THE Federal Privacy Commissioner has effectively set a new standard for the debt collection industry as a result of a settlement with Alliance Factoring.
Commissioner Malcolm Crompton said Alliance had agreed to change its debt collection practices following discussions with his office.
In future, people who receive letters of demand from Alliance requesting payment of an outstanding debt will have at least 28 days to respond, rather than the 14 days that was previously decided by the company.
The new procedures were agreed following public com-plaints to the commissioner, whose role is to protect the privacy of personal information.
It is understood the complaints related to Alliance’s procedures in dealing with consumer debts purchased from Telstra.
Alliance is a wholly owned subsidiary of Australian Stock Exchange listed company Baycorp Advantage.
Under the old procedures, people could be listed as being in default after only 14 days of receiving a letter of demand.
Mr Crompton said listing within that time frame was technically not a breach of the Privacy Act, but was not “good privacy practice”.
“Fourteen days was not a long enough time frame to allow people to verify the details of the old unpaid debts,” he said.
“Twenty eight days sets a more reasonable minimum standard.
“Alliance Factoring has also assured us that it will extend the period beyond 28 days where a person is waiting to receive extra information, such as invoices or bills, regarding the debt.
“During discussions with my office, the company demonstrated a positive approach to working with us to implement good privacy practices.”
Mr Crompton said his office would continue to monitor the situation and would investigate a number of remaining complaints regarding Alliance Factoring’s debt collection practices.
