FINDING. De-identified Finding. DATE: 11 September 2002

Transcription

1 Australian Banking Industry Ombudsman Limited FINDING DISPUTANT: BANK: CASE NO: Mr B Bank De-identified Finding DATE: 11 September 2002 The following is the finding I have reached in the case of Mr B ( the disputant ) and Bank ( the bank ). Investigation I have reviewed: 1. All of the information provided by the disputant and the bank; and 2. The circumstances of the case with an overall regard to fairness. The Dispute The dispute is: 1. The disputant has a credit card account with the bank. The account fell into arrears and collection of the debt was outsourced to a mercantile agent in May In September 2001 the disputant was injured in a car accident and spent several weeks in hospital; 3. On 18 April 2002, the disputant appointed a financial counsellor to act on his behalf in relation to the debt. The financial counsellor wrote to the mercantile agent on 18 April 2002 to advise that she was acting on behalf of the disputant and that the agent should deal directly with the her. The letter was faxed and sent by mail on 22 April 2002;

2 2 4. The letter also advised that the disputant expected to receive a substantial compensation payment as a result of his accident and would use some of the funds received to pay the debt owed to the bank; 5. The financial counsellor contacted the mercantile agent by telephone on 22 April 2002 and was told that there was no authority held on its file and no one would speak to her; 6. The financial counsellor rang again and was told that the authority had been located, but the bank declined to give the disputant a 12 month grace period for payment of the account; 7. The mercantile agent also told the financial counsellor that it had marked [the disputant] down for a field visit from the sheriff to undertake an asset appraisal; 8. The use of the word sheriff is likely to mislead and confuse and implies that the bank had a right to seize or interfere with assets without taking appropriate legal steps. In fact, the disputant s assets would be protected by the Judgment Debt Recovery Act; 9. On about 30 May 2002, a mercantile agent identifying himself as Richard who the Bank had sent visited the disputant to ask questions about the debt and the disputant s financial circumstances; 10. The visit was meant to intimidate the disputant and, as such, the disputant is entitled to compensation for the unkind treatment displayed by the bank. Bank Response In response to the dispute, the bank said: 1. In May 2001, the disputant offered to commence repayments of $50 per month, but did not do so; 2. In June 2001, the disputant again offered to commence payments of $50 per month from July 2001, after an initial immediate payment of $100, but no payment was received;

3 3 3. The disputant failed to return telephone calls from the mercantile agent and was sent a demand notice on 28 September 2001; 4. The disputant told the mercantile agent in November 2001 that he had been involved in a car accident, and that he would write to the agent. However, he did not do so; 5. In March 2002, the mercantile agent called the disputant, who advised that he held equity of approximately $130,000 in his home, but could not draw against the equity; 6. The agent contacted the disputant again on 10 April 2002 and was told that he had an appointment to see a financial counsellor the following week; 7. The financial counsellor contacted the mercantile agent on 22 April 2002, and advised that she had sent the authority to act by facsimile. The agent located the authority on 24 April 2002; 8. The mercantile agent did not tell the financial counsellor that the sheriff would be visiting the disputant, but rather that a field agent had already been engaged to interview the disputant; 9. The field agent was not sent to intimidate the disputant, but rather to assess his financial situation and ability to commence payments; 10. The bank has agreed not to pursue the debt for 12 months to allow the disputant to receive his compensation payment. Questions The questions raised by the case include: 1. Did the bank, through its agent, breach any law by sending a field agent to visit the disputant, after being notified that a financial counsellor had been appointed to act on his behalf? 2. Did the agent mislead the disputant as to the purpose of the visit? 3. Did any other actions by the bank s agent breach any law?

