Debt collector used by DHS-Centrelink to chase unproven robodebts being sued by Australia’s consumer watchdog for a raft of coercive and unconscionable practices

IT News, 24 September 2019: 

A debt collector recently awarded a $3.3 million contract by the Department of Human Services (DHS) to chase money for Centrelink is wholly owned by a company being sued by Australia’s consumer watchdog for a raft of coercive and unconscionable practices. 

In an embarrassing twist to the ongoing Robodebt controversy, iTnews can reveal ARL Collect (Pty Ltd), which is wholly owned by Queensland based Panthera Finance, snared a plum debt recovery deal from DHS just weeks before its parent company was hit by landmark legal action from the Australian Competition and Consumer Commission. 

The ACCC’s case against Panthera accuses the firm of coercing payments from people – including identity fraud victims – for bills they did not actually owe. 

The direct ownership link between the two companies, which technically are separate legal and financial entities, raises fresh questions around the adequacy of vetting and due diligence surrounding government outsourcing deals, especially those dealing with vulnerable people. 

The ACCC’s action against Panthera, lodged in the Federal Court on 24th July this year, sets out an appalling litany of allegations related to undue harassment and coercion, unconscionable conduct and false and misleading representation to consumers. 

They include forcing money from identity fraud victims by using credit default listings as leverage and follow consumer complaints made about Panthera. 

According to Department of Finance records, DHS published notification of the $3.3 million ARL Collect contract on 29th July; however the contract period is listed as running from 1st July 2019 to 30th June 2020, indicating the tender was let prior to commencement of action by the ACCC. 

The ACCC’s allegations against Panthera, ARL Collects’s owner, all stem from commercial recovery actions, namely attempts to collect on contested bills issued by utilities AGL, Origin Energy and Telstra, raising serious questions of governance and corporate culture. 

A particularly embarrassing coincidence for the government and DHS is that all the examples put forward to the court by the ACCC in its allegations arise from payment demands made by Panthera for bills that were not actually owed and actively disputed by those hit by recovery actions. 

The revelations that the ultimate owner of DHS’s contracted debt collector is a current target of regulatory action is another headache for the government as it vigorously defends its data matching-reliant enforcement regime. 

A class action now in the works against Robodebt being mounted by Gordon Legal also broadly makes its case along the lines of an unreasonable burden of proof being foisted on people labelled debtors, while organisations claiming to be creditors get away with questionable claims. 

The Department of Human Services, its minister Stuart Robert and Prime Minister Scott Morrison have steadfastly maintained welfare overpayment recovery mechanisms are subject to due administrative process, a stance that has done little to quell criticism of Robodebt, which has now become a political weapon. 

Irrespective of the politics, the ACCC’s case against Panthera is highly significant because it spotlights the poor conduct of some collection agencies. 

It also reveals how receivables ledgers of questionable data accuracy are on-sold and the way legitimately disputed debt is treated. 

And it goes deep into the hardball culture and often high pressure tactics of the darker corners of the collections industry, a sector that has been struggling to reform its image......

In one of the examples, a Queensland woman anonymised as “Witness A” disputed a $378 debt for an Origin electricity bill racked up under her name for an address in New South Wales where the woman had never lived. 

She had also never been a customer of Origin. After filing a complaint with the Australian Cybercrime Online Reporting Network (ACORN) and supplying Panthera with the case reference number the debt collector still pursued her. 

“Witness A again informed them that she had never lived in NSW, she had provided an ACORN reference number and stated that she had never received Centrelink payments in her life, referring to the Centrelink deductions recorded on the Origin bills provided to her,” the ACCC court documents state. 

“Witness A provided Panthera with the details of the person the police had informed her was responsible for the Origin Debt, including that the person still resided at the NSW premises to which the electricity was supplied, and also with the relevant police officer’s contact information,” the ACCC’s court documents continue. 

Despite this, Panthera continued asking her for information she just did not have, the ACCC alleges.....

In another case a man dubbed "Witness B" told Panthera that he believed a Telstra mobile broadband account created in his name had been fraudulently obtained. 

