Can I contact a debtor's relatives or employer about a debt?

Generally, the answer is no, unless that person is a guarantor of the debt. Otherwise, contacting a third party about an individual’s debt (whether they are a relative or not) will involve collection and disclosure of personal information about the debtor that may adversely impact on the debtor’s interests.

The Privacy Act sets out your obligations when collecting and disclosing personal information. It is important to note the relationship of the third party to the debtor is not a factor when considering collecting or disclosing personal information.

Information about a debt, or even just the fact a debt exists, is likely to be personal information. This means that before you disclose information about it, or collect information to pursue it, you need to make sure you comply with your obligations under the privacy principles.

Principle 11 says an agency (such as business employer or creditor) shall not disclose personal information about an individual unless one of the exceptions to that principle applies, such as sale of a business or where the disclosure is authorised by the debtor.

Principles 1-4 are referred to as the ‘collection principles’. They require an agency to only collect information for a lawful purpose, to collect information from the individual concerned, to explain why they are collecting the information, and to be fair in the way they collect information. These principles should be kept in mind before approaching third parties about an outstanding debt.

Once a debt is reported to a credit reporting agency, the Credit Reporting Privacy Code applies and the facts of the default will be accessible to people authorised to make credit enquiries.

Updated December 2020