Credit History

Reporter: Helen Kapolos

This woman was chased by debt collectors for a bill totalling one cent.

This ten year old was at the centre of an ungodly legal battle over a 25 dollar dvd about jesus.

This eight-year-old was offered a department store credit card.

If that doesn't raise an eyebrow or three.. How would you like this man knocking on your door chasing a debt? His name is Toby Mitchell, he's the so-called sergeant at arms of the banditos bikie gang and now, apparently, work-experience debt collector.

Welcome to the brave new world of debt collection.

There are plenty of horror stories about debt collection. But the old tactics of intimidation, bullying and harassment are nothing compared with the prospect of a bikie knocking on your door.. Where the not-so-subtle message is pay up or be bashed up. Don't think it doesn't happen.

Victoria police are investigating why Toby Mitchell and a couple of his heavies attended a meeting between a real estate agent and one of his creditors, who reportedly owed the agent 130 thousand dollars.

"The three Commanchero outlaw bikies recorded on this CCTV vision are walking towards the home of construction company owner Trevor Evans." Said Victorian Police

As fairfax media revealed earlier this year, it's not just bandidos on the debt collection bandwagon.

"As bikies are increasingly used to collect disputed deaths in the building industry police and industry groups believe the state government should introduce a character test and licence for debt collectors." Said Fairfax Media

This sort of behaviour is illegal. Yet it happens time and time again.

Daniel Benn was on the receiving end of this sort of treatment.

"At one stage they were calling two to three times a day to the house phone and calling the mobile non-stop. And calling the neighbors. That was the most embarrassing moment." Said Daniel Benn

"We do see cases where debt collectors harrass and coerce people into paying. Consumers do have rights." Said Gerard

As Michelle Reed and her mum Valerie can attest, debt collectors aren't always the sharpest tools in the shed. For two and a half years, they've been harassed for a phone debt which isn't even theirs.

"I keep writing to them and telling them this person doesn't live here anymore but they're not taking any notice." Said Victims

Despite explaining over and over, the demands kept coming. We managed to track down the real creditor's address in 15 minutes. She's out of the country and, presumably, unaware of the mess she left at her last address.

At what point is it fair to call in the heavies? Soon credit providers are about to be given a whole lot more ammunition.

"A consumer that does pay five days late may find that they've got a mark on their credit report. It's really unclear how that information will be used by credit providers." Said Gerard

Gerard Brody is ceo of the consumer action law centre. He says new privacy laws mean any consumer who pays a bill five days late.. That's right, just five days.. Will get a black mark against their name.

"Credit providers who have a lot more data about consumers payment habits are more likely to use that to target particular products toward particular consumers. Perhaps the higher cost credit card to the person they know won't pay the full balance back on time, because that person will be a profitable customer." Said Gerard

The truth is, no-one knows whether one late mortgage or credit card payment could blow your chances of a future car loan or mortgage. The new laws don't come into place until next march.. But, make no mistake, big brother is watching us right now. The banks are already collecting information on how you pay your bills and there's nothing you can do to stop them.

"Unfortunately these new privacy laws are in force and banks are collecting, have the ability to collect this information already." Said Gerard

Adam Siddique from dun and bradstreet says it's not all doom and gloom. He reckons banks might use all this new info for good, rather than evil.

"What it tells credit providers is essentially whether people are paying their bills and whether people are paying their bills on time. The new system really provides a lot more richer information so that credit providers can see how you're repaying your bills. And that then allows them to make some decisions based on how they want to lend and how much they want to lend." Said Adam

"What's the purpose of collecting much more data about our usage? And what would private companies like banks, what would they use it for? It's entirely going to be to increase their profits, to increase their interests. It's not guaranteed that it's going to be in the interests of consumers." Said Gerard

Contact:

Manage your debt - www.moneysmart.gov.au