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21-306MR ASIC sues A&M Group for false and misleading, threatening and coercive conduct against debtors
ASIC has commenced civil proceedings in the Federal Court against A&M Group Pty Ltd for misleading, threatening and coercive conduct against debtors who had missed payments under their debt agreements.
A debt agreement (also known as a Part IX debt agreement) is a formal way for a debtor to settle their debts with creditors. A&M Group, which trades as Debt Negotiators, acts as a registered debt agreement administrator. This involves A&M Group collecting payments from the debtor and distributing the payments to creditors.
ASIC alleges that A&M Group sent text messages and emails to six separate debtors, including to:
- threaten them with fraud charges and imprisonment if they failed to make payments;
- threaten to contact friends, family, work colleagues and landlords if debtors failed to contact A&M Group;
- falsely claim that creditors were in the process of terminating the debtors' debt agreements and were considering legal action;
- falsely claim that, if their debt agreement was terminated and they were forced into bankruptcy, the debtors’ finances would be examined to determine if they had been able to make payments under their debt agreement; and/or
- falsely claim that if creditors obtained a garnishee order against the debtor, the creditors would be entitled to take 80% of the debtor’s income.
ASIC also alleges that A&M Group called and sent texts to the friends, family and work colleagues of the six debtors, with the intention of embarrassing or intimidating the debtors in order to get them to contact A&M Group.
Threatening or otherwise unduly harassing or coercing debtors is against the law. ASIC is concerned that this alleged conduct may cause harm to consumers already experiencing financial difficulties and under significant stress.
ASIC is seeking civil penalties and declarations.
The proceeding will be listed for directions on a date to be determined by the Court.
A&M Group is registered by the Australian Financial Security Authority (AFSA) as a debt agreement administrator. ASIC’s investigation arose from an AFSA referral to ASIC.
Editor's note 1:
At a case management hearing on 25 March 2022, orders were made listing the matter for further case management hearing on 5 May 2022.
Editor's note 2:
The proceeding is to be listed for a penalty hearing on a date to be fixed by the Court in consultation with the parties.