Fair Trading Amendment (Commercial Agents) Bill 2016
I contribute to the debate on the Fair Trading Amendment (Commercial Agents) Bill 2016. Let us be clear, people who owe money are often the most vulnerable in the community. As previously stated by the members for Granville, Swansea, Wyong and the Blue Mountains, all members have a responsibility to protect the rights of the vulnerable in our community—those with mental health issues, addiction issues, those suffering housing stress, homelessness and illness. Often the most vulnerable people in our community go into debt against their wishes.
This bill will affect another vulnerable group: those that have acquired sexually transmitted debt, or relationship debt. If a person were to assist their partner to purchase an item or service because that partner cannot afford it, or does not have a credit rating enabling them to increase their own debt, they will be threatened by this bill. One scenario is a young woman who assists her partner to purchase a mobile phone because he has a terrible credit history and cannot purchase it himself. He states he requires it for work and she takes on the debt as her own. A few months later the relationship breaks down due to domestic violence and the woman is left with the debt, the physical intimidation of her ex-partner, and a debt collector at her door intimidating and bullying her in order to extract money from her.
Presently, the Commercial Agents and Private Inquiry Agents Act 2004 requires commercial agents, or debt collectors as they are commonly known, to hold an operator licence. It provides consumers and other members of the community with reassurance that the person identifying themselves as a debt collector is a fit and proper person who will undertake their duties in a fair and proper manner. Currently licensees are required to undergo training and be fingerprinted. When 20 per cent of this work is undertaken face to face these are important requirements to ensure public safety. A debt collector will often arrive on a person's doorstep unannounced to recover a debt. Debts have the potential to create significant financial hardship for all parties involved in a dispute. The process of debt recovery must be fair, effective and efficient. It is vital that the process balances the rights of creditors and debtors and ensures that those most vulnerable in the community are treated with respect.
It is with this aim in mind that the terms of reference for the Legislative Assembly Legal Affairs Committee provided a succinct explanation of what the industry and sector needed to ensure that the debt recovery process became more efficient. The committee received over 30 separate submissions from government departments, non-government organisations, legal centres and collection agents. The committee made 22 recommendations designed to overhaul the sector. Recommendation one stated that the New South Wales Government should introduce negative licensing for commercial agents who have no face-to-face contact with debtors while positive licensing be retained for field agents. This does not seem unreasonable.
For many people in my community, and in communities across New South Wales, a level of reassurance and confidence can go a long way, particularly when an unknown person arrives on the doorstep saying that they are a debt collector. The committee recognised that. Many submissions recognised that. The Opposition recognises that. It is a pity that the Government does not also recognise it. So many scams are taking place in the community at the moment. There are burgeoning internet scams where people are told they have debt, whether for parking infringements, for speeding or for tax matters. These scams are limited to the internet because people can hide behind it. They do not have to go to someone's house and prove that they are an authorised representative of the organisation seeking to recover the debt. Imagine the number of people who are taken in by these kinds of scams and how that number will increase when anyone can arrive on the doorstep and demand money.
How will that work in a situation where a family member has not told the rest of the family that they are in debt? The debt collector may try to collect money from someone who has no knowledge of the debt. Positive licensing must be retained for those agents who work face to face with people, consulting with individuals in their own front yards. Those agents need a physical licence. We expect police officers, tradespeople and property agents to have a licence to identify themselves. Why is it different for debt collectors? Legal Aid has publicly voiced concerns about some debt collectors. It says it has "ongoing concerns about the tactics employed and behaviour directed towards vulnerable consumers by debt collectors". This industry does not work at the normal end of commerce. It works at the gritty end. This is where people are the most vulnerable and have the most to lose. This is where people are subjected to violence and intimidation.
I am concerned about what the impact of this legislation will be on vulnerable people in our community. As shadow Minister for Small Business I recognise that there is a move in the business community to reduce red tape. This Government, despite its claims to the contrary, is not very good at that. Again we see here the removal of red tape to help business bypass a licensing regime, but it puts at risk the protection of those in our community who owe money. If a debt collection agency, like any small business, is operating efficiently, effectively, ethically and with compassion then it should have no problem complying with the rules. We need to ensure that we retain regulation that protects the most vulnerable people in our community.
I call to the attention of Government members the significant concerns this legislation will raise for people across New South Wales who get into financial trouble. We see that happen often through predatory lending practices. We see it happen to young people who do not understand contracts. There are programs in our schools to alert young people to how easy it is to get into debt. I urge Government members to think about what they are doing to those people. We hear of people being sent to jail for unpaid fines. People who owe money can get into terrible situations. Once a person gets into debt it escalates. The fees increase. The charges levied by these agencies contribute to greater debt. We need to ensure that we provide protection. Allowing someone to go unsolicited, unannounced, at any time of the day, to someone's door to demand money from them is not the kind of deregulation that we want to see in any small business. I urge the Government to consider the Opposition's amendments and to support our position.