Skip to content

Deceptive claims about debt collection costs.

28/11/2011

The Federal Court has declared that a lawyer made misleading and deceptive representations, between April 2002 and October 2010, in connection with the collection of small debts on behalf of video rental stores.

Goddard Elliott Lawyers sent approximately 20,000 debt collection notices per month in the 12 months prior to the Australian Competition and Consumer Commission instituting proceedings.  The notices were sent Australia-wide.

The ACCC took legal action after concerns were raised by the Central Australian Aboriginal Legal Aid Service on behalf of clients who had received debt collection notices containing the misleading representations.

The misrepresentations were misleading or deceptive in several ways.  For example, one of the notices could be mistaken for a court process.  They claimed that video stores were entitled to recover solicitor’s costs even though cost recovery is commonly unavailable for small debts or is limited by State law and cannot be recovered without a Court order for enforcement.  

The solicitor agreed to:

  1. withdraw the misleading representations;
  2. publish corrective notices in national newspapers and industry publications;
  3. institute trade practices compliance training; and
  4. contribute $30,000 towards the ACCC’s court costs.

 

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s