Due: Before 11pm on 28 May.
Weighting: This assignment is worth 40% of your final grade
Length: 1500 word limit (Words after 1650 will not be marked. Footnotes are not included in the word limit as long as they only contain references.
Rationale: The aim of this assignment is to help you develop the skills of identifying and understanding the legal issues raised by a hypothetical set of facts and applying the law to the resolution of these issues. This is an essential skill in professional practice where thoroughness and competence are basic expectations.
Facts
Denise is a woman in her late 50s who works casually at the local primary school office and receives the disability pension. For many years she has been renting several appliances from ‘Ready Rentals’ (RR).
On 30 June 2019, she received a letter from RR informing her that there had been a billing error and her account was in arrears by $1,800. Enclosed in the letter was a bill for the full $1,800 plus $186 (the rental fees due that month). The total amount of $1,986 was listed as being due by 31 July 2019.
On 7 July 2019, Denise called RR to find out some more information about her surprisingly large bill. She spoke to a staff member called Jim and requested a payment plan to give her more time to pay it off. She had recently lost her job and wasn’t in a position to pay off the full amount that month. Jim told her that he would follow up on that request and that someone would be in touch with her shortly.
On 13 July 2019, Denise was involved in a car accident. She was badly injured with a serious brain injury and spent two weeks in hospital before being sent home on 30 July 2019. While Denise was in hospital, she missed two calls and a letter from RR attempting to arrange a payment plan for her debt. When she failed to respond to the letter or to pay the full amount on 31 July 2019, RR sold her debt to a debt collection agency – Fast Collections Inc (‘FCI’).
Denise’s son, Hudson, was at her house on 5 August 2019 when the phone rang. He answered it and the person on the line introduced themselves as Anne from FCI. Anne asked to speak to Denise and Hudson said, ‘Sorry, Mum’s sleeping right now. She just got home from hospital and is recovering from a bad car accident.’
Anne asked Hudson when a good time might be to call back, and Hudson said, ‘Not for a while. She’s really unwell and needs some time to recover.
Anne wrote the details of this call on to Denise’s new file and wrote, ‘Call back on 5 September 2019’ at the top.
Meanwhile, Hudson found the letters from RR and googled FCI to discover they were a debt collection agency.
The following week, on 12 September 2019, Derrick picked up Denise’s file at FCI and decided to follow up on the debt. When he called, Denise answered, and he asked her to identify herself. Shakily she did. Derrick then proceeded to tell Denise that she owed FCI $1,986 and that she needed to pay the amount in full within 7 days.
Denise was confused and intimidated by Derrick’s words and started to cry. ‘I don’t understand,’ she said. ‘Who is FCI? I don’t owe you any money.’
Derrick explained that the debt had been transferred from Ready Rentals and Denise started to understand what was going on. ‘But I don’t have $1,986,’ she said. ‘I’ve recently lost my job and I’ve just come out of hospital. Jim, from Ready Rentals, said that we could arrange a payment plan.’
Derrick responded, ‘It’s too late for that now. If we don’t get something from you this week, we might need to commence legal proceedings against you.’
Denise began to cry again, and at that moment Hudson arrived at the house to check on her. Hudson took the phone from Denise and said, ‘Who are you and what is all this about?’
Derrick introduced himself as being from FCI but claimed that he couldn’t say anything further due to confidentiality. Having guessed what was going on, Hudson said, ‘As I told you guys last week, my mother just got out of hospital. She’s not working and can’t afford to pay you right now. You need to back off and let her recover.’
Derrick asked to speak to Denise again, but Hudson refused and hung up.
On Denise’s file, Derrick wrote ‘Son claims she is sick. Call back on 19 September 2019.’
On 19 September 2019, another person from FCI called Denise’s phone. When Hudson answered the phone, they asked to speak to Denise urgently. Again, he told them that she was unwell and did not have the means to pay her debt immediately. Further notes were made on her file.
On 20 September 2019, Denise received a letter from FCI with the heading FINAL NOTICE. In the letter, FCI stated that she had 7 days to pay them $1,986 or they may commence legal action.
On 25 September 2019, Denise received another letter from DCI with the heading 48 HOUR NOTICE. In the letter, FCI stated that she had 48 hours to pay them $1,986 plus costs or they may commence legal action.
FCI’s internal policy was that debtors who were experiencing hardship should be given time to pay off their debts via a payment plan, where reasonable terms could be agreed. The policy also stated that legal action will not be commenced against debtors experiencing financial hardship unless all other reasonable options have been pursued. Denise was never offered a payment plan, nor was her file transferred to the legal department (and there was no evidence to indicate that there were plans to do so.)
FCI’s letters and phone calls continued for several months, with FCI making a total of 13 phone calls and sending a total of 10 letters of demand. The stress of the calls and letters had a detrimental effect on Denise’s health, and she was readmitted to hospital in early December with severe chest pains. Fed up and worried about his mum, Hudson decided to approach the ACCC to take action against FCI under the Australian Consumer Law.
Instructions:
You are a legal officer at the ACCC. You have interviewed Hudson about his mother’s experience with FCI and gathered further information by obtaining Denise’s file from FCI, copies of the relevant letters of demand and the recordings of the phone conversations with Denise (and Hudson) recorded by FCI, and Denise’s health and financial records.
- You have been asked to write an internal legal memo summarizing the facts, the legal issues raised by those facts, and recommending what (if any) action should be taken by the ACCC against FCI under the Australian Consumer Law (ACL).
You should support your recommendations with specific provisions of the ACL, and a discussion of any relevant legal principles and case law.
