Credit and Debt

Credit and Debt

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Case study 1: landline debt

Elaine’s landline debt (Telecommunications Industry Ombudsman)

Elaine's instructions

Elaine sought assistance from Homeless Law in relation to a $750 debt she owed to a telecommunications company for a home phone bill. The debt was incurred about two years ago when Elaine was living in a private rental property.

The debt had been sold to a debt collection company and was approximately three years old.

Elaine's circumstances

When Elaine contacted Homeless Law, she was living in emergency accommodation. She had been homeless on and off for several years. She was 25 years old and was unemployed, had a brain injury resulting from a car accident and suffered from schizophrenia.

Due to these circumstances, including Elaine's recurrent homelessness, Elaine had been unable to make repayments on the debt.

Steps taken in Elaine's matter

  • Elaine's Homeless Law lawyer initially contacted the telecommunications company to try to negotiate a waiver or reduction in the debt, but was told by the company that she had to negotiate with the debt collection company because the debt had been sold.
  • The Homeless Law lawyer was not able to negotiate a satisfactory outcome with the debt collection company. The company had offered to accept a reduced amount as a lump sum payment. However, as Elaine was unemployed and had no savings there was no realistic possibility of her being able to make this payment.
  • Elaine's Homeless Law lawyer then referred the matter to the Telecommunications Industry Ombudsman (TIO) who suggested that she negotiate with the telecommunications company again. The TIO provided the lawyer with the contact details for a consultant within the "Consumer and Small Business" section of the telecommunications company.
  • The lawyer sent this letter to the debt collection company asking them to put a hold on enforcement action while negotiations were taking place.
  • While the lawyer was dealing with the TIO and the telecommunications company, the debt collection company threatened to commence proceedings to recover the debt. The lawyer sent a second letter to the debt collection company requesting that it put a hold on any such proceedings while negotiations were occurring directly with the telecommunications company. This letter was copied to the telecommunications company and referred to both the Telecommunications Consumer Protection Code and ASIC Regulatory Guide 96, Debt Collection Guideline: For Collectors and Creditors.
  • The lawyer sent Elaine's caseworker and mental health worker these letters requesting letters of support in relation to Elaine's debt.
  • The lawyer sent the consultant at the telecommunications company letters of support from Elaine's caseworker and mental health worker, with this letter asking for the debt to be waived on the basis of Elaine's hardship.

Outcome

After several discussions between Elaine's lawyer and the consultant at the telecommunications company, the telecommunications company offered to waive Elaine's debt.

The condition of waiver was that Elaine would not be able to obtain another service with the telecommunications company until she could show that her financial circumstances had improved. Elaine instructed her Homeless Law lawyer to accept this offer.