Despite a police officer telling Panthera that she was “looking into fraud” in relation to the account “the man still had a credit default listed against his name.” What came next borders on extortion. 

“On 4 April 2017, a Panthera representative called Witness B’s financial advisor and stated that Panthera was aware of Witness B’s dispute and was investigating it, offered to negotiate a payment in order to secure the removal of the default listing and represented that Witness B would need to make a payment of $100 to Panthera in order for the default listing to be removed,” the ACCC’s court documents state. 

“This was in circumstances where the Panthera representative knew that Witness B’s account was in the process of being ‘written off’ by Panthera, but also knew that Witness B needed the default listing removed quickly because he was trying to obtain finance.” 

Even after paying the $100 and Panthera telling the man the default listing had been removed “as at September 2018 Witness B’s credit file still contained a default listing with respect to the Telstra Debt”.......

Read the full article here.

At last, a class action to be mounted against Morrison Government's error-prone 'robodebt'

If any of the following applies to you and you are considering joining this class action challenge on behalf of Centrelink clients who were served with a debt notice, the following are first contact details for the law firm which may act for you if you are eligible:

Gordon Legal
Ph: 1300 55 50 16

Informaton at https://gordonlegal.com.au/robodebt-class-action/ Online contact form at https://gordonlegal.com.au/contact

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Guardian, 17 September 2019:

Gordon Legal has put out its official statement on the class action: 

"The law firm will challenge, on behalf of affected persons, the government’s use of a flawed calculation system by Centrelink to unlawfully take back tens of millions of dollars from many thousands of Centrelink recipients, including pensioners. 

The money for pensioners, carers, widows, students, farmers and unemployed people was taken from them due to a one-size-fits-all online compliance system. 

The robodebt scheme has been in place since mid-2016, its legality was first raised with us by the new shadow minister for government services, Bill Shorten. 

The basis for the challenge is that that the federal government financially benefited when it wrongfully took and banked money that legitimately belonged to recipients. 

Gordon Legal Senior Partner Peter Gordon says ‘investigations reveal between two to three hundred million dollars have been wrongly taken from people, and making it even worse was many were hit with penalties of 10% on those amounts.’ 

‘These people are the least able groups to afford the heavy-handed actions which are based on a system that used ATO averages that didn’t take into account individual circumstances.’ 

‘The unfair and incorrect assumptions had a devastating financial impact on people’s lives. The emotional distress for people who have done nothing wrong has been high.’ 

‘The robodebt system put debt collectors onto innocent people to chase unlawful debts.’ 

‘They have been unfairly financially disadvantaged and must be repaid with interest, penalties dropped and damages paid.’ 

‘The amounts owed will vary from case to case but the average repayments could be a few thousand dollars which is vital from a financial and wellbeing perspective for these people who are least able to afford it.’

Peter Gordon says ‘The people in this class action were not gaming the system. They had honest claims to payments and allowances that Robodebt wrongly assessed, penalised and pursued with harsh consequences.’ 

‘If you have been unfairly affected by Robodebt, you should register your details on the Gordon Legal website and we will be in touch.’ 

Gordon Legal considers a class action is likely to be the best way to deliver redress for people unfairly impacted by Robodebt." [my yellow highlighting]

Peter Gordon: 

"The class action element of the claim is reasonably straightforward. What is innovative about this is to bring a claim against the government for damages for unjust enrichment that will require the high court to recognise legal principles, which I hardly recognised in other common law countries, particularly the United Kingdom. It may break new ground. We think there … is a strong legal basis for it. 

In order for a class action to proceed, either in a state court or the federal jurisdiction, you need to demonstrate that there appear to be several more people who have claims with similar or the same common issues in the fact of law, and there are clearly a large number of people who have similar issues of fact and of law. 

So the question of its status as a class action is not particularly controversial. Under class-action law, not every case needs to be exactly the same. They only have to be roughly similar. Not every case needs to be bound to succeed. You simply need to demonstrate that there are cases that have similar issues that the court can resolve for the benefit of everybody. 

