Your Rights With Credit Providers, Lenders and Collectors Explained

Australian law sets clear boundaries on how credit providers, lenders, and debt collectors may deal with consumers. These rules cover what they may do, what they must not do, how complaints are handled, and what happens when conduct falls outside expected standards.

Understanding rights with credit providers lenders and collectors helps consumers recognise unfair conduct and respond through proper complaint channels.

This guide sets out those rules in a structured way so you can understand the system, identify non‑compliant behaviour, and see how disputes usually progress through complaints, external review, and, in some cases, regulatory enforcement

Key takeaways

Lenders must follow responsible lending, disclosure, and dispute resolution obligations and must not engage in misleading, aggressive, or unconscionable conduct.
Unfair treatment by a credit provider generally involves misleading statements, failure to act in good faith, or disregard of established hardship and complaint processes.
Repayment pressure that ignores known hardship and capacity constraints can fall outside expected conduct under Australian consumer and credit rules.
Debt collectors are subject to strict guidance on contact frequency, permitted hours, language, privacy, and methods of communication.
Harassment, intimidation, or contact that is designed to shame or coerce rather than resolve a debt is treated as misconduct.
Internal complaints must be acknowledged and handled within specified timeframes, with access to external dispute resolution when internal processes fail.
Retaliation against a consumer for raising a complaint or using an external scheme is inconsistent with complaint handling standards and can itself be a compliance issue.
Individual disputes also contribute to detecting systemic issues, which can lead to wider enforcement or industry changes.

Introduction

Scope of this guide

This guide explains behavioural rights when dealing with:

Credit providers and lenders covered by Australian credit regulation
Debt collectors acting on behalf of those providers or as assignees of the debt.

The focus is on conduct rules, complaint processes, and enforcement pathways. It does not provide personal financial advice or individual legal advice, but sets out how the system is intended to operate and where typical problems arise.

Power imbalance and legal correction

Credit and collection relationships are structurally imbalanced. Institutions hold the contract, the systems, and access to legal and recovery tools. Consumers often hold limited information and experience.

The legislative and regulatory framework is designed to correct that imbalance by:

Imposing conduct standards on providers and collectors
Creating formal hardship and complaint channels
Providing independent dispute resolution and regulatory oversight
Requiring transparent documentation of variations and outcomes

This guide adopts that institutional perspective. It describes rights, obligations, and processes as they stand, rather than encouraging particular individual strategies.

How to use this reference

The content is organised by topic:

Rights when dealing with credit providers
Rules around repayment pressure and changed circumstances
Complaint duties and timeframes
Debt collector conduct limits
Contact and privacy boundaries
Escalation and enforcement

Each section can be read on its own to understand the standards that apply in that area. The FAQ section at the end focuses on edge cases and common misunderstandings, not repetition of the main text.

Your rights when dealing with credit providers

Rights when dealing with a lender in Australia

When dealing with a lender or credit provider, Australian law gives consumers the right to:

Clear information about credit terms, charges, and interest
- Agreements should clearly set out interest rates, fees, repayment schedules, and key contract conditions. Marketing and verbal explanations should align with written terms.
Products assessed under responsible lending and suitability obligations (for regulated credit)
- Lenders must make reasonable inquiries about the consumer’s financial situation and objectives, and assess whether a proposed credit contract would be unsuitable.
Access to hardship variation processes where the law and contract provide for them
- Where consumers experience difficulty meeting repayments because of changed circumstances, lenders must have mechanisms to receive, assess, and decide hardship requests.
Internal dispute resolution that meets regulatory standards
- Providers must operate complaint processes that are timely, fair, and consistent with regulatory guidance and scheme requirements.
External dispute resolution through an approved scheme for qualifying disputes
- Membership of an external dispute resolution body is mandatory for most licensed credit providers, giving consumers an avenue for independent review.

These rights operate within the broader consumer law framework that prohibits misleading or deceptive conduct and unconscionable conduct in trade or commerce. Lenders are expected to apply these standards consistently across their interactions with individual borrowers, from advertising through to enforcement.

