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The ����ԭ�� is taking legal action against two related companies that between them sent more than 320,000 debt enforcement notices which were allegedly misleading and in breach of the Australian Consumer Law.

The ����ԭ�� has commenced Federal Court proceedings against debt-collection agency ARMA Group Holdings Pty Ltd (ARMA), and legal practice, Force Legal Pty Ltd (Force Legal), which are both owned by Credit Clear Limited (ASX: CCR).

It is alleged that ARMA and Force Legal made misleading representations when sending at least 320,000 notices to consumers by email, letter or text message over more than three and a half years about debts they allegedly owed.

The ����ԭ�� alleges that the notices from ARMA represented to affected consumers they had a debt that was due and required payment, when in fact the debt was either no longer outstanding or was past the statutory limitation period (statute-barred). It is also alleged that Force Legal sent letters containing misrepresentations about the steps it would take to escalate matters and the potential consequences of non-payment.

“ARMA and Force Legal’s allegedly misleading debt enforcement notices had the potential to cause extreme emotional and financial stress and concern to thousands of people, many of whom were likely experiencing vulnerabilities,” ����ԭ�� Deputy Chair Catriona Lowe said.

“We are concerned that the letters and emails which warned consumers of serious and imminent consequences of failing to pay a debt likely led some consumers to make payments they were not legally required to make. We are asking the court to order compensation for these consumers.”

The ����ԭ�� alleges that ARMA used multiple digital platforms to facilitate its debt collection activities, which relied on pre-loaded template communications that were issued to consumers through semi-automated processes.

“Companies that do not address features or deficiencies in their systems, processes and procedures which lead to breaches of the law and consumer harm should be in no doubt that they will face serious consequences,” Ms Lowe said.

ARMA and Force Legal were enforcing debts for many well-known private and public companies, including gyms, energy and telecommunications companies, education providers, health and medical providers, funeral providers, a streaming service, and a transport provider.

The ����ԭ�� is not alleging that ARMA’s clients breached Australian Consumer Law, or were complicit in, or aware of, the conduct.

The ����ԭ�� started investigating ARMA and Force Legal after receiving complaints from more than 400 customers.

The ����ԭ�� is seeking pecuniary penalties, declarations, injunctions, consumer compensation and other orders.

Information to assist consumers who are in debt, are being contacted by debt collectors, or are seeking to dispute a debt is available on the ����ԭ�� website.

Detailed allegations and examples

The ����ԭ�� alleges that between 6 February 2022 and 26 September 2025, ARMA engaged in misleading conduct and made false or misleading representations by sending at least 16,000 letters, emails and text messages to consumers. These communications represented that a debt was owing and/or required payment, when the consumer no longer owed a debt, or the debt was statute-barred.

The ����ԭ�� also alleges that, during the same period, Force Legal engaged in misleading conduct and/or made false or misleading representations by sending at least 320,000 letters and emails to consumers that misleadingly conveyed, for example, that:

• Force Legal was instructed to start legal action to enforce the debt, when in fact Force Legal had never received such instructions from any of ARMA’s clients;
• Force Legal was independent of ARMA, when in fact Force Legal was a related body corporate and akin to ARMA’s in-house legal arm;
• consumers might have payments deducted from their pay without a court hearing, when in fact this could only occur if and when a Court granted such an order; and/or
• consumers would have to pay all legal costs and interest, when in fact there is no automatic entitlement to recover such costs in any Australian jurisdiction other than Western Australia.

The ����ԭ�� also alleges ARMA was knowingly concerned in some of Force Legal’s alleged breaches of the law, and that it was actually ARMA employees who arranged for letters on Force Legal’s letterhead to be sent to consumers.

“The alleged involvement of legal practitioners in developing the allegedly misleading communications to debtors and facilitating the concerning practices between ARMA and Force Legal is a particularly troubling aspect of the conduct which is at the centre of the ����ԭ��’s case,” Ms Lowe said.

Example message from ARMA

• “Your [Creditor] account is severely overdue. Immediate payment of $[Debt Amount] is required to avoid further escalation. If payment or contact is not received within seven (7) days our client [Creditor] reserves the right to take all action necessary to recover payment. Failure to resolve this matter may result in a credit default. Legal action may also commence, which would result in you incurring additional legal fees and interest charges.”

Example of an enforcement letter sent by ARMA

Example message from Force Legal

• “This is your final notice before we [Force Legal] receive instructions from [Creditor] to proceed with legal action to recover the debt claimed.”

Example of an enforcement letter sent by Force Legal

Background

ARMA Group Holdings Pty Ltd is a well-established debt collection service provider that collects debts as a service on behalf of its creditor clients for fees and commission. This case is focused on ARMA’s business-to-consumer debt collection activities.

Force Legal Pty Ltd is a legal practice registered in NSW that provides legal services to ARMA in relation to ARMA’s debt collection service. As part of ARMA’s debt collection process, if an alleged debt remains unpaid after correspondence sent by ARMA, the debt may be escalated so that consumers are sent a letter of demand with a Force Legal letterhead.

Credit Clear Limited is the ultimate holding company for several debt collection entities, including ARMA, as well as legal services providers, such as Force Legal.

Note to editors

The ����ԭ�� and ASIC enforce Commonwealth consumer protection laws, including laws relevant to debt collection.

In 2020, the ����ԭ�� updated the ����ԭ�� and ASIC’s joint Debt Collection Guideline for Collectors and Creditors, which aims to assist creditors, collectors and debtors to understand their rights and obligations, and ensure that debt collection activity is undertaken in a way that is consistent with consumer protection laws.

As part of a compliance campaign, the ����ԭ�� also engaged with stakeholders, creditors and debt collectors and put debt collection agencies on notice about their obligations to comply with consumer protection laws.

In December 2018, the Federal Court ordered ACM Group to pay $750,000 in penalties for ACM’s misleading, harassing, coercive and unconscionable pursuit of unpaid debts from two vulnerable consumers.

In July 2019, the ����ԭ�� took court action against Panthera Finance and ACM Group.

In March 2020, the Federal Court ordered Panthera Finance to pay $500,000 in penalties for unduly harassing three consumers over debts they did not owe and for misleading one of the three consumers.

The maximum penalty for each breach of the Australian Consumer Law increased on 10 November 2022, part way through the period of the alleged conduct. For contraventions from 10 November 2022, the maximum penalty is the greater of:

• $50,000,000
• if the Court can determine the value of the 'reasonably attributable' benefit obtained, three times that value, or
• if the Court cannot determine the value of the ‘reasonably attributable’ benefit, 30 per cent of the corporation's adjusted turnover during the breach turnover period for the contravention.

Consumers affected by similar conduct are encouraged to seek assistance from one of the agencies listed on the ����ԭ�� website.

Concise statement

This document contains the ����ԭ��’s initiating court documents in relation to this matter. We will not be uploading further documents in the event these initial documents are subsequently amended.

����ԭ�� v ARMA and Force Legal Concise Statement ( PDF 1.23 MB )