Private debt collection agencies ‘clean up’ with Centrelink overpayments

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Two external debt collection agencies received over $13 million in commissions for recovering Centrelink debts last financial year. The debt recovery bonanza follows a previous Audit office investigation which found private debt collection agencies recovered 10 per cent of Centrelink debts, but were the subject of more than a quarter of all complaints about debt recovery practices.

Centrelink contracts private debt collection companies to recover debts owed to Centrelink where a person has income other than, or in addition to, social security or Family Assistance payments. The agents must adhere to Centrelink’s “Collection Guidelines”, and must provide a person with the opportunity to negotiate affordable repayment arrangements.

Private debt collection agencies recovered $124.8 million last financial year. Currently, there are two organisations who have contracts with the Department of Human Services to recover overpayments.

Dun & Bradstreet and Recoveries Mercantile recovered nearly 10 per cent of all debts last financial year. DHS recovered $1,141.24 million of the total debt of $1,2666.08 million in 2013-14.

The two private agencies have a combined client base in excess of 68,000 in 2013-14, with over $238 million currently under management.

The collection agencies collect hefty commissions from the monies that are collected on behalf of the Department of Human Services. Combined, they received in excess of $13.7 million last year.

The debt collection business is an area which is renowned for high levels of dissatisfaction, with high levels of complaint. Last year, 201 complaints were lodged about the practices and behaviour of the private debt collection agencies.

A 2013 report by the Australian National Audit Office found that external debt collection agencies accounted for 27 per cent of complaints about debt recovery.

If no agreement is reached regarding the repayment of the debt, or if the person is not satisfied with the handling of their debt, then a person may ask Centrelink to collect the debt directly, rather than through the private debt collecting company.

Collection Agency

Amount Recovered

($ million)

Proportion of Total Debt Recovered

Commissions Received

Number of clients & debts

Dun & Bradstreet




33,226 / 50,341

Recoveries Corporation




35,136 / 53,671

DHS Recovered










External Debt Collection Agencies: Answers to Questions on Notice, Senate Estimates, Department of Human Services, HS 157, December 2014.