Cash Converters fined over debt collection practices
An ASIC surveillance has concluded that Cash Converters Personal Finance Pty Ltd systematically failed to meet regulatory guidelines on debt collection practices. This was particularly so in the way of too frequently contacting consumers.Cash Converters then routinely breached Regulatory Guide Debt collection guidelines for collectors and creditors.The corporate regulator has found that as a result of poor internal controls and policies which recommends that consumers be contacted regarding a debt not more than three times per week or ten times per month. These guidelines are based on legislative prohibitions on harassment and coercion.Safrock Financial Corporation (Qld) Pty Ltd, a related company to Cash Convertors, was found responsible for providing incorrect information to consumer credit reporting agency Equifax. The credit listings indicated the total amount of the debt owing by consumers, rather than the outstanding balance. This may have resulted in up to 38,500 customers being reported with inaccurate amounts owing over a one-month period.In response to ASIC's concerns, Cash Converters is outsourcing all debt collection work to a specialist third party debt collector. A licence condition imposed on Cash Converters will require the company to obtain ASIC's consent before returning debt collection activity in-house. Cash Converters has also worked with Equifax to ensure all incorrect credit listings have been removed.The company has paid a A$650,000 community benefit payment to help fund the National Debt Helpline. The helpline assists consumers who have trouble managing debt or paying bills.