Commercial agent licensing and field agent rules in NSW
Understand my roles and responsibilities as a commercial agent in NSW.
Regulation of commercial agents
NSW Fair Trading is responsible for the regulation of the commercial agent industry.
What commercial agents do
Commercial agents act on behalf of a client to collect debts, repossess goods and serve legal documents (known as ‘process serving’) to others.
Debt collection
Debt collection involves finding an individual and requesting, demanding or collecting money from them to ensure they pay a debt owed to another person or company.
For example, a bank may engage a commercial agent to retrieve an outstanding payment from one of its customers.
Repossession of goods
Repossession of goods involves finding, demanding or seizing goods held by an individual, on behalf of another person or company.
For example, if a person has failed to make payments on a car they financed and the car is used as security for the loan, a commercial agent may be engaged to seize the car to recover the debt.
Process serving
Process serving means serving legal process to a person on behalf of a client. This relates to legal proceedings involving both the client and the other person.
For example, a commercial agent may serve a court summons to an individual on behalf of a client.
Licensing
If you have face-to-face contact with customers when performing your work as a commercial agent, you need a commercial agent licence. These types of commercial agents are called field agents.
Field agents approach a person and/or visit the place they live, work, own or attend to collect debts, repossess goods or serve legal documents.
You also need a commercial agent licence if you employ field agents.
Commercial agents who are not field agents, and do not employ field agents, do not need to hold a licence. However, they must not be disqualified and must comply with the commercial agent rules.
It’s an offence for commercial agents to carry out field activity without a licence. The maximum penalties are:
- $22,000 fine or 12 months imprisonment or both, for an individual, or
- $110,000 fine for a corporation.
Disqualification
A person or corporation is a disqualified person for the purposes of undertaking commercial agent work if:
- they are a person under 18 years of age
- they are an undischarged bankrupt, or is taking advantage of bankruptcy laws
- they are a corporation subject of a winding-up order (with limited exceptions)
- they are a person convicted of a relevant offence within the last 5 years, and been sentenced to imprisonment or received a fine of $5,000 or more
- they are subject to an exclusion order
- the person is a controlled member of a declared organisation.
Relevant offences are listed in the Fair Trading Act 1987 (the Act). They include offences involving:
- violence,
- weapons
- fraud
- drugs, and
- dishonesty.
Penalties apply for carrying out commercial agent activity while disqualified. The maximum penalties under the Act are:
- $22,000 fine for an individual or 12 months imprisonment or both, or
- $110,000 fine for a corporation.
Commercial agent rules
All commercial agents must adhere to the commercial agent rules, which establish standards of conduct for the industry. Penalties apply if the rules are not complied with. The rules are to protect consumers from harmful or inappropriate behaviour. While commercial agents should familiarise themselves with the full rules available in the Regulation, a general summary is provided below.
Commercial agents must:
- have appropriate knowledge and understanding of the Act and Fair Trading Regulations, and other relevant laws, as they concern commercial agent activities
- act in accordance with client instructions
- not act for any person where to do so would result in a conflict between the commercial agent’s and client’s interests
- take reasonable steps to ensure employees comply with any orders issued by the NSW Fair Trading Commissioner
- not use, or threaten to use, physical force or violence
- not enter a private dwelling without consent
- not use coercive, intimidating or unconscionable conduct
- not carry out debt collection where the debt cannot be the subject of demand
- provide evidence of the debt when requested by the person liable for the debt
- not contact a person outside of reasonable hours or by a method that the person has requested the commercial agent not use when carrying out debt collection unless the commercial agent has exhausted all other contact methods
- not misinform, mislead or deceive a person while carrying out commercial agent activity
- not demand or collect payment for the cost of the commercial agent activity from a person who is the subject of that activity. If the commercial agent activity is debt collection, this rule does not limit a creditor who has a right at law to recover their debt recovery costs.
- not disclose to a third party that the consumer is subject to commercial agent activity, unless with the consent of the person who is subject to the debt or as reasonably necessary to carrying out commercial agent activity, or with another lawful excuse
- comply with trust accounting obligations
- keep trust account records in accordance with the rules
- comply with obligations surrounding unclaimed trust money
- not employ or engage disqualified persons
- notify the NSW Fair Trading Commissioner within 7 days of becoming aware that a person employed or engaged to carry out commercial activity is a disqualified person
- take all reasonable steps to resolve a complaint.
If you breach the commercial agent rules, you may be guilty of an offence and can be penalised.
If you are an employer of commercial agents, you can be fined up to $11,000 if you fail to ensure your employees follow the commercial agent rules.
The maximum penalty under the Act is:
- $5,500 fine for an individual, or
- $11,000 fine for a corporation.
Breaching the commercial agent rules may also result in the agent being issued with a restriction or exclusion order. Contravening an exclusion order or a restriction order is an offence, and may lead to a penalty.
The maximum penalty is a:
- $22,000 fine or 12 months imprisonment, or both, for an individual, or
- $110,000 fine for a corporation.
Accounting and record keeping
You must deposit all money received from commercial agent activity into an account with an authorised deposit-taking institution. That account must be opened and held by you as the agent for that purpose. Specific requirements also apply where money is held on trust (see below).
You must retain full records of all account transactions connected to commercial agent activity. The records can be held in hard copy or electronic form and must be kept for at least 3 years from the date on which they were created.
Trust accounts
If a client instructs you to hold money on trust, you must pay the money into a separate account that has been opened and held for that purpose.
You must follow a client’s instructions to pay the person the money was held for.
For trust accounts, you must also maintain a chronological record of changes to the name and address of the person who the money is held for, their code reference number and the trust account number.
Unclaimed trust money
If money has been held for more than 2 years in a trust account, you must make reasonable efforts to identify and locate the owner of the unclaimed money and ensure the unclaimed money is paid to the owner.