Everyone who believes they are aggrieved is entitled to bring their own actions, whether they are in the ART or as appropriately advised. We are working with the legal aid agencies, but it doesn’t take, I think, a lot of consideration of what has happened to understand that if a template approach has been applied across 800,000 people, and there are admittedly, on the part of the government, 150,000 errors that have been made, that’s a very large number of mistakes which have been made. If they’ve been made, there is a limit to the ability of any court system and indeed bureaucracy to take them off one by one. 

We think it’s appropriate that if there are common issues that have been got wrong by the Commonwealth, that they be addressed in a way that gives everyone release, not just those who are able to access lawyers and legal aid or have the wherewithal all the records to be able to do it themselves."

Bill Shorten: 

" Let’s be clear, we’ve asked the government to fix this, but they’ve got it wrong. If the government through parliament won’t fix the problem, I think giving justice to victims through class action is a legitimate political approach to take. 

Question: Should the program then in your view be suspended while this class action is even being looked at? 

That would be smart for them to suspend it. The question you have to ask is why is the government looking at a blanket scheme looking at annual wages data against people getting fortnightly payments? 

They are hoping they can shake down people into paying up. This is a government building their government position based on this faulty, immoral and quite possibly illegal scheme, but they should suspend it and rule out extending it to anyone else, and in fact they should revisit their own files and perhaps sit down and work out why this is wrong and stop it. 

The government keeps reaching for blaming Labor pre-2013. Robodebt, this online compliance system, was introduced by the current government. 

The current government announced compliance campaigns in 2015, 2016, and they started introducing robodebt, their use of an algorithm to data match. 

It was born under this government and the pathology of robodebt is sick, it has caused countless harm. I give a shoutout to the media, you’ve all covered the problems of robodebt, but at what point in Australia do you say once you’ve seen individual case after individual case it is called a pattern, and the pattern shows robodebt is immoral itself. 

What we and Gordon Legal is going to do is testing the legal foundations of robodebt, because my own research in the last couple of months has led me to believe it is almost certainly illegal and I just have to do research through the stories you’ve covered to say there is a sickness at the heart of robodebt which needs to be cured."

Tweet of the Week

In #SenateEstimates right now they're discussing Robodebt & a spate of suicides, this public servant is saying that because suicide victims are no longer here, by definition, then any causality cannot be proven between the Robodebt and the suicide.

I shit you not.#auspol pic.twitter.com/M2Fqb9JS55

— Bee (@BelindaJones68) February 21, 2019

Sad statistics are generated by Australian Prime Minister Scott Morrison's war on the poor & vulnerable

Liberal MP for Cook Scott John Morrison has been a Cabinet Minister since 18.9.2013, was Minister for Social Services from 23.12.2014 to 21.9.2015, then Treasurer from 21.9.2015 to 26.8.2018 and now Prime Minister of Australia since 24.8.2018 – these are the sad statistics he leaves in his wake.

The Australian, 21 February 2019:

As Department of Human Services secretary Renee Leon faced heated questioning about the controversial “robodebt” program — which averages reported income and generates debts to current and former welfare recipients — she said it is not known whether people have taken their own lives due to the program.

“There is not an elevated death rate among the cohort who have received a debt notice. It’s not to say we are not troubled that people die,” Ms Leon said…

Greens Senator Rachel Siewert said the numbers are particularly troubling because 663 people out of the 2030 had “vulnerability indicators” attached.

Of the 2,030 people who died after receiving a Centrelink Online Compliance Intervention letter (‘robodebt’ ) which was generated sometime between July 2016 to October 2018:

102 were aged 16-25 years;

327 were aged 26-35 years;

347 were aged 36-45 years;

466 were aged 46-55 years;

536 were aged 56-65 years;

251 were aged 66-80 years; and

1 was aged 81-100 years.

By gender 637 of these welfare recipients were Female and 1,393 Male.

“If death rates remained similar throughout the period July 2016 - October 2018 ... approximately 6% of all deaths of 16-35 year olds in Australia occurred for people who were subject to Centrelink #robodebt compliance.” [Dr Ben Eltham on Twitter, 22 February 2019]

BACKGROUND

Gilbert Sullivan QC weiting in the Herald Sun, 21 February 2019:

The Model Litigant Policy of the Commonwealth is a direction issued by the Attorney-General under the Judiciary Act.

