ASIC sues A&M Group — aka Debt Negotiators — in the Federal Court

Sydney’s A&M Group — aka Debt Negotiators — is accused of calling or texting the immediate family of a debtor 16 times in a bid to coerce payment.

The corporate regulator alleges a major debt agreement administrator sent unlawful texts threatening fraud charges and jail if payments weren’t made.

In documents filed in the Federal Court, the Australian Securities and Investments Commission also accuses A&M Group Pty Ltd of calling and texting debtors’ friends, family and work colleagues to embarrass the debtors into contacting the Bankstown-based company.

ASIC deputy chair Sarah Court told The Daily Telegraph that “if the allegations are made out, there is some very concerning conduct here.”

Trading under the name Debt Negotiators, A&M administers about 5000 debt agreements, giving it a 14 per cent market share among 34 registered operators.

A debt agreement — also known as a Part IX debt agreement — is a formal way for a debtor to settle their debts with creditors.

As a registered debt agreement administrator, A&M Group collects payments from the debtor and distributes payments to creditors.

ASIC’s allegations relate to the treatment of six debtors.

A&M is accused of telling some that their ability to travel may be restricted unless a payment is made, and that creditors could obtain a garnishee order under which debtors could lose 80 per cent of their income.

Court documents filed by ASIC say the “defaulting debtor representations were not true and were not based on information or communications received from creditors.

“Further, insofar as they related to any future matter, they were not made on reasonable grounds.

“They were based on templates and made without regard to their factual accuracy and whether there were reasonable grounds to support the making of the statements contained in those templates in the circumstances of a particular debtor,” ASIC claims in the court documents.

“The defaulting debtor representations were a tactic illegitimately used by A&M Group to pressure debtors to contact A&M Group and/or make payments under their debt agreements.”

Treasurer Josh Frydenberg with ASIC Chair Joe Longo and Deputy Sarah Court.

The regulator is seeking penalties and declarations that A&M Group breached a section of the ASIC Act that prohibits misleading or deceptive conduct.

A&M Group is yet to file a response to ASIC’s claims. Its sole director did not respond when contacted by The Telegraph.

The action against A&M Group is the third of its type that ASIC has taken this year.

These include suing debt collector Ultimate Credit Management after the company allegedly breached its credit licensee obligations by commencing proceedings against 24 borrowers in NSW even though the borrowers lived in other states.

ASIC and the Australian Competition and Consumer Commission have jointly produced a guide called “Dealing with debt collectors”. This contains advice on what is unlawful behaviour and how to complain.