Complaints against debt collectors to the Commerce Commission have increased in the past year.

The Commerce Commission is putting the debt collection industry on notice, concerned about the way customers are being treated.

One operator, Intercoll, has been given a warning.

It told a debtor to contact the company she originally owed money about a dispute over the debt. It said she should pay Intercoll in the meantime, then it would refund her if her dispute claim was successful.

This was incorrect information because Intercoll had purchased the debt and the debtor should have been able to dispute the debt directly with it.

Commissioner Anna Rawlings said complaints about debt collection has increased in the past year and debt collectors need to ensure that they had systems in place to ensure compliance with their legal obligations.

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"While debt collectors often need to discuss the nature of a debt and the consequences of non-payment with a debtor, they must not use misleading techniques to pressure debtors into paying or to deter them from pursuing genuine disputes," Rawlings said.

"This includes saying that a debtor cannot dispute a debt, telling them that court action will commence within a certain timeframe when it may not, or giving the impression that certain outcomes are inevitable if they are not," she said.

Over the past year the commission received 125 complaints about 37 different debt collection agencies.

In the previous 2016/17 financial year, it received 98 complaints about 33 different debt collectors.

Rawlings said, while debtors need to pay any overdue debt, it was important that they were not misled.



"If consumers want to dispute their debt, we suggest they contact the debt collector early to find out what the disputes process is before any problems escalate. If there is a genuine dispute over the debt, the debt collection process should stop while this is resolved," she said.

The watchdog told Intercoll to avoid making statements to debtors which may have given the impression that court action was inevitable if the debtor did not make payment, when in fact this consequence was only a possibility at the time the representation was made.

In January a debt collection group, Receivables Management, was ordered to pay back more than $1.4 million to hundreds of customers who were wrongly charged, following an investigation by the Commerce Commission.

Receivables Management had to credit the amount to about 1700 customers who were wrongly charged interest, costs and fees on loans after their goods had been repossessed and sold.