Fraudulent claims by Bank’s lawyers using the mail service demanding payments of unsubstantiated outstanding loan account balances… It’s likely they’re committing fraud.

By the way, none of this is legal advice. Do your own research. Read the fine print.

Who’d imagine Aussie and Kiwi banking groups doing this?

Gadding about engaging external lawyers to do their dirty work?
(“Gadding” is a colloquial term that means to go about aimlessly or to wander from place to place, typically without any clear purpose… Except in this case, to line their own pockets.)

Here’s some of the issues, including fraud and other potential law violations in Australia:

Fraudulent Misrepresentation (Criminal Code Act 1995)

Criminal Code Act 1995 (Cth): fraud occurs when a person intentionally deceives another for the purpose of obtaining a benefit or causing harm.

Section 134.1 – Fraud by Deception: Lawyers making false or misleading representations. Such as claiming an unsubstantiated loan balance is outstanding, without proof. And doing so with the intent to deceive you (the victim).

  • Could this be considered fraud? For fraud to occur, the lawyers would need to be knowingly or recklessly misrepresenting the loan balance.
  • Or making threats without evidence to back up their claims.
  • Threatening to take legal action based on unsubstantiated claims of an outstanding debt.
  • It’s a fraudulent claim (misrepresentation) if done with the intent to intimidate or pressure you into paying money that’s not actually owed.

Misleading or Deceptive Conduct

(Australian Consumer Law – Competition and Consumer Act 2010)

Are the lawyers making false or misleading statements in the course of their demands and threats?… Even though they’re acting on behalf the bank, they may be violating the Australian Consumer Law (ACL).

Section 18 – Misleading or Deceptive Conduct: If the lawyers’ written communication is misleading or deceptive. E.g., falsely claiming that a loan is outstanding or threatening legal action without a valid basis.

Section 29 – False or Misleading Representations: If the lawyers are making false claims about the existence or amount of the debt, they may be violating this provision of the ACL. ACL criminalises making false representations about the existence or value of debts.

Section 30 – Unconscionable Conduct: Are the lawyers using unfair or highly aggressive tactics? (Such as threats of legal action, garnishment of wages, or repossession). If these actions exploit your emotions, it could be considered unconscionable conduct under the ACL. And ACL may also apply to unethical or deceptive actions.

Extortion

(Criminal Code Act 1995)

Do the lawyers’ demands go beyond fraudulent misrepresentation and involve threats of serious harm? … Such as the threat of physical violence, reputational damage, or legal consequences…

In exchange for money, this could rise to the level of extortion

Section 93.1 – Extortion: Extortion occurs when someone threatens to harm another person in some way unless the victim provides money, property, or some benefit. If the lawyers are threatening legal action based on a non-existent debt, this could potentially be seen as extortion. This depends on whether the threat of legal action is made illegally or unethically, such as through coercion or intimidation.

False or Fictitious Debt Collection

Debt collectors and lawyers must follow strict regulations when demanding payment of debts.

Firstly, they have to prove the debt exists. Not you.

If they’re making false claims about the amount of money owed or the existence of the debt, they could be violating debt collection laws.

Debt Collection Practices: Lawyers and debt collectors are required to operate in good faith when collecting debts. They are not to mislead consumers:

  • about the amount owed,
  • fabricating outstanding loan balances, or
  • engaging in aggressive threats without legal grounds

These actions could be a breach of fair debt collection practices.

They would also violate Aussie consumer protection laws, including the National Consumer Credit Protection Act 2009.

Possible Consequences of Fraudulent or Deceptive Debt Collection

If the lawyers are engaging in fraudulent conduct, consequences could include:

  • Criminal Charges: Do their actions constitute fraud, extortion, or other criminal offenses? They could face prosecution under the Criminal Code.
  • Civil Liability: Could you sue them for damages if it’s a false debt claim? This includes costs incurred in defending against the threats, and any reputational damage caused by the wrongful debt claim.
  • Disciplinary Action: Lawyers who engage in fraudulent or unethical conduct could face disciplinary action by their professional body. E.g Legal Services Commission (LSC) or the Law Society in their state or territory. This could include suspension or disbarment from practicing law.
  • Regulatory Action: The Australian Competition and Consumer Commission (ACCC) or other regulatory bodies could intervene if the lawyers’ conduct violates the Australian Consumer Law, which protects consumers from misleading or unfair practices.

What Action Do You Take?

When receiving a letter from external lawyers making unsubstantiated demands or threats of legal action based on fraudulent claims, a non-existent loan, some people may consider the following steps:

  • Request Documentation: Ask for clear evidence of the debt, such as a statement of account or proof of the loan agreement.
  • Consult a Lawyer: A victim of fraudulent debt collection should consult with a lawyer or consumer protection agency. You should assess whether the demands and threats are legitimate. Or if legal action should be taken against the bank or their lawyers.
  • Report to Regulatory Bodies: Victims can report the lawyers’ conduct to the ACCC, LSC, or the Australian Financial Complaints Authority (AFCA) if the conduct involves unethical debt collection practices.

Conclusion
As soon as external lawyers send demands and threats through the mail, admit nothing. Ask them for proof of their claims.

  • Are these fraudulent claims, demanding repayment of unsubstantiated “outstanding loan account balances”, using threats to extort money?
  • And are they potentially committing fraud, with misleading or deceptive conduct, and extortion?

These actions may violate both criminal law and consumer protection law in Australia.

Let’s face the facts. These lawyers want to stick their noses in other people’s business, for their own personal gain.

Challenge them to prove their fraudulent claims.

Tell them to back off. Or report the lawyers to regulatory bodies. Or pursue civil litigation for damages.

By the way, none of this is legal advice. Do your own research. Read the fine print.