4 4 4. If so, should the bank be required to compensate the disputant? Background to the dispute The disputant has a credit card account. It appears that the account had been in arrears for some time prior to May 2001 and that collection of the debt was outsourced to a mercantile agent in May The bank has provided me with the notes made by the collection agent in relation to collection of the debt. Between May 2001 and April 2002, there appears to have been quite extensive contact between the mercantile agent and the disputant to discuss repayment of the debt, with many arrangements for payment made. However, it appears that no payment was made during this time. The agent s notes indicate that on 8 October 2001, the agent became aware that the disputant had been involved in a car accident and was in rehabilitation. The agent telephoned the disputant again on 8 November 2001 and entered the following file note: Cll dtr in a wheel chair & on crutches due to car going through a red light.. been in hospital last 10 wks.. he advised his disputing $1500 due to a business transaction, Bank didn t compensate when others have.. so he will fax a ltr of dispute re this & we can discuss balance I understand from this that the disputant was raising a dispute about one transaction on the account, but not the entire account. The agent appears to have telephoned the disputant again on 14 December 2002, 14 January 2002, 16 February 2002, 22 February 2002, 15 March 2003 and 10 April 2002 and the disputed amount was discussed. The disputant appointed the financial counsellor on 16 April Assessment It appears to be agreed, as between the bank and the disputant, that the bank s mercantile agent had notice of the appointment of a financial counsellor by 24 April 2002 (although my reading of the

5 5 mercantile agent s notes suggests that it did not locate the authority until 30 April 2002). Regardless of whether the date was 24 or 30 April, it is agreed that a field agent visited the disputant at his home on or about 30 May This is a least one month after the mercantile agent knew of the appointment of the financial counsellor and five or six months after the agent became aware of the disputant s accident. The financial counsellor said that during a telephone conversation with the mercantile agent, the agent had threatened to send the sheriff to visit the disputant to conduct an asset appraisal. The financial counsellor described this action as intimidation and harassment, which she said breached the Debt Collection Guideline issued by the Australian Consumer and Competition Commission ( ACCC ) and section 60 of the Trade Practices Act The bank said that its agent advised that it has not raised any mention of the sheriff or an asset appraisal, and that these terms had been initiated by the financial counsellor. The bank said: Her [the agent s] recollection was that you [ ie the financial counsellor] initiated comments regarding the Sheriff and that she did not make any suggestion that they were considering such action. Diane s recollection of her response was that a field agent had already been engaged to interview Mr B, with a view to assessing his financial situation, and not to seize personal belongings or do worse I have reviewed the notes made by the agent note that there was a telephone discussion between the agent and the financial counsellor on 30 April 2002, in which the disputant s accident and claim for compensation was discussed and a request made to park this account for a year. A file note dated 7 May 2002 states: Not prepared to hold for 1 year. issue field call to property for better idea of [debtor] asset situation. The field call appears to have been arranged on 28 May It is evident from the agent s notes that the financial counsellor called the agent on 3 June 2002 to complain about the visit and to describe it as harassment.

6 6 I consider that the agent s file note for 7 May 2002 points to the conclusion that the decision to send the field agent was taken after the first telephone conversation with the financial counsellor. The second conversation appears to have occurred after the visit. The file note set out above suggests that the term asset situation was used by the agent prior to any mention of that term by the financial counsellor. While it may be that the financial counsellor referred to the sheriff rather than field agent when she rang to complain about the visit, I am satisfied that the agent ordered the appraisal of the disputant s asset situation on 7 May 2002, almost a month prior to the financial counsellor ringing to complain about the visit. This lends support to the claim made by the disputant s financial counsellor that the agent raised the issue. As the debt in question was a credit card debt, and presumably unsecured, it is difficult to see how the disputant s asset situation could be relevant to recovery of the debt. The bank has confirmed that no judgment had been obtained by the bank. Therefore, it appears that it was not appropriate to conduct an asset review in May In addition to this, the actions in sending the field agent after appointment of the financial counsellor points to a contravention of the Debt Collection Guideline was issued by the ACCC in The Guideline was prepared to assist corporations to comply with section 60 of the Trade Practices Act. In the introduction to the Guideline the ACCC says: The Commission considers that the conduct described in the guideline would, in most circumstances, be at risk of contravening the relevant laws. It should be noted, however, that a contravention of s. 60 does not act as a defence to any obligation to pay a debt. The document goes on to say: This guideline does not have legal force To decide whether the legislation has been breached the Commission approaches each matter on a case-by-case basis, taking into account all relevant circumstances. Compliance with the guideline is only one factor to be considered. This means that full compliance with

