ASIC seeks civil penalties against “debt negotiators” A&M Group for allegedly harassing and lying to debtors

In its latest move against consumer credit providers and debt collectors, ASIC has brought civil penalty proceedings against A&M Group Pty Ltd (trading as “Debt Negotiators”) alleging it engaged in false, misleading, threatening and coercive conduct towards consumers suffering financial distress.

A&M Group is registered with the Australian Financial Security Authority (AFSA) as a “debt agreement administrator”, essentially acting as a middle-man between creditor companies and debtors who owe the companies money.

ASIC alleges that A&M Group made false claims or threats to debtors that:

• creditors were in the process of terminating debt agreements and considering legal action;
• fraud charges and imprisonment may follow if they failed to make payments;
• it would contact friends, family, work colleagues and landlords if debtors failed to respond;
• if they were forced into bankruptcy, the debtor’s finances would be examined to determine if they had been able to make payments under their debt agreement; and
• if creditors obtained a garnishee order against the debtor, the creditors would be entitled to take 80% of the debtor’s income.

It is alleged that A&M Group followed through on some threats, sending text messages to debtors’ friends, family and work colleagues, with the intention to embarrass or intimidate the debtors, and coerce them to get in contact with A&M Group.

ASIC’s action follows civil penalty proceedings recently brought against debt collection company, Ultimate Credit Management Pty Ltd.  

In that case, ASIC alleges the debt collector commenced debt recovery proceedings against consumers outside their home State or territory, in breach of regulation 36 of the National Consumer Credit Protection Regulations 2010 (Cth).  

These cases are ongoing and demonstrate ASIC’s increasing activity in the debt collection sector and consumer credit sector, in particular small consumer lending.

ASIC’s media release regarding A&M Group can be found here: https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-306mr-asic-sues-a-m-group-for-false-and-misleading-threatening-and-coercive-conduct-against-debtors/.