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Deceptive claims about debt collection costs.


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.


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