Fair Trading Amendment (Commercial Agents) Bill 2016

Dr HUGH McDERMOTT ( Prospect ) ( 16:39 ): The Fair Trading Amendment (Commercial Agents) Bill 2016 seeks to repeal the Commercial Agents and Private Inquiry Agents Act 2004 and amend the Fair Trading Act 1987. Essentially, the bill seeks to change the commercial debt collection system in New South Wales so that licences will no longer be required for debt collectors, especially those who undertake face-to-face debt collection. Currently to get a licence both the debt collection agency and the agent must be licensed. Licensees must undertake prescribed training, be fingerprinted and be considered as a fit and proper person as defined by the Act. Considering the nature of the work, the current regulatory framework is very reasonable. Without doubt this legislation raises serious concerns, especially relating to its impact on the debt collection process and face-to-face collection in particular.

My biggest concern is this Government has ignored the number one recommendation of the inquiry into debt recovery performed by the Legislative Assembly Legal Affairs Committee, which was to retain licences for field agents. The point of the legislation was to reduce business costs for the 80 per cent of debt recovery workers who work in call centres. That is fair enough. Legislation to help reduce business costs is a good thing because it leads to jobs. Instead, this Government seems to want to open the floodgates and remove licensing for those involved, including face-to-face recovery agents. The Parliamentary Secretary spoke about the protections that have been put in place so that prescribed persons and organisations will not be able to be recovery agents in face‑to-face situations. However, I see these changes as a bonanza for organised crime.

The reality is that the people the Parliamentary Secretary spoke about, such as those who have been imprisoned for more than three months and other prescribed persons, will be able to get enforcers to harass people so that they can basically become face-to-face recovery agents without any licensing requirements. Organised crime groups such as the Gypsy Jokers in Horsley Park and the Comancheros and others have plenty of members with no criminal convictions who are not on the radar. Those people could easily be put in place to become debt recovery agents. Let us be honest, with the lockout laws, who needs to be making money in Kings Cross nightclubs when you can get a debt collection business up and going? There will be an organised crime jobs boom in debt collection if this bill is passed.

The amendments in the bill are opposed by Legal Aid NSW and the Financial Rights Centre, with good reason. Both agencies raise a very reasonable concern that people who are visited by debt collectors in their home or place of business are often vulnerable. A physical licence can add a degree of confidence that a debt collector is an authorised person, just like a police officer or a Fair Trading official showing their badge. Without the requirement for identification, how would somebody being visited by a debt collector actually know that the person is a debt collector and not a scam artist?

Even the Baird Government's grounds for removing the licensing system seem unreasonable to me. The belief was that licensing was not required because of the small number of complaints of misconduct. Such a belief is self-contradictory. The reason for the low number of complaints regarding misconduct was because of the licensing system, which the NSW Police Force is responsible for. By the Baird Government's flawed logic it could abolish the driving, liquor, gambling, firearms, tradesperson and environmental licensing systems for the same result. In addition, there is no evidence of red tape savings by introducing this bill. In fact, costs for businesses may increase and cost the community $16 million.

Not all of this legislation is bad. For example, shifting the licensing responsibility for debt collectors from the NSW Police Force to NSW Fair Trading will free up resources for the police, who would rather be protecting our community. However, it is essential that serious amendments are made to this legislation to ensure it is reasonable and in the best interests of this State and its people. The first amendment I suggest would be adequately resourcing of NSW Fair Trading for the extra work it will have to do when accepting responsibility for debt collection regulation—something that is completely off the Baird Government's agenda. How can the Government transfer all of this work to Fair Trading and not resource that department?

The removal of licences, otherwise known as a negative licensing scheme, could be amended to only apply to the 75 per cent of the industry that comprises the 80 per cent of agents who are not involved in face‑to‑face work. Even then, call centre workers cannot be let off the hook because complaints already exist as to the conduct of debt collection call centres. Furthermore, the Baird Government must keep a close eye on the change in legislation to ensure that it is reviewed within two years.

After some consultation, the community in Western Sydney and I have decided that if this bill passes we will open the Prospect Community Debt Collection Company. Here are a few debts I will be collecting from the Baird Government: $6 million for overdue upgrades to Fairfield Hospital; $5.1 million to fulfil the public schools maintenance backlog in Prospect; and $12 million to start the Toongabbie station easy access upgrade. In fact, under this legislation I could get the 50,000-plus residents in Prospect, who are being short-changed by this Government, to become employees of the debt collection company. As firsthand victims of the Baird Government's underinvestment in our community, they will be more than keen to collect what they are owed. In conclusion, this bill butchers the recommendations of the inquiry into debt recovery in New South Wales and must be amended to meet the expectations of the community.

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