Old debts

The TIO regularly receives complaints about companies pursuing old debts, sometimes years after the original invoice was issued.

TIO's jurisdiction

Time limit

To determine whether a complaint about an old debt is within the TIO's jurisdiction, the TIO establishes when the customer first became aware of the event relating to the debt, e.g. when the customer became aware that a debt existed or that their provider had not adhered to a previous agreement about the debt. This event is to be distinguished from the age of the debt itself.

If the customer became aware of this event less than 2 years previously, the matter would fall within the TIO's jurisdictional time limit. If the customer became aware of this event more than 2 years previously, the matter would not fall within the TIO's jurisdiction. This is because the TIO's Constitution does not allow the TIO to investigate complaints which arose from events that became known to a customer more than 2 years previously.

Sold or factored debt

The TIO has jurisdiction to investigate complaints about old debts even where the debt has been sold or "factored" to another company that is not a member of the TIO.

How the TIO handles complaints about old debts

When considering complaints about old debts, the TIO has regard to the relevant State or Territory limitations legislation.

• The TIO will expect a provider to waive a debt where it is established on investigation that a provider has attempted to recover a debt outside the applicable limitation period, as the debt is not legally recoverable.
  
  
• Where a provider pursues debts within a limitations period, the TIO will consider the merits of each complaint on a case-by-case basis.
  

  However, in all such cases the TIO would expect a provider to supply the complainant with an itemised account before it could expect payment. Where a provider cannot supply an itemised account, the TIO will expect the provider to waive the debt.

Refusal to provide service

The TIO may investigate allegations that a service provider has refused to provide a service or offered only a limited service because of an old debt, where the complainant claims that they paid the debt in question.

The TIO will also consider the reasonableness of a provider withholding a service in circumstances where it may be difficult for a complainant to recall or prove that payment was made, and/or where evidence has been lost or discarded.

Updated: 5 September 2006