It starts with a barrage of text messages telling you to urgently call a number. Then the persistent phone calls, sometimes more than ten a day.
Then come the letters telling you to pay “immediately” or risk “further recovery action”, including taking the money directly from your wages or bank account, or seizing your assets.
These mysterious antagonists are the debt collection companies paid millions by Centrelink to wage campaigns of harassment against unsuspecting Australians.
The agency employs three private firms to recover money from people it believes have been overpaid benefits and failed to repay the outstanding amount: Dun & Bradstreet, on a $10.9 million contract, and Probe Group and Australian Receivables, both on $2.6 million contracts.
Many have questions around the practices of these taxpayer-funded debt collection agencies.
Student Stephan Horn worked for Probe Group part-time through an employment agency. He was told he would be “warn calling” existing clients to recover debts.
“However in about 90 per cent of the calls I would either receive or make (the person) had no idea they had an existing debt with Centrelink, let alone receiving any official notification about a debt that was incurred,” he told news.com.au. “I put through my concerns with the Probe Group management, their advice was less than convincing.”
He was told the information came from Centrelink and the advice was to recover the money using standard methods — “an aggressive campaign involving texting the client, sending letters and contact over the mobile or home phone until payment has been made or until the client would make an agreement.”
In his training, he was told there was a termination period after which the debt could no longer be pursued: three years in the Northern Territory and five years everywhere else.
“When I put this question to the Probe Group management, that most people did not have any dealings with Centrelink for more than five years, they suggested I was not enjoying the role and advised I should leave the job.”
The Department of Human Services has admitted there was a problem with it having the wrong addresses for people in its heavily criticised “robo debt” automated system, and consequently failing to notify them before debt collection agencies started chasing the money. It has since changed the system so the first letter must be sent by registered mail.
Now it appears the systemic problems with alleged Centrelink overpayment and collection agencies extend well beyond the new online debt recovery system, since family payments are not part of that process.
The debt collection firms don’t seem to have the issues that Centrelink seems to have in struggling to find people. Some said the companies would call at night.
Even 7.30 presenter Leigh Sales recently took to Twitter to complain about the difficulty of contacting Centrelink. Yet the Government continues to deny there is even an issue.
Some have questioned whether the debt recovery agencies, which cost $15 million in contracts, are recouping more money than they are paid, or simply intimidating the most vulnerable Australians.
The Department of Human Services has not confirmed how much in real overpayments the automated debt recovery system has identified. It had claimed the “robo debt” system had recovered $300 million in benefits overpayments, but this figure is simply the amount of it has demanded back in the letters — much of which is disputed.
Centrelink staff told news.com.au the majority of claims they had seen were wrong, with one compliance expert putting the inaccuracies at 90 per cent. The error rate remains unknown.
Between 2010-13, the system had human oversight and 860,000 people were found to have discrepancies in their accounts, with an average debt value of $1400 per person — $1.2 billion over three years.
Shadow Minister for Human Services Linda Burney told news.com.au: “Centrelink is at breaking point. The system was already straining under demand and with the addition of so many flawed debt notices being sent out the staff are struggling under unprecedented pressure. It is frankly ridiculous that months after this issue was raised the government won’t admit they made a mistake.
“From the administration of the robo-debt program to their protracted bargaining process — the Department of Human Services is a mess and that responsibility lies at the feet of the Government and the Minister responsible.”
Is robo-debt really an improvement?