Question

What are the legal issues raised by the facts of the case below, and what Australian Consumer Law (ACL) sections are relevant in this case.

Case

Samantha is in her late 60s. She moved here in 2016 from overseas. She works casually at the local primary school and receives the old age pension. Her English is okay but sometimes she struggles to understand what is being said or what is written. Since moving to Australia she has been renting several appliances from 'Marshall Rentals'(MR).

On 2 September 2018, she received a letter from MR informing her that there had been a billing error and her account was in arrears by $2,600. A small part of the error was that she had not been charged GST for one particular rental. Enclosed in the letter was a bill for the full $2,600 plus $150 (the rental fees due that month). The total amount of $2,750 was listed as being due by 30 September 2018.

On 7 September 2018, Samantha called MR to find out some more information about her very large bill. She spoke to a MR member called John and requested help with a payment plan to give her more time to pay it MR. She had recently retired and wasn't in a position to pay MR the full amount from her pension that month and it was school holidays so she had no casual work. John told her that he would follow up on that request and that someone would be in touch with her shortly.

On 13 September 2018, Samantha was involved in an accident at the supermarket where she slipped and hit her head breaking bones and fracturing her head. They were very serious injuries and she subsequently spent two and a half weeks in hospital before being sent home on 30 September 2018. While Samantha was in hospital, she missed three calls and a letter from MR attempting to arrange a payment plan for her debt. When she failed to respond to the letter or to pay the full amount on 30 September, MR sold her debt to a debt collection agency - Debt Results First(DRF).

Samantha's son, Ian, was at her house on 5 October 2018 when the phone rang. He answered it and the person on the line introduced themselves as Charmaine from DRF. Charmaine asked to speak to Samantha and Ian said, 'Sorry, Mum's sleeping right now. She just got home from hospital and is recovering from a bad accident.'

Charmaine asked Ian when a good time might be to call back, and Ian said, 'Not for a while. She's really unwell and needs some time to recover.

Charmaine wrote the details of this call on to Samantha's new file and wrote, 'Call back on 5 November 2018' at the top.

Meanwhile, Ian found the letters from MR and googled DRF to discover they were a debt collection agency.

The following week, on 12 October 2018, Darren picked up Samantha's file at DRF and decided to follow up on the debt. When he called, Samantha answered, and he asked her to identify herself. Shakily she did. Darren then proceeded to tell Samantha that she owed DRF $2,986 and that she needed to pay the amount in full within 7 days.

Samantha was confused and intimidated by Darren's words and started to cry. 'I don't understand,' she said. 'Who is DRF? I don't owe you any money.'

Darren explained that the debt had been transferred from Marshall Rentals and Samantha started to understand what was going on. 'But I don't have $3000,' she said. 'I'm on the pension and I've just come out of hospital. John, from Marshall Rentals, said that we could arrange a payment plan.'

Darren responded, 'It's too late for that now. If we don't get something from you this week, we might need to commence legal proceedings against you.'

Samantha began to cry again, and at that moment Ian arrived at the house to check on her. Ian took the phone from Samantha and said, 'Who are you and what is all this about?'

Darren introduced himself as being from DRF, but claimed that he couldn't say anything further due to confidentiality. Having guessed what was going on, Ian said, 'As I told you guys last week, my mother just got out of hospital. She's on the pension and can't afford to pay you right now. You need to back off and let her recover.'

Darren asked to speak to Samantha again, but Ian refused and hung up.

On Samantha's file, Darren wrote 'Son claims she is sick. Call back on 19 October 2018.'

On 15 October 2018, Samantha received a letter from DRF with the headingFINAL NOTICE.In the letter, DRF stated that she had 7 days to pay them $2,986 or they may commence legal action.

On 19 October 2018, another person from DRF called Samantha's phone. When Ian answered the phone, they asked to speak to Samantha urgently. Again, he told them that she was unwell and did not have the means to pay her debt immediately. Further notes were made on her file.

On 22 October 2018, Samantha receive another letter from DRF with the heading48 HOUR NOTICE.In the letter, DRF stated that she had 48 hours to pay them $2,986 or they may commence legal action.

DRF's internal policy was that debtors who were experiencing hardship should be given time to pay off their debts via a payment plan, where reasonable terms could be agreed. The policy also stated that legal action will not be commenced against debtors experiencing financial hardship unless all other reasonable options have been pursued. Samantha was never offered a payment plan, but nor was her file transferred to the legal department (and there was no evidence to indicate that there were plans to do so.)

DRF's letters and phone calls continued for several months, with DRF making a total of 18 phone calls and sending a total of 12 letters of demand. The stress of the calls and letters had a detrimental effect on Samantha's health, and she was readmitted to hospital in early January 2019 with severe chest pains. Fed up and worried about his mum, Ian decided to approach the ACCC to take action against DRF under the Australian Consumer Law.