Centrelink is using debt collectors like never before and making snap decisions based on “limited information” since the introduction of a new automated debt recovery system, Victoria Legal Aid has said.
Collectors have been used by the government agency before but never based on such an “inaccurate and blunt” system, Civil Justice, Access and Equity executive director Dan Nicholson said.
The Courier has sighted a letter from Sydney-based debt collector Dun and Bradstreet which threatens legal action or the docking of wages or tax refunds if the debt remains outstanding.
“Although debt collectors have been used to collect Centrelink debts previously, what is different now is that initial decisions are being made quickly and on limited information, meaning that for some people the first they hear of the problem is from a private debt collector,” Mr Nicholson said.
Legal Aid has called on the government to immediately suspend the automated system, which is being criticised for distorting people’s incomes and generating false debts.
“This blunt and inaccurate system of data-matching is affecting people in every community of Australia, including Ballarat.”