The claims reported to have been made by Centrelink are said to target 1.5 million people and aim to claw back $4.6 billion in what are alleged to be overpayments of welfare.

The claims date back to 2010 and Centrelink demands the repayment of what it alleges to be overpayments caused by the understatement of income; but it knows very well that it is unable to prove these claims.

Centrelink has destroyed its records and is entirely dependent on information obtained from the Australian Taxation Office. It divides the gross annual income obtained in this way by 26 to calculate what it terms an “apportioned actual income”.

It then proceeds to claim the difference between the fortnightly income declared by the payee and the apportioned actual income as an understatement by the recipient which it then claims as a debt.

It is only by sighting pay-slips or bank statements that the accuracy of the declared fortnightly income can be verified. Centrelink’s claims rest on it proving that the fortnightly income was falsely declared.

It can only succeed if it can prove this on the balance of probabilities. The ATO information on its own is worthless and needs a point of comparison in the form of contemporaneous records. Annual income does not translate into fortnightly income.

The absurdity of this methodology is obvious.

A full-time student in 2010 on a youth allowance may well have had a part-time job to support their studies. Some weeks they may have earned, say $150, other weeks nothing.

They may have entered the work force full-time in the last two months of the financial year and earned say, $8000.

Dividing the yearly income by 26 cannot establish a dishonest understatement for the weeks the student earned $150 or nothing. Without the contemporary records, no understatement can be proved.

This methodology is in breach of model litigant obligations in a number of respects.

First, the mathematical basis underpinning it is invalid and known to be so by Centrelink; and the maintenance of a claim known to be invalid is a fundamental breach of the obligation to act as a model litigant.

Second, to imagine that casual employees retain pay slips from 2010 is ludicrous; many of the employers from that time no longer exist and it is inconceivable that anyone can produce pay-slips.

Further, while some bank records are obtainable, they are archived and expensive to obtain. Placing the onus on a recipient to procure bank statements is yet a further breach of model litigant obligations.

There is no reason why Centrelink could not obtain these records by subpoena or otherwise. Furthermore, the actions of Centrelink reverse the onus of proof which, of itself, is a breach of model litigant obligations.

MammaMia, 21 February 2019:

“It was demeaning, embarrassing, and if it wasn’t for my son… I considered suicide.”

“It was dehumanising. I had only lost my husband months before… I was grieving.”

These two sentences represent how two women, from two different walks of life, in separate states felt – when they received a Centrelink debt notice.

Or more exactly what happened when they tried to deal with the fallout of a Centrelink debt notice……

The Centrelink letters are sent out through an automated system. In the old system, it equated to about 20,000 a year, but thanks to a new system in 2016 – it’s generating 20,000 letters a week.

Gabriella* received one of those letters just last year.

She received it when she was trying to come to terms with the death of her husband who had died in a boating accident a few months before.

She was left with two young children trying to work out how to move on with life.

She had never received anything from Centrelink, she hadn’t needed to. But Centrelink had sent her $13,000 in weekly increments, and they wanted their money back.

“The stress… I was already dealing with enough… I knew I didn’t owe them money,” she told Mamamia.

Turns out Centrelink had been sending her money that she hadn’t applied for – which had been bouncing back for months.

“I made a phone call first, they realised they’d made a mistake. But she [the person on the phone] couldn’t fix it.”

She was given a different number.

“I spent hours on the telephone waiting for them to answer [to help]. It’s impossible to get through,” explained Gabriella.

So instead, she was forced to take a day off work and go into the Centrelink office itself.

“She looked at me like I was lying,” Gabriella told Mamamia, of the moment she explained her story – yet again.

Gabriella is most frustrated at the time and effort she had to put in to fix this wrong. A wrong that was made by an automated letter, and which cost her a days’ wage, and almost cost her $13,000.

“I am grieving, but I am pretty stable… my head is pretty OK. But there are people who get these letters and they are not OK,” said a teary Gabriella.