7 7 the guideline can help minimise the risk of breaching the law, but cannot provide businesses with a guarantee against litigation. The Guideline deals with the issue of communication via a debtor s representative with the following principle: A debtor is entitled to have another party represent them and/or advocate on their behalf when communicating with the collector. In turn, representatives must act reasonably, and the collector should be entitled to contact the debtor directly in appropriate circumstances. The Guideline to the principle states clearly that once the collector knows that a financial counsellor is representing the debtor, the collector should not communicate with the debtor directly. To this principle, it gives a number of exceptions. The only one of those exceptions, which would apply to the bank s agent in this matter, is where the agent had not received notification of the financial counsellor s appointment. The Guideline also deals with personal visits with the following principle: Where necessary a collector is entitled to communicate with the debtor by visiting in person. However, a collector should respect the debtor s own, and the household s privacy and security. Generally a collector should not use personal visits as the initial step in communicating with the debtor, and personal visits should not be used if other, less intrusive, means of communication are available and effective. The example set out beneath the principles states that: A collector should not visit a debtor in connection with the collection of any debt at any time or place known or which should be known to be substantially inconvenient to the debtor, without the prior consent of the debtor given directly to the collector. In this instance, the agent was aware of the accident that the disputant had been involved in, and that he was injured. There is no information to suggest that the agent made an appointment to visit, and the disputant says that it did not. I consider that the agent should have been aware that the visit would be substantially inconvenient for the disputant and should have made an appointment.

8 8 In my view, the agent acted contrary to the Guideline by ordering and arranging the field visit in May 2002, because it was, by that time, well aware of the appointment of the financial counsellor and the fact that the disputant was recuperating from injuries, making an unexpected visit substantially inconvenient. As such, I consider that the bank s agent did not adopt good banking practice in taking the steps that it did. However, acting contrary to the Guideline is not, of itself, a breach of any law. It is necessary to consider the actions of the agent and whether they amount to a breach of section 60 of the Trade Practices Act Section 60 provides: A corporation shall not use physical force or undue harassment or coercion in connection with the supply or possible supply of goods or services to a consumer or the payment for goods or services by a consumer. In order to breach the section, a corporation must engage in coercion or undue harassment. In ACCC v Maritime Union of Australia [2001] FCA 1549, Hill J described harassment as follows: The word harassment means persistent disturbance or torment. In the case of a person employed to recover money owing to others, it can extend to where there are frequent unwelcome approaches requesting payment of a debt. However, such unwelcome approaches would not constitute undue harassment, at least where the demands made are legitimate and reasonably made. On the other hand where the frequency, nature or content of such communications is such that they are calculated to intimidate or demoralise, tire out or exhaust a debtor, rather than merely to convey the demand for recovery, the conduct will constitute undue harassment Generally it can be said that a person will be harassed by another when the former is troubled repeatedly by the latter. The reasonableness of the conduct will be relevant to whether what is harassment constitutes undue harassment. Therefore, harassment will be undue and in breach of the Trade Practices Act if it is frequent and if calculated to demoralise, tire or exhaust a debtor.