What constitutes unfair treatment by a credit provider

Unfair treatment by a credit provider generally arises where conduct departs from statutory and regulatory expectations. Typical examples include:

Misrepresenting key features, costs, or risks of a credit product
- For example, downplaying variable rate risk, omitting certain fees in explanations, or overstating likely approval benefits.
Failing to follow responsible lending inquiries and verification steps before approval
- Approving credit without proper assessment of income, expenses, or existing liabilities, particularly where the result is clearly unaffordable.
Ignoring valid hardship requests rather than assessing them
- Failing to acknowledge or process hardship applications, or operating no genuine hardship process for regulated credit.
Refusing to engage with the complaint process or providing only generic responses that do not address the issues raised.
- Sending template replies that do not refer to the consumer’s actual situation, or failing to provide any reasons for a decision.
Using language or tactics that could reasonably be viewed as coercive or unconscionable
- For example, implying that a lawful complaint or hardship use will automatically lead to severe consequences, or leveraging a power imbalance in a way that shocks the conscience.

Conduct of this type may breach credit law, Australian Consumer Law, or industry codes. It also increases the likelihood that an external dispute body or regulator will intervene if a complaint is escalated.

Pressure, repayments, and changed circumstances

Repayment pressure and unaffordable amounts

Lenders are entitled to pursue amounts that are validly due under a credit contract. Standard collection communication, reminder notices, and discussions about repayment options are part of normal operation.

Pressure shifts into problematic territory where:

The lender has been informed about a material change in circumstances, such as job loss, illness, or separation.
The requested repayment schedule is clearly inconsistent with the borrower’s known capacity, based on information the borrower has provided.
There is no genuine consideration of reasonable variation or hardship options that are available under the law or contract.

Sustained demands for full contractual repayments in the face of documented hardship and limited capacity can indicate conduct that falls outside expected standards. This is relevant when assessing complaints about the responsible treatment of borrowers in difficulty and may also intersect with responsible lending obligations if the original credit decision was marginal.

Examples that often attract scrutiny include:

Instructing borrowers to use new credit to service existing loans.
Refusing to discuss any change to the schedule after receiving clear hardship information.
Threatening litigation as a first response rather than exploring alternatives.

Lender obligations when circumstances change

Where legislation or the contract provides for hardship processes, lenders are required to:

Receive and record hardship requests.
- Requests may be made in writing or over the phone, but providers should have systems to record them accurately.
Seek reasonable information to assess the request.
- This can include updated income details, expense information, and information about other debts or major changes. The level of detail should be proportionate to the size and nature of the credit.
Consider whether variation of the contract terms is appropriate.
- Options may include reduced repayments, extended terms, interest‑only periods, or temporary deferral, depending on the circumstances.
Communicate the outcome and basis for the decision.
- Borrowers should be informed whether the variation is accepted, modified, or refused, and on what basis, so they can decide whether to escalate.

A blanket refusal to assess a hardship request, or a practice of not operating any hardship process at all for regulated credit, is inconsistent with standard obligations. Disputes in this area often focus on whether the provider followed its hardship assessment procedures in good faith, documented decisions properly, and applied hardship options consistently across customers in similar situations.

Complaints and how lenders must respond

Complaint handling obligations

Credit providers are required to operate internal dispute resolution arrangements that comply with regulatory requirements and scheme membership rules. In practice, that means they must:

Acknowledge complaints within established timeframes.
- Consumers should receive confirmation that their complaint has been received and recorded.
Investigate the substance of the complaint.
- This involves reviewing account records, prior communications, and relevant policies, not simply restating the original decision.
Provide a clear and timely written outcome that addresses the issues raised.
- The response should explain the provider’s findings and the reasons for its decision in language the consumer can understand.
Inform the consumer about their right to escalate to external dispute resolution if they remain dissatisfied.
- The name and contact details of the external scheme, and any relevant time limits, should be included.

These duties apply whether the complaint relates to product features, conduct, hardship handling, reporting, or collection actions. Internal dispute resolution frameworks are regularly reviewed by regulators and external schemes to confirm they remain effective and fair.

Delays, non‑responses, and access to external schemes

Where a provider fails to respond within the required timeframe or provides only partial responses that do not resolve the complaint, the matter can generally be taken to an approved external dispute scheme. The scheme can then:

Assess whether the provider’s conduct met legal and code expectations.
- This often includes reviewing responsible lending processes, hardship handling, collection conduct, and complaint management.
Direct corrective actions, waivers, compensation, or contract changes where appropriate
- Outcomes can include reversal of certain fees and interest, re‑calculation of balances, or variation of repayment terms.
Provide a clearer determination on disputed facts and obligations.
- External schemes can make findings about what happened and set out what each party must do to resolve the dispute.

Persistent failure to meet complaint-handling standards can also attract regulatory attention, as it indicates a systemic issue rather than an isolated case. In such circumstances, regulators may require remedial programs or consider enforcement action.