“I am actually in the mental health industry, so I am probably more equipped than a lot at noticing triggers in myself. But what if I wasn’t?

“My situation never should have happened, if there had been a human being looking at my account they would have realised it was bouncing back.”

“It was dismay. It was a shock to the system. It is scaremongering, they don’t explain anything, and it’s very… dehumanising,” she said of her experience..........

Morrison & Co off to the Australian High Court to defend the indefensible - Centrelink's robo-debt

The Guardian, 6 February 2019:

Centrelink has now wiped, reduced or written off 70,000 “robo-debts”, new figures show, as the government’s automated welfare compliance system scheme faces a landmark court challenge.

Victoria Legal Aid on Wednesday announced a challenge to the way Centrelink evaluates whether a person owes a welfare debt under the $3.7bn system. It will argue the “crude calculations” created using tax office information are insufficient to assess a person’s earnings and, therefore, are unlawful….

Victoria Legal Aid’s court challenge was also welcomed by the Australian Council of Social Service chief executive Cassandra Goldie, who said the scheme was a “devastating abuse of government power…..

Alternative Law Journal. Emeritus Professor of Law (Syd Uni) Terry Carney, Robo-debt illegality: The seven veils of failed guarantees of the rule of law?, 17 December 2018:

The government's on-line-compliance (robo-debt) initiative unlawfully and unethically seeks to place an onus on supposed debtors to ‘disprove’ a data-match debt or face the prospects of the amount being placed in the hands of debt collectors. It is unlawful because Centrelink, not the supposed debtor, bears the legal onus of ‘proving’ the existence and size of any debt not accepted by the supposed debtor. And it is unethical because the alleged debts are either very greatly inflated or even non-existent (as found by the Ombudsman), and because the might of government is used to frighten people into paying up – a practice rightly characterised as a form of extortion. How could government, accountability avenues, and civil society have enabled such a state of illegality to go publicly unidentified for almost 18 months and still be unremedied at the date of writing?

This article suggests the answer to that question lies in serious structural deficiencies and oversights in the design and operation of accountability and remedial avenues at seven different levels:

1. In a lack of standards to prevent rushed government design and introduction of machine learning (‘smart’) systems of decision-making;

2. In a lack of diligence by accountability agencies such as the Ombudsman or Audit Office;

3. In a lack of ethical standards of administration or compliance by Centrelink with model litigant protocols;

4. In a lack of transparency of the first of two possible tiers of Administrative Appeals Tribunal review (AAT1), resulting in a lack of protections against gaming of review by way of agency non-acquiescence or strategic non-contestation;

5. In a lack of guarantees of independence and funding security to enable first line Legal Aid or community legal centre/welfare rights bodies (CLC/WRC) to test or call out illegality in the face of thwarting of challenges by Centrelink settling of potential test cases;

6. In a lack of sufficient pro-bono professional or civil society capacity to mount ‘second line’ test case litigation or other systemic advocacy; and

7. In tolerance, especially in some media quarters, of a ‘culture’ of political and public devaluing of the significance of breaches of the rule of law and rights of vulnerable welfare clients.

It is argued that a multifaceted set of initiatives are required if such breaches of legal and ethical standards are to be avoided in the future.

Why is it clear that robo-debt is unlawful?

The pivot for this article is not so much that Centrelink lacks legal authority for raising virtually all debts based on a robo-debt ‘reverse onus’ methodology rather than use its own information gathering powers – for this remains essentially uncontested. Rather it is extraordinary that this went unpublicised and uncorrected for over two years. So first a few words about the illegality as it affects working age payments such as Newstart (NSA) and Youth allowance (YA).