9 9 In the present case, the bank s agent was aware that the disputant had appointed a financial counsellor to act for him. The agent was also aware that the disputant was recovering from an accident which saw him in hospital for 10 weeks and after that, on crutches and in a wheelchair. In a letter to this office dated 12 June 2002, the visit was described as follows: Mr B told me that on about the 30 th May, a man who identified himself as Richard who the bank had sent visited Mr B. Mr B said he was a very burley looking chap who would not have intimidated me in my younger days when I practised marshal (sic) arts, but anyway he turned out to be quiet (sic) nice came in and asked a lot of questions which did not bother me as I just told him the truth and that I would pay when times were brighter. The disputant s financial counsellor has provided further information about the visit by facsimile dated 2 September 2002, as follows: At the time of the visit Mr B was not long out of hospital. He could hardly walk and indeed even moving his leg.. caused him extreme pain. His leg at the time was also infected. His wife was not home so he felt he had no choice except to open the door himself when he had the unexpected visit. He let the chap in before waiting to find out who he was as it was cold. The cold caused more discomfort on his exposed leg and he was anxious to rest it again. He was very distressed due to pain this activity caused. He was then quiet (sic) disturbed and really confused; when the chap said the Bank had sent him he was still distressed by this uncalled for visit when I spoke to him a few days later. While it appears that the disputant was in pain and alone when the agent called without an appointment, I am not satisfied that the bank s actions amount to harassment. The visit appears to be the only instance of direct contact after appointment of the financial counsellor and I am not satisfied that it was calculated to demoralise, tire or exhaust the disputant. I do not consider that the visit constituted harassment as described by Hill J.

10 10 Nor do I consider that the actions of the agent amount to coercion, because there was no suggestion that any threat of force or compulsion was made, which are elements of coercion (ACCC v Maritime Union of Australia [2001] FCA 1549 per Hill J). The information provided suggests that the agent asked questions which did not bother the disputant, and then left. On the basis of this description, I am unable to conclude that the bank s agent engaged in behaviour which could be described as intimidation as there is no evidence of any threat by the field officer and the disputant appears not to have been intimidated in any way. Compensation for stress and inconvenience The disputant has claimed compensation for stress and inconvenience caused as a result of the visit by the field agent. The Ombudsman has the power to award compensation for loss or damage. Claims for non financial loss include claims for stress, inconvenience, anxiety and disappointment. It is only in limited circumstances that compensation is considered for stress, inconvenience, anxiety and disappointment. An award for such damage is unlikely to be substantial. The following matters are relevant to the assessment of a claim for non financial loss or damage. Disputant s Resilience In assessing whether an award may be made for such loss or damage, disputants are expected: 1. To be moderately robust in the way in which they deal with a problem; 2. To take responsibility for ensuring that their financial affairs are in order in the ordinary course of the transactions concerned; 3. To bear the ordinary and normal degree of inconvenience associated with correcting an unexpected problem; and 4. To take reasonable steps to minimise the inconvenience suffered.

11 11 Assessment of Claim Factors to be taken into account in assessing a claim for non financial loss may include: 1. The extent of actual physical inconvenience, including the length of time it persisted and its degree; 2. The extent to which the disputant used his/her time to rectify the situation; 3. The extent to which the disputant s expectation of enjoyment and peace of mind was interfered with for reasons beyond the disputant s control and as a result of the act or omission of the bank. Simple Inconvenience Claims for simple inconvenience are not sufficiently substantial to warrant compensation. It is clear from the notes made by the bank s agent that the disputant had recently been discharged from hospital after the hit and run accident. The disputant described the visit as unexpected (in that no appointment was made) and made when the disputant s wife was out. I accept that the visit, made at the time that it was, would have been difficult and confusing for the disputant, given his injuries and the fact that he had recently been discharged from hospital and had appointed a financial counsellor, whom he could reasonably expect to deal with the bank on his behalf. As such, I consider that the agent should have been aware that sending a field agent would, more likely than not, cause stress and inconvenience to the disputant. I am satisfied that the visit did cause stress and inconvenience, due to the difficulty in attending to the visit while recovering from injuries. In my view, it would be appropriate for the bank to compensate the disputant by paying him the amount of $500.