Debt collector behaviour and legal boundaries

Permitted activities for debt collectors

Debt collectors, whether internal recovery teams or external agencies, are allowed to:

Advise that a debt exists and explain the amount and basis.
Request payment and discuss repayment options, including instalment arrangements.
Explain realistic legal or contractual consequences if the debt remains unpaid.
Take proportionate enforcement steps where the legal preconditions are met, such as commencing legal proceedings or enforcing a judgment.

These activities must be carried out in line with published debt collection guidance that addresses frequency of contact, appropriate hours, and acceptable language and tone. Collectors are expected to prioritise accurate information and professional conduct and to adjust their approach when a debtor is represented or has clear vulnerabilities.

When collection conduct becomes harassment

Collection conduct is treated as harassment where it departs from guidance and moves into behaviour that a reasonable person would see as oppressive. Patterns that commonly trigger this assessment include:

Repeated contact that is disproportionate to the situation
- For example, multiple calls per day over a sustained period, particularly after a request to reduce contact.
Use of threats, insults, or language that is likely to cause serious alarm
- Statements implying consequences that are not legally realistic, or personal attacks.
Unnecessary visits or contact designed to create intimidation
- Turning up unannounced at a home or workplace when other channels are available, especially at unreasonable times.
Attempts to shame the debtor through exposure to third parties
- Sharing details of the debt with family members, neighbours, or employers, or leaving messages that reveal debt status to others.

Such conduct falls outside expected standards for debt collection and is relevant for both external dispute bodies and regulators when assessing a complaint or enforcement action. Evidence such as call logs, message records, and witness statements is often critical in these cases.

Contact limits and privacy protection

Contact after a request to reduce or change communication

While collectors may need to maintain some level of contact to manage a debt, guidance expects them to adjust contact patterns when:

A consumer makes reasonable requests about preferred methods or times of contact.
Contact levels are clearly causing or likely to cause unjustified intrusion.

Standard practice is for collectors to:

Avoid excessive calls and messages.
Respect reasonable requests for written communication in place of frequent calls.
Direct future contact through a nominated representative where appropriate, such as a financial counsellor or legal adviser.

Continued high‑frequency contact that does not adjust to reasonable requests can support a finding that conduct has moved beyond acceptable practice. In disputes, detailed records of contact attempts are often used to demonstrate whether contact was reasonable or excessive.

Contacting family members, employers, and other third parties

Privacy and collection rules restrict contact with third parties. Limited contact may occur to confirm location or contact details in some circumstances, but:

Disclosure of debt details to family members, employers, or colleagues is generally prohibited.
Repeated contact with third parties about the same debt is usually inconsistent with good practice.
Attempts to apply indirect pressure by involving family or the workplace are likely to be treated as serious non‑compliance.

Complaints in this category often involve claims about the disclosure of debt information during workplace or family contact. Where verified, these cases can lead to both dispute scheme remedies for the individual and broader compliance action against the collector.

Protection, escalation, and enforcement

Options when a lender or collector treats a consumer unfairly

Where conduct by a lender or collector appears inconsistent with the standards described above, the system generally operates along the following path:

Internal complaint
- The consumer raises a written complaint with the provider or collector, setting out key facts and concerns.
- The provider investigates and responds within required timeframes, either resolving the issue or stating its position.
External dispute resolution
- If the outcome is unsatisfactory or late, the matter can be referred to an external scheme (for eligible entities and disputes).
- The scheme assesses legal compliance, fairness, and industry expectations, and can issue binding or recommended outcomes.
Regulatory oversight
- Systemic patterns identified through disputes and complaints can be referred to regulators for further review, guidance, or enforcement.
- Regulators may then issue guidance, accept enforceable undertakings, or pursue penalties for serious breaches.

This sequence reflects normal operation of the system, rather than a special process for unusual cases. Consumers are expected to use internal channels first, then external schemes, and regulators focus mainly on broader patterns and serious cases.

Retaliation and complaint‑related conduct

Complaint standards and external scheme rules treat adverse conduct in response to a complaint as problematic. Retaliation may include:

Escalating collection activity solely because a complaint or external referral has been made.
Refusing to engage constructively in hardship discussions once a complaint is lodged.
Treating the use of external dispute resolution as grounds for less favourable treatment compared with other customers.

Such behaviour is inconsistent with the principle that consumers must be free to use complaint and resolution mechanisms without penalty. Where evidence of retaliation arises, it can influence both the outcome of an individual case and any broader regulatory review. In some instances, it may lead to additional remedies or orders aimed at preventing similar behaviour in the future.

Frequently asked questions

What if a lender approved a loan that was clearly unaffordable and then refused hardship help?