Robo-debt is unlawful because Centrelink is always responsible for ‘establishing’ the existence and size of supposed social security debts. This is because the legislation provides that a debt arises only if another section creates a debt, such as one based on the difference between the amount paid and the amount to which a person is entitled. And because Centrelink bears a ‘practical onus’ to establish this. If Centrelink cannot prove up a debt from its own enquiries or information supplied to it, the status quo (no debt/lawful receipt of payments) applies. This has been the law since 1984 when the full Federal Court decided McDonald. Unless the alleged debtor is one of the rare employees who had only a single job paid at a constant fortnightly pay rate, Centrelink fails to discharge this onus when its robo-debt software generates a debt by apportioning total earnings reported to the Australian Taxation Office (ATO) from particular jobs to calculate average earnings. Robo-debt treats fluctuating earnings as if that income was earned evenly at the same rate in each and every fortnight. Mathematically this is wrong because an average for a fluctuating variable never speaks to its constituent parts. And it is the actual income for constituent fortnights that as a matter of law is crucial for calculating the rate of a working age payment such as NSA or YA.

Read the full article here.

How the Turnbull & Morrison Coalition Governments suspended legal principle and stooped to extortion in order to pursue vulnerable welfare recipients

In July 2016 the Department of Human Services (DHS) - Centrelink launched a new online compliance intervention (OCI) system for raising and recovering debts.

Its aim was to raise up to $1 billion dollars allegedly owed by welfare recipients.

This compliance intervention became known colloquially as robo-debt.

Current Australian Prime Minister and Liberal MP for Cook Scott Morrison was federal treasurer for the first two years of the ongoing robo-debt scheme.

During this time the suicide of welfare recipients being pursued for so-called debt recovery began to be reported.

Since 2016 only a small number of welfare recipients have brought their robo-debts before the Administrative Appeals Tribunal for adjudication. It has reportedly set aside 34 per cent of these robo-debts (or one in every three) and varied another 2,4 per cent.

Most welfare recipients don't have the resources to fight these alleged debts.

The Guardian, 18 December 2018:

Centrelink’s “robo-debt” system is a form of illegal extortion allowed by failings across a “plethora” of democratic and legal institutions, according to a former member of the administrative appeals tribunal.

Prof Terry Carney, a long-serving member of the AAT, has penned an extraordinary attack on the institutional failings that allowed the robo-debt program.

It’s the second time Carney, who helped oversee the writing of Australia’s social security laws, has used academic journals to condemn the system as illegal this year.

Carney’s last paper said robo-debt involved the enforcement of “illegal” debts that in some cases were inflated or nonexistent, an allegation that was forcefully rejected by the Department of Human Services. Hank Jongen, the department’s spokesman, said at the time that the department “strongly refutes any claims that it has conducted its compliance activities in a manner which is inconsistent with the legislation”.

This time, Carney used a piece in the Alternative Law Journal to map out the numerous shortcomings that allowed the system to come into being and operate for 18 months without challenge.

 “The pivot for this article is not so much that Centrelink lacks legal authority for raising virtually all debts based on a robo-debt ‘reverse onus’ methodology rather than use its own information gathering powers – for this remains essentially uncontested,” he wrote. “Rather it is extraordinary that this went unpublicised and uncorrected for over two years.”

Centrelink has long used a system of automated data-matching to detect discrepancies in income reported by welfare recipients, to detect and claw back overpayments. But it introduced significant changes from July 2016, reducing human oversight and expanding the system considerably in a bid to recover more debts and improve the budget. The new system effectively shifted the onus onto the welfare recipient to prove they owed no debt to the government.

The system spat out letters to individual welfare recipients as soon a discrepancy was detected in their reported income to Centrelink and records held by other agencies, like the tax office.

A flawed process was used to calculate their debt if they did not respond or could not produce evidence of their previous pay, which involved averaging out their yearly income across all 26 of Centrelink’s fortnightly reporting periods. The process often led to the false assumption that a welfare recipient had worked across an entire year and was ineligible for social security, thereby creating a debt.

Carney argues the rushed design of what he described as a “machine-learning budget ‘savings measure’” trumped good design standards. He says inquiries by the auditor general and the commonwealth ombudsman into the system had failed to consider whether it was raising debts on a lawful basis.

Carney also argues that Centrelink, by pursuing debts raised through the controversial “income averaging” technique, has failed to adhere to ethical administration. He says Centrelink has continued to use this method, despite knowing AAT rulings that it is invalid…….