12 12 Finding In my view: 1. The bank s agent was aware of the appointment of the financial counsellor by 30 April 2002; 2. The agent arranged for a field officer to call at the disputant s home on 7 May 2002; 3. This action breached the Debt Collection Guidelines issued by the ACCC; 4. I am unable to conclude that the visit breached section 60 of the Trade Practices Act, as coercion or undue harassment; 5. I do not consider that the disputant was intimidated by the visit; 6. The visit by the field officer was both inconvenient and stressful to the disputant; 7. It would be appropriate for the bank to compensate the disputant for this stress and inconvenience by paying $500. Case Manager

13 Australian Banking Industry Ombudsman Limited FINDING DISPUTANT: BANK: CASE NO: Mr B Bank De-identified Finding DATE: 11 September 2002 The following is the finding I have reached in the case of Mr B ( the disputant ) and Bank ( the bank ). Investigation I have reviewed: 1. All of the information provided by the disputant and the bank; and 2. The circumstances of the case with an overall regard to fairness. The Dispute The dispute is: 1. The disputant has a credit card account with the bank. The account fell into arrears and collection of the debt was outsourced to a mercantile agent in May In September 2001 the disputant was injured in a car accident and spent several weeks in hospital; 3. On 18 April 2002, the disputant appointed a financial counsellor to act on his behalf in relation to the debt. The financial counsellor wrote to the mercantile agent on 18 April 2002 to advise that she was acting on behalf of the disputant and that the agent should deal directly with the her. The letter was faxed and sent by mail on 22 April 2002;

14 2 4. The letter also advised that the disputant expected to receive a substantial compensation payment as a result of his accident and would use some of the funds received to pay the debt owed to the bank; 5. The financial counsellor contacted the mercantile agent by telephone on 22 April 2002 and was told that there was no authority held on its file and no one would speak to her; 6. The financial counsellor rang again and was told that the authority had been located, but the bank declined to give the disputant a 12 month grace period for payment of the account; 7. The mercantile agent also told the financial counsellor that it had marked [the disputant] down for a field visit from the sheriff to undertake an asset appraisal; 8. The use of the word sheriff is likely to mislead and confuse and implies that the bank had a right to seize or interfere with assets without taking appropriate legal steps. In fact, the disputant s assets would be protected by the Judgment Debt Recovery Act; 9. On about 30 May 2002, a mercantile agent identifying himself as Richard who the Bank had sent visited the disputant to ask questions about the debt and the disputant s financial circumstances; 10. The visit was meant to intimidate the disputant and, as such, the disputant is entitled to compensation for the unkind treatment displayed by the bank. Bank Response In response to the dispute, the bank said: 1. In May 2001, the disputant offered to commence repayments of $50 per month, but did not do so; 2. In June 2001, the disputant again offered to commence payments of $50 per month from July 2001, after an initial immediate payment of $100, but no payment was received;

15 3 3. The disputant failed to return telephone calls from the mercantile agent and was sent a demand notice on 28 September 2001; 4. The disputant told the mercantile agent in November 2001 that he had been involved in a car accident, and that he would write to the agent. However, he did not do so; 5. In March 2002, the mercantile agent called the disputant, who advised that he held equity of approximately $130,000 in his home, but could not draw against the equity; 6. The agent contacted the disputant again on 10 April 2002 and was told that he had an appointment to see a financial counsellor the following week; 7. The financial counsellor contacted the mercantile agent on 22 April 2002, and advised that she had sent the authority to act by facsimile. The agent located the authority on 24 April 2002; 8. The mercantile agent did not tell the financial counsellor that the sheriff would be visiting the disputant, but rather that a field agent had already been engaged to interview the disputant; 9. The field agent was not sent to intimidate the disputant, but rather to assess his financial situation and ability to commence payments; 10. The bank has agreed not to pursue the debt for 12 months to allow the disputant to receive his compensation payment. Questions The questions raised by the case include: 1. Did the bank, through its agent, breach any law by sending a field agent to visit the disputant, after being notified that a financial counsellor had been appointed to act on his behalf? 2. Did the agent mislead the disputant as to the purpose of the visit? 3. Did any other actions by the bank s agent breach any law?

