Being pursued for debt is incredibly unsettling, but it's vitally important that you do not ignore attempts to contact you by debt collectors — even if you believe there has been a mistake — as ignoring this can result in a credit default being placed against your name.
What is a Credit Reporting Body (CRB)?
A CRB is responsible for holding and updating your credit file. There are four CRBs in Australia:
The debt collection process
Credit defaults can stay on your file for up to seven years. However, if the default was listed after 12 March 2014, there are rules that the energy retailer or water corporation must follow before it can list a default against your credit file, including:
- Debts of less than $150 cannot be default listed.
- The payment must be overdue by at least 60 days.
- A notice requesting payment must be sent to your last known address.
- Your company or the debt collector must also send you a notice stating its intention to list a credit default against you. This notice cannot be issued less than 30 days after the notice requesting payment.
- The default information cannot be given to a CRB earlier than 14 days after the intention to list a credit default notice was issued, or later than 3 months after that date.
Information on rules relating to credit defaults listed before 12 March 2014 can be found in the Privacy Act 1988 on the ComLaw website.
How to avoid a credit default listing
If you get a reminder notice from a utility company, noting that a bill is overdue, either make a payment immediately if you are able to, or make contact straight away and request an extension of time to pay the bill, or a payment plan. In most cases your company will provide you with some additional time to pay or a possible payment solution.
What to do if you are default listed in error
If you believe that a credit default listing has been incorrectly placed against your name, contact the relevant company immediately. Whether the debt has been sold to a collection agency, referred to a CRB, or not, an energy retailer or water corporation is still required to discuss the matter with you and has an obligation to assist you. You may ask to speak with a manager or contact EWOV for further guidance. We can assist with credit default listings and can investigate if a default listing was placed correctly.
It is a good idea to contact a CRB to request a copy of your credit file as soon as you become aware of a credit default, as access to this can provide valuable information.
Accessing credit file information
You can get a free copy of your credit file once every 12 months, or if any credit product has been applied for and rejected within the last 90 days, or if you are requesting an error on your credit file be corrected.
Note: This Hot Topic is a summary of an article in Connect | Summer 2015 Edition [PDF, 430 KB] — EWOV's quarterly newsletter for community agencies.