Where a loan appears inconsistent with responsible lending expectations and later hardship requests are not properly assessed, external dispute bodies commonly look at both issues together. The key question is whether the provider met its obligations at approval and later handled hardship in line with policies and law. If both stages show non‑compliance, outcomes can include contract changes, fee or interest adjustments, and revised repayment terms. In some cases, part of the debt may be waived.

Can a provider demand full payment while a complaint or hardship review is open?

Providers can maintain their legal position that money is owing, but complaint and hardship guidelines expect them to manage collection activity in a proportionate way while a live dispute or assessment is underway. Aggressive escalation during an active complaint or hardship review can weigh against them when the case is assessed by an external body and may be treated as poor practice.

What if a debt collector calls from multiple numbers to bypass call screening?

Use of multiple numbers, where the intent appears to be avoiding reasonable attempts by the consumer to manage contact, can indicate conduct outside guidance on reasonable contact. In dispute processes, call logs showing very frequent attempts from varied numbers may support arguments that the pattern is excessive and harassing.

Can a collector visit my home without prior notice?

Home visits can occur in limited contexts, but must follow guidance on timing, frequency, and behaviour. Unannounced visits that are frequent, occur at unreasonable times, or involve conduct that causes alarm are more likely to be treated as non‑compliant. External dispute schemes and regulators often look carefully at home visit conduct, especially where other contact methods are available.

What if my employer learns about my debt from a collector’s call?

If a collector discloses details of a debt to an employer beyond what is strictly necessary to locate you, this may raise both privacy and conduct concerns. Such situations are often treated seriously in complaints, as they show misuse of third‑party contact. Remedies can include apologies, corrective notifications, and changes to the collector’s practices.

Can a lender refuse to provide written confirmation of a hardship arrangement?

Written confirmation of changed repayment terms is standard practice. Refusal to document an agreed variation can create evidentiary problems and is not consistent with transparent contract management. In disputes, lack of written confirmation tends to be viewed negatively for the provider, especially if the consumer has records of the discussion indicating that a change was agreed upon.

What if my complaint is closed quickly with a generic response?

A brief or generic response does not automatically breach complaint rules, but where the content does not address the specific issues raised, external schemes may treat that as poor complaint handling. This can justify a fresh review of the underlying issues and, in some cases, additional remedies, including compensation for distress or inconvenience caused by the poor handling.

Can I be refused future products because I complained?

Providers remain free to make legitimate commercial decisions about new credit, but a refusal that appears linked purely to the fact of a past complaint can raise concerns about retaliatory conduct. Proving that link can be difficult; patterns across multiple customers or internal documents are often needed. Nonetheless, such concerns can form part of a broader regulatory picture and may be taken into account if other issues emerge.

What if a collector keeps contacting me even after I appoint a representative?

Once a valid authority is provided, standard practice is to direct contact through the nominated representative, subject to some exceptions. Ongoing direct contact in disregard of a clear authority can raise questions about compliance with collection guidelines and can be included in any complaint to an external scheme or regulator.

How often do regulators take action over debt collection or lender conduct issues?

Public enforcement actions are less frequent than individual complaints but tend to focus on systemic issues, such as widespread misuse of default listings, non‑compliant hardship practices, or aggressive collection models. Individual complaints, when aggregated, contribute to identifying these patterns and can influence future regulatory focus, guidance updates, and industry reforms.

Conclusion

Australian rules on credit providers, lenders, and collectors create defined behavioural boundaries. Those rules set expectations for fair treatment, reasonable repayment handling, structured complaint processes, and respectful, limited collection conduct.

When conduct sits outside those boundaries, the system provides:

Internal complaint channels with time‑bound responses
External dispute schemes with the power to review and direct outcomes
Regulatory oversight for systemic or serious breaches

Consumers who understand these boundaries can more accurately identify non‑compliant behaviour and use existing channels to address it.

If you are comparing financial products for your household or daily needs and want options that align with responsible use of credit, you can check out our products separately from this rights information.

Disclaimer: This article is based on research and our views only and does not constitute legal or financial advice. For advice about your specific circumstances, please reach out to us.

About the Author

Kuldeep Singh is the Founder of Easy Credit Repair and an Australian Credit Representative (Credit Representative Number 552536). He is a member of the Australian Financial Complaints Authority (AFCA Membership Number 102217). His work focuses on assisting consumers across Australia with credit report disputes, unaffordable lending issues, defaults, and debt-related complaints, helping individuals understand and exercise their rights under Australian credit law.