16 4 4. If so, should the bank be required to compensate the disputant? Background to the dispute The disputant has a credit card account. It appears that the account had been in arrears for some time prior to May 2001 and that collection of the debt was outsourced to a mercantile agent in May The bank has provided me with the notes made by the collection agent in relation to collection of the debt. Between May 2001 and April 2002, there appears to have been quite extensive contact between the mercantile agent and the disputant to discuss repayment of the debt, with many arrangements for payment made. However, it appears that no payment was made during this time. The agent s notes indicate that on 8 October 2001, the agent became aware that the disputant had been involved in a car accident and was in rehabilitation. The agent telephoned the disputant again on 8 November 2001 and entered the following file note: Cll dtr in a wheel chair & on crutches due to car going through a red light.. been in hospital last 10 wks.. he advised his disputing $1500 due to a business transaction, Bank didn t compensate when others have.. so he will fax a ltr of dispute re this & we can discuss balance I understand from this that the disputant was raising a dispute about one transaction on the account, but not the entire account. The agent appears to have telephoned the disputant again on 14 December 2002, 14 January 2002, 16 February 2002, 22 February 2002, 15 March 2003 and 10 April 2002 and the disputed amount was discussed. The disputant appointed the financial counsellor on 16 April Assessment It appears to be agreed, as between the bank and the disputant, that the bank s mercantile agent had notice of the appointment of a financial counsellor by 24 April 2002 (although my reading of the

17 5 mercantile agent s notes suggests that it did not locate the authority until 30 April 2002). Regardless of whether the date was 24 or 30 April, it is agreed that a field agent visited the disputant at his home on or about 30 May This is a least one month after the mercantile agent knew of the appointment of the financial counsellor and five or six months after the agent became aware of the disputant s accident. The financial counsellor said that during a telephone conversation with the mercantile agent, the agent had threatened to send the sheriff to visit the disputant to conduct an asset appraisal. The financial counsellor described this action as intimidation and harassment, which she said breached the Debt Collection Guideline issued by the Australian Consumer and Competition Commission ( ACCC ) and section 60 of the Trade Practices Act The bank said that its agent advised that it has not raised any mention of the sheriff or an asset appraisal, and that these terms had been initiated by the financial counsellor. The bank said: Her [the agent s] recollection was that you [ ie the financial counsellor] initiated comments regarding the Sheriff and that she did not make any suggestion that they were considering such action. Diane s recollection of her response was that a field agent had already been engaged to interview Mr B, with a view to assessing his financial situation, and not to seize personal belongings or do worse I have reviewed the notes made by the agent note that there was a telephone discussion between the agent and the financial counsellor on 30 April 2002, in which the disputant s accident and claim for compensation was discussed and a request made to park this account for a year. A file note dated 7 May 2002 states: Not prepared to hold for 1 year. issue field call to property for better idea of [debtor] asset situation. The field call appears to have been arranged on 28 May It is evident from the agent s notes that the financial counsellor called the agent on 3 June 2002 to complain about the visit and to describe it as harassment.

18 6 I consider that the agent s file note for 7 May 2002 points to the conclusion that the decision to send the field agent was taken after the first telephone conversation with the financial counsellor. The second conversation appears to have occurred after the visit. The file note set out above suggests that the term asset situation was used by the agent prior to any mention of that term by the financial counsellor. While it may be that the financial counsellor referred to the sheriff rather than field agent when she rang to complain about the visit, I am satisfied that the agent ordered the appraisal of the disputant s asset situation on 7 May 2002, almost a month prior to the financial counsellor ringing to complain about the visit. This lends support to the claim made by the disputant s financial counsellor that the agent raised the issue. As the debt in question was a credit card debt, and presumably unsecured, it is difficult to see how the disputant s asset situation could be relevant to recovery of the debt. The bank has confirmed that no judgment had been obtained by the bank. Therefore, it appears that it was not appropriate to conduct an asset review in May In addition to this, the actions in sending the field agent after appointment of the financial counsellor points to a contravention of the Debt Collection Guideline was issued by the ACCC in The Guideline was prepared to assist corporations to comply with section 60 of the Trade Practices Act. In the introduction to the Guideline the ACCC says: The Commission considers that the conduct described in the guideline would, in most circumstances, be at risk of contravening the relevant laws. It should be noted, however, that a contravention of s. 60 does not act as a defence to any obligation to pay a debt. The document goes on to say: This guideline does not have legal force To decide whether the legislation has been breached the Commission approaches each matter on a case-by-case basis, taking into account all relevant circumstances. Compliance with the guideline is only one factor to be considered. This means that full compliance with

