201509 CM September

OPINION
DEBT DOWN UNDER
Leigh Berkley, President of the Credit Services Association, contrasts the Australian
collections industry and our own, and draws some interesting conclusions.
ALTHOUGH we are two nations
divided by many thousands of
miles, the similarities between
the Australian debt collection and
purchase industry and our own are many,
and there are also subtle differences that
make the comparisons more interesting.
The Australian Collectors and Debt
Buyers Association (ACDBA) was launched
in 2009 and currently has some 18
members that represent more than three
quarters (c75 – 80 percent) of the Australian
Collections market. It employs c2,800 staff
split between debt purchase (65 percent)
and contingent (35 percent).
In the Financial Year 2014, ACDBA
members attempted to collect AUS$14.9
billion in debts involving some 4.1 million
consumer accounts. It meant initiating
some 65.4 million contacts with consumers
that resulted in only 9,000 complaints
(managed by both Internal and External
Dispute Resolution Processes) – or as a
precise fraction, 0.0134 percent of the
total. AUS$2.2 billion of debt was actually
collected.
DEVELOPING CODE
One of the principal objectives in creating
the Association was to develop a Code
of Practice, and in doing so it has
encountered a number of challenges with
which we are all too familiar. Some ACDBA
members, according to ACDBA CEO Alan
Harries, have been enthusiastic, whereas
others have been more cautious. All agree,
however, that to have any real meaning,
and to be effective, the Code needs to
have universal member support. They
agree too that the primary role of the Code
is to raise standards and complement the
legislative requirements that already set out
how to deal with consumers.
So how far have they come? In August
of last year, the ACDBA developed
and adopted a summary of minimum
standards. It then created a framework
that led directly to the development of its
first draft Code. In drafting the Code, the
ACDBA leaned heavily on the experiences
of the UK’s Credit Services Association
since the similarities in the legislative and
regulatory landscapes proved to be a useful
template. In December, the Code was put
out to consultation, and the Association
also sought the feedback of the main
regulators. Having been further refined,
a new draft was submitted for further
comments in April of this year.
The ACDBA Code is similar to our own
not only in content, but also in its desire – to
set out and raise standards, and to make
compliance with the Code an obligation of
ongoing membership. It is also there to help
consumers better understand the treatment
they can expect, and what constitutes best
or bad practice.
So what of the consumer debt
landscape in Australia? Fiona Guthrie, the
26 September 2015 www.cicm.com
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