How Far Can Debt Collectors Go … and are Fake Profiles Legal?

A very interesting case has been decided by the ACCC about companies using debt collectors and how far they can go in chasing a debt, in particular, using fake profiles.

This was a particularly interesting case. It involved Excite Mobile creating a fake profile of a debt collection company to chase debts.

They set up a fake profile of a debt collection company. They sent letters to their customers to chase them for debts, using fake letterhead for the debt collection company. When customers called, someone from Excite answered the phone but pretended to be from the debt collection company.

On top of that, Excite Mobile also said people had coverage from home when they did not.

The ACCC went to court, and it was held that they had been misleading, and their conduct had been “outrageous” and “unjustifiable”.

They were fined $455,000, and the directors were personally fined $55,000 and $45,000 and were given bans on managing a company for a certain period.

This case serves as a sober warning that courts are becoming less tolerant of marketing exaggeration, or hyperbole, used to promote a business or to collect monies.

Businesses would be well advised to use the smell test … if something feels funny or does not sit right, then it probably isn’t, and you should get advice from a professional before proceeding further.

(Source)