19 7 the guideline can help minimise the risk of breaching the law, but cannot provide businesses with a guarantee against litigation. The Guideline deals with the issue of communication via a debtor s representative with the following principle: A debtor is entitled to have another party represent them and/or advocate on their behalf when communicating with the collector. In turn, representatives must act reasonably, and the collector should be entitled to contact the debtor directly in appropriate circumstances. The Guideline to the principle states clearly that once the collector knows that a financial counsellor is representing the debtor, the collector should not communicate with the debtor directly. To this principle, it gives a number of exceptions. The only one of those exceptions, which would apply to the bank s agent in this matter, is where the agent had not received notification of the financial counsellor s appointment. The Guideline also deals with personal visits with the following principle: Where necessary a collector is entitled to communicate with the debtor by visiting in person. However, a collector should respect the debtor s own, and the household s privacy and security. Generally a collector should not use personal visits as the initial step in communicating with the debtor, and personal visits should not be used if other, less intrusive, means of communication are available and effective. The example set out beneath the principles states that: A collector should not visit a debtor in connection with the collection of any debt at any time or place known or which should be known to be substantially inconvenient to the debtor, without the prior consent of the debtor given directly to the collector. In this instance, the agent was aware of the accident that the disputant had been involved in, and that he was injured. There is no information to suggest that the agent made an appointment to visit, and the disputant says that it did not. I consider that the agent should have been aware that the visit would be substantially inconvenient for the disputant and should have made an appointment.

20 8 In my view, the agent acted contrary to the Guideline by ordering and arranging the field visit in May 2002, because it was, by that time, well aware of the appointment of the financial counsellor and the fact that the disputant was recuperating from injuries, making an unexpected visit substantially inconvenient. As such, I consider that the bank s agent did not adopt good banking practice in taking the steps that it did. However, acting contrary to the Guideline is not, of itself, a breach of any law. It is necessary to consider the actions of the agent and whether they amount to a breach of section 60 of the Trade Practices Act Section 60 provides: A corporation shall not use physical force or undue harassment or coercion in connection with the supply or possible supply of goods or services to a consumer or the payment for goods or services by a consumer. In order to breach the section, a corporation must engage in coercion or undue harassment. In ACCC v Maritime Union of Australia [2001] FCA 1549, Hill J described harassment as follows: The word harassment means persistent disturbance or torment. In the case of a person employed to recover money owing to others, it can extend to where there are frequent unwelcome approaches requesting payment of a debt. However, such unwelcome approaches would not constitute undue harassment, at least where the demands made are legitimate and reasonably made. On the other hand where the frequency, nature or content of such communications is such that they are calculated to intimidate or demoralise, tire out or exhaust a debtor, rather than merely to convey the demand for recovery, the conduct will constitute undue harassment Generally it can be said that a person will be harassed by another when the former is troubled repeatedly by the latter. The reasonableness of the conduct will be relevant to whether what is harassment constitutes undue harassment. Therefore, harassment will be undue and in breach of the Trade Practices Act if it is frequent and if calculated to demoralise, tire or exhaust a debtor.

