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Cathy Wilcox

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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.