The privacy safeguards in the first tier of the AAT mean that most legal challenges against welfare debts are not publicised, he writes. That means that “rulings overturning Centrelink reasoning remain hidden from the public”…..

TERRY CARNEY AO, Emeritus Professor, University of Sydney, Centre for Health Governance, Law and Ethics, 2018:

* Alternative Law Journal, Robo-debt illegality: The seven veils of failed guarantees of the rule of law?

* Australian Public Law, Robo-Debt Illegality: A Failure of Rule of Law Protections?

* UNSW Law Journal Forum, The New Digital Future For Welfare: Debts Without Legal Proofs Or Moral Authority?

* University of New South Wales Law Journal, Vulnerability: False Hope For Vulnerable Social Security Clients?

Centrelink's 'robodebt' headed to the Australian Federal Court?

9 News, 10 December 2018:

Centrelink’s robo-debt recovery scheme was intended to seek out and destroy debts, but instead it’s thrown more than 200,000 Australians into financial turmoil.

Now, Victoria’s former head prosecutor, QC Gavin Silbert, is lending his voice and fighting back against the controversial system which aims to claw back up to $4.5 billion in welfare overpayments.

“I think it’s illegal and I think it’s scandalous. In any other situation, you’d call it theft. I think they’re bullying very vulnerable people,” Mr Silbert told A Current Affair. 

“If debts are owed to the public purse they should be paid, they should be pursued. These are not such debts,” he said.

He’s teamed up with Melbourne-based solicitor Jeremy King to take a pro bono case to the Federal Court which, if successful, could derail the robo-debt scheme and see thousands of debts wiped.

“I hope this would set a precedent to show that the way this robo-debt scheme had been rolled out is not in accordance with the law and all of the other debts that have been sent out to people are not in accordance with the law,” Mr King said....

The Sydney Morning Herald, 2 December 2018:

Gavin Silbert, QC, who retired as the state's chief crown prosecutor in March, has accused the Department of Human Services of ignoring its legal obligations and acting like a bully towards some of the nation's most vulnerable people.

A potential legal challenge could have significant implications for future enforcement of the robo-debt program, which aims to claw back up to $4.5 billion in welfare overpayments with more than 1.5 million "compliance interventions".

Mr Silbert became embroiled in the dispute when someone he knew was issued with a demand to repay a debt of $10,230.97, which the department claimed was overpaid by Centrelink between 2010 and 2013.

He has provided pro bono advice and helped prepare correspondence to the department, which repeatedly asked for an explanation on how the debt was calculated.

However, the department's compliance branch has ignored nine letters between May and November 2018 that requested additional information. Last week, it made threats to impose interest charges on the original debt.

"Other than the bald assertion that I have a debt, I have never received any details of how the debt is alleged to have arisen or anything which would enable me to verify or understand the demand made of me," Mr Silbert's client wrote on June 7.

In another letter, Mr Silbert's client wrote: "There is not a court in the country that will uphold your demands for interest in the absence of fundamental details of how the amount is alleged to have arisen."

The dispute escalated further when the department engaged debt collection agency Dun & Bradstreet, which threatened Mr Silbert's client with a "departure prohibition order" that would prevent him travelling overseas.

Mr Silbert is keen to launch Federal Court action to test the legal basis of the robo-debt program and the government's apparent unwillingness to provide particulars.

"I'm itching to get this before a court," he told Fairfax Media.

He said legislation that regulates data-matching technology requires the department to "give particulars of the information and the proposed action" before it can recover overpayments.

The robo-debt program, introduced by the Coalition government, calculates a former welfare recipient's debt by taking a fortnightly average rather than discovering the exact amount that was claimed.

The department was forced to concede it was no longer in possession of the original claims made to Centrelink by Mr Silbert's friend, after he made requests under freedom-of-information laws.

Tweets of the Week

Today DHS told the senate, that so far:

Robodebt has cost $276 million to administer.

And... Robodebt has 'recovered' $279 million.

