The Federal Court heard that ACM Group, described by the competition watchdog as one of the largest debt collection companies in Australia, had actively pursued the care home resident and another consumer, a single parent with limited income, between 2011 and 2015 for unpaid mobile phone debts it had bought from Telstra.
“ACM’s continued harassment and intimidation of a care facility resident who had difficulty speaking after suffering multiple strokes is one of the worst cases of unconscionable conduct we have seen in the debt collection sector,” ACCC commissioner Sarah Court said in a statement once the penalty was handed down.
“ACM’s conduct towards another consumer who was in difficult financial circumstances, which included giving false information and making empty threats of court action, was also particularly egregious.”
Ms Court said the ACCC has sought strong financial penalties against ACM in order to send a signal that all debts must be recovered within the confines of the law.
“Unconscionable conduct such as harassment, intimidation and coercion of consumers is unacceptable to not only the ACCC and the Court, but the wider community,” Ms Court said.
The $750,000 penalty could have been much higher, however – the ACCC had been seeking the maximum penalty of $1.1 million over its conduct toward the first consumer alone, and half that amount for its conduct relating to the second.
ACM was also ordered to pay the regulator’s legal costs.
Legal action was first launched by the ACCC against ACM in June 2016. The Federal Court ruled in July 2018 that ACM had in fact breached Australian Consumer Law, but the penalty was not handed down until 21 December.
‘Vastly different business now’: ACM
In a statement posted to its website on 2 August 2018 in response to that verdict, ACM said that it is “a vastly different business now, with strong cultural changes that has much improved the way we do business”.
“Well before the judgment was handed down last month, we knew that we needed to do better, and for the last four years, we have been undergoing a dramatic transformation of the business,” it said.
a) Engaging one of the largest consumer welfare agencies, to audit our internal processes
b) Overhauling risk mitigation system controls, staff training and internal culture to ensure we best meet compliance and customer service standards.
“This process resulted in a number of practical changes to the way our staff interact with customers. For instance, they now have greater flexibility to freeze accounts, impose longer payment moratoriums and write the account(s) off in circumstances such as poor health, financial constraints and domestic violence.”
ACM added that it has bolstered its compliance and ethics team by adding 10 new staff, implemented automated system controls to limit the volume of correspondence with consumers.
“These changes are a necessary part of ACM’s evolution into a more customer-centric business, and we’re glad to report that we’ve seen a huge drop in the number of disputes and complaints as a result,” the company said.
“Recent staff surveys have also indicated more than 80 per cent of our employees say their ability to respond to customers appropriately and confidentially is either ‘much better’ or ‘impressively better’ than the year prior.
“This process has been a big learning experience for ACM, and as a result, we’ve made many positive changes that have really transformed the way we do business. This new, revitalised ACM has a customer-first focus that centres on providing Australians with ethical solutions to track and manage control of their financial situations.”