21 9 In the present case, the bank s agent was aware that the disputant had appointed a financial counsellor to act for him. The agent was also aware that the disputant was recovering from an accident which saw him in hospital for 10 weeks and after that, on crutches and in a wheelchair. In a letter to this office dated 12 June 2002, the visit was described as follows: Mr B told me that on about the 30 th May, a man who identified himself as Richard who the bank had sent visited Mr B. Mr B said he was a very burley looking chap who would not have intimidated me in my younger days when I practised marshal (sic) arts, but anyway he turned out to be quiet (sic) nice came in and asked a lot of questions which did not bother me as I just told him the truth and that I would pay when times were brighter. The disputant s financial counsellor has provided further information about the visit by facsimile dated 2 September 2002, as follows: At the time of the visit Mr B was not long out of hospital. He could hardly walk and indeed even moving his leg.. caused him extreme pain. His leg at the time was also infected. His wife was not home so he felt he had no choice except to open the door himself when he had the unexpected visit. He let the chap in before waiting to find out who he was as it was cold. The cold caused more discomfort on his exposed leg and he was anxious to rest it again. He was very distressed due to pain this activity caused. He was then quiet (sic) disturbed and really confused; when the chap said the Bank had sent him he was still distressed by this uncalled for visit when I spoke to him a few days later. While it appears that the disputant was in pain and alone when the agent called without an appointment, I am not satisfied that the bank s actions amount to harassment. The visit appears to be the only instance of direct contact after appointment of the financial counsellor and I am not satisfied that it was calculated to demoralise, tire or exhaust the disputant. I do not consider that the visit constituted harassment as described by Hill J.

22 10 Nor do I consider that the actions of the agent amount to coercion, because there was no suggestion that any threat of force or compulsion was made, which are elements of coercion (ACCC v Maritime Union of Australia [2001] FCA 1549 per Hill J). The information provided suggests that the agent asked questions which did not bother the disputant, and then left. On the basis of this description, I am unable to conclude that the bank s agent engaged in behaviour which could be described as intimidation as there is no evidence of any threat by the field officer and the disputant appears not to have been intimidated in any way. Compensation for stress and inconvenience The disputant has claimed compensation for stress and inconvenience caused as a result of the visit by the field agent. The Ombudsman has the power to award compensation for loss or damage. Claims for non financial loss include claims for stress, inconvenience, anxiety and disappointment. It is only in limited circumstances that compensation is considered for stress, inconvenience, anxiety and disappointment. An award for such damage is unlikely to be substantial. The following matters are relevant to the assessment of a claim for non financial loss or damage. Disputant s Resilience In assessing whether an award may be made for such loss or damage, disputants are expected: 1. To be moderately robust in the way in which they deal with a problem; 2. To take responsibility for ensuring that their financial affairs are in order in the ordinary course of the transactions concerned; 3. To bear the ordinary and normal degree of inconvenience associated with correcting an unexpected problem; and 4. To take reasonable steps to minimise the inconvenience suffered.

23 11 Assessment of Claim Factors to be taken into account in assessing a claim for non financial loss may include: 1. The extent of actual physical inconvenience, including the length of time it persisted and its degree; 2. The extent to which the disputant used his/her time to rectify the situation; 3. The extent to which the disputant s expectation of enjoyment and peace of mind was interfered with for reasons beyond the disputant s control and as a result of the act or omission of the bank. Simple Inconvenience Claims for simple inconvenience are not sufficiently substantial to warrant compensation. It is clear from the notes made by the bank s agent that the disputant had recently been discharged from hospital after the hit and run accident. The disputant described the visit as unexpected (in that no appointment was made) and made when the disputant s wife was out. I accept that the visit, made at the time that it was, would have been difficult and confusing for the disputant, given his injuries and the fact that he had recently been discharged from hospital and had appointed a financial counsellor, whom he could reasonably expect to deal with the bank on his behalf. As such, I consider that the agent should have been aware that sending a field agent would, more likely than not, cause stress and inconvenience to the disputant. I am satisfied that the visit did cause stress and inconvenience, due to the difficulty in attending to the visit while recovering from injuries. In my view, it would be appropriate for the bank to compensate the disputant by paying him the amount of $500.

24 12 Finding In my view: 1. The bank s agent was aware of the appointment of the financial counsellor by 30 April 2002; 2. The agent arranged for a field officer to call at the disputant s home on 7 May 2002; 3. This action breached the Debt Collection Guidelines issued by the ACCC; 4. I am unable to conclude that the visit breached section 60 of the Trade Practices Act, as coercion or undue harassment; 5. I do not consider that the disputant was intimidated by the visit; 6. The visit by the field officer was both inconvenient and stressful to the disputant; 7. It would be appropriate for the bank to compensate the disputant for this stress and inconvenience by paying $500. Case Manager