While they can separate forecast savings for newspaper headlines, apparently it's not possible to do that with actual savings.#notmydebt pic.twitter.com/Q6M6NaY09p

— NotMyDebt (@not_my_debt) May 8, 2018

DHS was asked how many robodebts are awaiting reassessment. They failed to answer. We've heard from people waiting months.

So far 652,898 reassessments have been initiated.

30,953 debts have changed in value or been wiped. That's 30,953 debt notices that were wrong.#notmydebt pic.twitter.com/LJd3WxDJV4

— NotMyDebt (@not_my_debt) May 9, 2018

DHS are including 'prevented debts' in their savings from robodebt.

What happens if a company in the private sector banks a possibly avoided future liability as a cash asset?

See: Blue Sky Alternative Investments - majority of board resigned

Time for robodebt resignations? pic.twitter.com/jsdQVM4NAa

— Sarah Masting (@sarah_masting) May 8, 2018

The only Australians who do not recognise the cruel farce that is 'robo-debt' are right-wing politicians, ideologues and the just plain ignorant

“It is trite maths that statistical averages (whether means or medians) tell nothing about the variability or otherwise of the underlying numbers from which averages are calculated. Only if those underlying numbers do not vary at all is it possible to extrapolate from the average a figure for any one of the component periods to which the average relates. Otherwise the true underlying pattern may be as diverse as the experience of Australia’s highly variable drought/flood pattern in the face of knowledge of ‘average’ yearly rainfall figures. Yet precisely such a mathematical fault lies at the heart of the introduction from July 2016 of the OCI machine-learning method for raising and recovering social security overpayment debts. This extrapolates Australian Taxation Office (‘ATO’) data matching information about the total amount and period over which employment income was earned, and applies that average to each and every separate fortnightly rate calculation period for working-age payments.”  [Terry Carney AO, UNSW Law Journal, Vol 42 No 2, THE NEW DIGITAL FUTURE FOR WELFARE: DEBTS WITHOUT LEGAL PROOFS OR MORAL AUTHORITY?, p2]

The Canberra Times, 5 April 2018:

The Coalition government's "robo-debt" program has been unlawfully raising debts with welfare recipients, wreaking "legal and moral injustice", a former administrative appeals tribunal member has said.

Emeritus professor of law at the University of Sydney Terry Carney, who was on the Administrative Appeals Tribunal for 40 years and was its longest serving member until finishing in September, has weighed into the debate over the controversial debt collection method saying the Department of Human Services has no legal basis to raise debts when a client fails to ‘disprove’ they owe money.

While Professor Carney urged it be made to comply with the law, the DHS rejected his comments, saying its Online Compliance Intervention program was consistent with legislation.

"Robo-debt" - the subject of a Commonwealth Ombudsman report and a Senate inquiry recommending sweeping reforms to the program - was at the centre of a maelstrom of controversy last year and remains loathed by critics calling for change….

Writing in the UNSW Law Journal last month, he said that despite the DHS' stance it remained responsible for calculating debts based on actual earnings, not assumed averages.

“Centrelink’s OCI radically changed the way overpayment debts are raised  by purporting to absolve Centrelink from its legal obligation to obtain sufficient information to found a debt in the event that its ‘first instance’ contact with the recipient is unable to unearth information about actual fortnightly earnings. As noted by the Ombudsman, the major change was that Centrelink would ‘no longer’ exercise its statutory powers to obtain wage records and that the ‘responsibility’ to obtain such information now lies with applicants seeking to challenge a debt. Writing a little later, the Senate Community Affairs References Committee challenged this, contending that

6.13 It is a basic legal principle that in order to claim a debt, a debt must be proven to be owed. The onus of proving a debt must remain with the department. This would include verifying income data in order to calculate a debt. Where appropriate, verification can be done with the assistance of income support payment recipients, but the final responsibility must lie with the department. This would also preclude the practice of averaging income data to manufacture a fortnightly income for the purposes of retrospectively calculating a debt. …”  [Terry Carney AO, UNSW Law Journal, Vol 42 No 2, THE NEW DIGITAL FUTURE FOR WELFARE: DEBTS WITHOUT LEGAL PROOFS OR MORAL AUTHORITY?, pp3-4]