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The financial services regulator has taken a debt negotiator to court over allegations of misleading, threatening and coercive conduct.
The Australian Securities and Investments Commission (ASIC) has begun civil penalty proceedings against A&M Group Pty Ltd (A&M Group), a registered debt agreement administrator trading as “Debt Negotiators”, over allegations of misleading, false, threatening and coercive behaviour towards debtors who missed payments.
The proceedings follow claims that A&M Group sent text messages and emails to six separate debtors that included:
- Threats of fraud charges and imprisonment if they failed to make payments
- Threats to contact friends, family, work colleagues and landlords if debtors failed to contact A&M Group
- Falsely claiming that creditors were in the process of terminating the debtors’ debt agreements and were considering legal action
- Falsely claiming that, if their debt agreement was terminated and they were forced into bankruptcy, the debtors’ finances would be examined to determine if they had been able to make payments under their debt agreement
- Falsely claiming that if creditors obtained a garnishee order against the debtor, the creditors would be entitled to take 80 per cent of the debtor’s income
ASIC is also alleging that A&M Group repeatedly contacted, or attempted to contact, uninvolved family members, friends and work colleagues of the six debtors, as a means to embarrass or intimidate them to contact the debt negotiator.
This conduct is alleged to have occurred from 30 January 2018 to 19 February 2020.
As per the concise statement, this behaviour is in breach of sections 12DA and 12DJ of the Australian Securities and Investments Commission Act 2001.
A&M Group was the registered debt agreement administrator for all six individuals.
At all relevant times, A&M Group is also said to have carried on a business as a registered debt agreement administrator.
As stated by ASIC, A&M Group is the second largest of 34 registered debt agreement administrators in Australia, covering approximately 5,060 debt agreements, or approximately 14 per cent of the market, as of October 2021.
“Threatening or otherwise unduly harassing or coercing debtors is against the law,” read a statement supplied by the regulator earlier this week (17 November).
“ASIC is concerned that this alleged conduct may cause harm to consumers already experiencing financial difficulties and under significant stress.”
ASIC has said that the proceedings will be listed for directions on a date determined by the court.
[Related: ASIC slaps Ferratum Australia with lawsuit]
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