a call was received at the ACDBA Office from a female who had moved from Australia to Singapore and was having difficulties with repeated contacts from an Australian collection firm (which she named) asking her to pass on a message to her boyfriend who remained in Australia. She claimed she had received perhaps 6-7 calls over recent months from the same collector who was getting increasingly insistent that she pass on a message to her boyfriend to call the collector. She explained she had passed on the earlier messages but could hardly compel her boyfriend to call in response.
This female explained the collector seemed to believe her relationship with the boyfriend was much closer and more serious than it actually was and despite her explaining they were no longer living together but simply remained friends, the calls to her workplace in Singapore asking her to pass on messages had continued.
In response to the question of how the collector held her workplace number in Singapore she explained the collector had claimed to have tracked her down via her LinkedIn profile, established her new employment and then called through. According to the third party, the repeated calls to her workplace were now causing her embarrassment with those working in close proximity taking an interest such that she had to explain that she did not owe any money but the caller was asking for a message to be passed onto someone else.
Not a scam!
Coincidentally, a male called through to the IMA Office around the same time to complain about a call he had received from the same collection firm. He gave an account that he had received a call and then before the caller would proceed further to explain the reason for the contact, had asked for his personal identification details. The caller told him the company's name but otherwise would provide no other details or the context for the call being made to him.
When he refused to provide his personal details, he claims the caller became "rude and hung up". Upset by this call, this male then googled the company name and discovered it was a collection firm so he called that company as he believed he had no outstanding accounts and wanted to know why it was calling him. On this occasion he spoke with a collector and then a manager – neither would assist him and were again in his view rude – he admitted however he had again refused to supply any personal identification details as he was genuinely concerned the call to him may have been part of some elaborate scam.
Frustrated by the discussion with the two persons at the collection firm, he then rang the IMA to complain. IMA staff explained the reason for the company's request for him to personally identify himself was to ensure it did not breach privacy and collection regulatory obligations.
After establishing the company concerned was a member of IMA and obtaining an alternate contact number for the company this male decided he would again call back to the company and provide his personal details so as to get this matter sorted out. He apparently spoke to someone who he later said was polite and so he provided all his identification details – in return he was able to establish the debt being chased actually belonged to a former acquaintance of his from 5 years earlier – as it happened, the male was able to provide a contact number for that acquaintance's girlfriend.
The male subsequently called back to the IMA to advise the outcome of his further interactions with the collection company and to thank the IMA for the reassurance and assistance provided in response to his concerns.
Something has to give
Undoubtedly privacy and regulatory obligations surrounding contacts made with debtors and third parties is well intended but from the industry's perspective it seems those obligations are increasingly causing quite some collateral damage. Damage to the reputation of responsible professional collectors diligently meeting those obligations as they go about their work and more importantly, real and costly impediments to effective engagement between collectors and debtors to quietly, calmly and efficiently discuss an outstanding account.
The same regulators who have established the privacy and collection obligations surrounding contacts are amongst those which regularly implore Australians to watch for deceptive scams and to always avoid passing their personal identification details to persons they do not know.
This is the conundrum – the role of identification during telephone contacts before the purpose of a call is disclosed. The reality of society today is that most Australians are aware of and have access to the power of the internet where search engines such as Google are so fast and helpful in returning results such as listings or specific telephone numbers or addresses. Leaving a non-descript message inviting a return call to a specific telephone number or a letter with just a return address on the reverse will not stop determined individuals from making their own online enquiries to learn more about the message left or the identity of correspondence received and intended for others.
The examples detailed above of individuals distressed by contacts received where the caller is refrained from divulging the context or purpose of the call made until first prevailing upon the receiving party to divulge his or her personal identification details clearly demonstrate the artificial regime prescribed under the privacy and regulatory guidance is increasingly unworkable as it fails to meet what contemporary Australia requires when a contact is made in this age of being on guard to the possibility of scams being perpetuated against them.
The industry is willing to meet and discuss the issue of appropriate contacts with legislators and regulators as clearly something has to give to restore common sense to such simple everyday transactions as a telephone contact.
*Alan Harries is the CEO of the Institute of Mercantile Agents and Australian Collectors & Debt Buyers Association – he can be contacted at firstname.lastname@example.org