Need Help With Debt?
If you’re struggling with debt, debt collectors, or debt collection agencies, Kiwis For Good is here to help. We’ve created a straightforward, easy-to-follow guide to help you regain control of your financial situation.
Why This Matters
With rising interest rates and the soaring cost of living, many Kiwis find themselves unable to cover basic expenses. The constant pressure from threatening letters and phone calls by debt collectors can take a heavy toll on mental health. This is why we feel it’s so important to share this life-changing information with you.
What Should You Do if You Receive a Letter Saying You Owe Money?
It’s not uncommon to receive calls, emails, or even visits from people claiming you owe them money. Often, these are individuals or companies you’ve never dealt with. Many of us, confused and stressed, engage with these claims without question. Unfortunately, this often leads to people paying money they don’t legally owe, just to make the harassment stop.
The first step if you are contacted by a debt collector is to ask for proof of the debt. Always remain polite but firm. Make it clear that you need clarification or evidence before proceeding further.
Types of People Who May Contact You
Debt claims typically come from two types of entities: Debt Collectors and Debt Buyers. Knowing the difference is key to understanding your rights.
Debt Collectors
A Debt Collector is someone hired to collect a debt on behalf of another person or company. They make money by recovering debts for their clients and will contact you via phone, email, text, or even in person. These entities are third-party intermediaries, meaning they do not own the debt themselves.
Because you have no contract with a Debt Collector, you are not legally obligated to engage with them. Always ask whom they are collecting on behalf of and contact the original creditor directly if necessary.
If contacted by a Debt Collector for a debt you don’t recognise, use our template letter to request proof of the debt.
Pro Tip: It’s not always obvious whether you’re dealing with a Debt Collector or a Debt Buyer. Always ask for clarification—are they acting as an agent for another company (Debt Collector) or claiming ownership of the debt (Debt Buyer)?
Debt Buyers
A Debt Buyer is a person or company that purchases debts, often for a fraction of their original value, and then attempts to collect the full amount from you. Debt Buyers may appear similar to Debt Collectors but differ because they own the debt outright.
For example, a Debt Buyer may purchase a $1,000 debt for as little as $10 to $120 and then try to recover the full amount. These entities are particularly persistent because their profits depend entirely on recovering these amounts.
What to Do:
- Always request clarification from the Debt Buyer.
- Use the Three-Letter Process we’ve developed to challenge their claim.
Most Debt Buyers lack the proper documentation to prove their claims because they purchase old, written-off debts. This is why their practices often appear questionable—and why you have a strong chance of disputing their claims successfully.
Protect Yourself from Their Tactics
Debt Buyers are known for using aggressive and manipulative tactics to pressure you into paying, even when their claims are invalid. Remember:
- You are not required to engage with them over the phone or in person.
- Insist that all communication is in writing and keep copies of everything.
The Three-Letter Process
Our Three-Letter Process is a proven method for disputing debt claims effectively. Follow these steps:
- Letter 01: Request proof of the debt.
- Letter 02: Challenge an inadequate response.
- Letter 03: Final notice if they fail to provide evidence.
Each letter should be sent by recorded delivery to ensure proof of postage. Keep all copies and related documentation in a safe place. Letters should be sent 14 days apart to give the other party reasonable time to respond.
Understanding the Bigger Picture
This dodgy practice isn’t limited to New Zealand; it’s a global issue. Visiting Assistant Professor Peter A. Holland of Maryland University has written extensively on the topic of Junk Debt Buying. You can read his insightful work here.
Get Support
If you want more information or need additional support:
- Join our Facebook Group here.
- Call us on 0508 FOR KIWIS.
- Email us at hello@kiwisforgood.co.nz
Remember, you are not alone, and you do not have to face these challenges without support. Together, we can take a stand against predatory practices and help you regain control of your financial future.
