Concerns raised over 'problematic culture' at Suncorp's debt collector
Diane and Scott Walker spent months fighting an insurance claim they likened to "bullying". (ABC News: John Gunn)
Debt collector ARMA Group spent months harassing and intimidating 81-year-old Diane Walker into paying an insurance claim she was not responsible for.
ARMA, acting on behalf of insurance giant Suncorp, ended the ordeal with an apology to Ms Walker and financial compensation for the distress caused, but only after months of legal threats and pressure to pay.
"They were rather bullying-type letters β¦ it's in the back of your mind all the time," Ms Walker said.
ARMA's website said its workflows are "AI-driven", boasting it takes the company "less than two minutes to set up a smart payment plan and no manual intervention is required".
Ms Walker's case is just the tip of the iceberg, as the consumer watchdog takes ARMA Group and Force Legal, both owned by Credit Clear Limited, to court, alleging that between them they sent 320,000 debt enforcement notices to individuals that were allegedly misleading.
Former ACCC chair Allan Fels says he is "very concerned" about the conduct of debt collector ARMA Group. (ABC News: Patrick Rocca)
Legal experts are appalled and say it's a clear breach of Australian consumer laws.
"This is Robodebt 2.0 of the worst form," said Allan Fels, former chair of the Australian Competition and Consumer Commission (ACCC).
"I'm very concerned β¦ this seems to be the worst kind of illegal, deceptive conduct, applied to bully, intimidate, frighten.
"It's traumatic for the individual to be confronted in a Robodebt situation with no opportunity to respond or fight back, or talk to someone, or explain their personal circumstances.
"There needs to be a serious, substantial crackdown on this kind of approach."
Just before Christmas, Ms Walker was involved in a minor two-vehicle car crash she was not responsible for, and that caused no damage.
Diane Walker was sent multiple legal threats for a car insurance claim she was never liable for.Β (ABC News: John Gunn)
The other driver's insurer, AAMI, a subsidiary of Suncorp, contacted Ms Walker looking to recover costs, despite having no evidence.
"I would have emailed them at least half a dozen times saying, 'Send me some photos, send me something that demonstrates that at least something happened,'" said Scott Walker, who stepped in as his mother's representative on the claim.
About two months after AAMI first contacted Ms Walker, it engaged its debt collector, ARMA Group, to recover the funds.
Without providing evidence, the debt collector concluded that Ms Walker was "liable".
Previously a freelance camera operator for the ABC, Mr Walker said he spent hundreds of hours trying to make sense of ARMA's communication.
"It was just this level of intimidation β¦ the wording sounded very much like there's been some legal decision made, some type of independent, judicial system that has found an outcome," he said.
Ms Walker and her son said ARMA's letters were relentless.
Despite initially telling Ms Walker she had been found "liable" for the car accident, ARMA began threatening court action, suggesting culpability remained unresolved.
One letter said: "If you choose to dispute the issue with arguments that are not relevant β such as claiming there is no dashcam footage or no photos of the vehicles at the moment of impact β we will have no choice but to escalate the matter further.
"You are welcome to present those arguments in court if you believe they support your case. If you are found liable, you would be liable for court fees as well."
ARMA Group was initially claiming $1,175.51 from Ms Walker.
But after three months, the company increased the amount to $1,395.51 without explanation.
Mr Walker was then sent a separate claim, arguing he was now responsible for the accident, even though he wasn't there at the time.
Scott Walker says he spent hundreds of hours on the insurance claim before receiving an apology.Β (ABC News: John Gunn)
"The system's not designed to have a sensible conversation with someone at the other end; it's a system that is designed to make you pay," Mr Walker said.
ARMA Group and Suncorp did not respond to questions from ABC News.
The number of Australians with debt is rising sharply, with contact to the National Debt Help Line increasing by nearly 12 per cent in the year to August.
The chief executive of the Consumer Action Law Centre Stephanie Tonkin said Ms Walker's case represents a larger problem.
Stephanie Tonkin, from the Consumer Action Law Centre, says ARMA Group's conduct is illegal.Β (ABC News: Simon Winter)
"Over many years, we've seen really poor conduct by debt collection companies and individual agents as well," she said.
"What Diane's case signals to me is that there is a very problematic culture at ARMA that runs deep into the organisation.
"What these proceedings [against ARMA and Force Legal] by the ACCC show is that at the heart of the problem are the lawyers at ARMA," Ms Tonkin said.
She is concerned automation has been used with little or no oversight.
"I am really worried about the future of this industry, and the lack of consumer-centred design and the lack of safeguards that businesses are putting in to ensure that consumers aren't harmed."
After months of back and forth, Mr Walker contacted Suncorp executives, who in June dropped the claim due to a lack of evidence and admitted the company engaged its debt recovery partner "prematurely".
The debt collector ARMA Group sent several threatening legal letters to Diane and Scott Walker that had no merit.Β (ABC News: John Gunn)
Suncorp apologised to Ms Walker and compensated her with a $1,500 goodwill fee.
It also told her that ARMA had acknowledged the matter was not handled appropriately.
In contrast, ARMA said it found Mr Walker's claims "unsubstantiated" and was "comfortable with how this matter was handled".
While Suncorp confirmed "formal disciplinary action" was taken with ARMA Group, it also said the relationship would continue "under our usual arrangements".
"I just find that extraordinary, and it's quite insulting," Mr Walker said.
Without her son's support, Ms Walker admitted the process would have looked very different.
