Debt Collection Giant Cleared in Technicality Court Battle
In a significant legal development, criminal charges brought against one of Australia's major debt collection firms, Panthera Finance, have been formally dismissed by a Melbourne court. The Melbourne Magistrates' Court ruled that the company was not technically engaged in debt collection as defined by law, leading to the case's collapse.
Magistrate Michelle Hodgson presided over the committal hearing on Tuesday, where she dismissed the charges and took the additional step of ordering the regulator, Consumer Affairs Victoria, to pay costs. The exact amount to be paid is yet to be determined.
The Legal Loophole That Ended the Prosecution
The case against Panthera Finance stemmed from a 2020 Federal Court ruling which found the company had unduly harassed three consumers and subsequently fined it $500,000. Consumer Affairs Victoria argued that this prior ruling made Panthera a "prohibited person" under the state's debt collection legislation, prompting the criminal proceedings.
However, the defence mounted by Panthera proved successful. The company's legal counsel argued that the prosecution had failed to provide any evidence that the debts being collected were "owed to another person." This point was critical because the definition of a debt collector under section 3 of the Australian Consumer Law and Fair Trading Act specifically refers to collecting debts "owed to another person."
Since Panthera had acquired and now owned the debts itself, it contended it was collecting on its own behalf, not for a third party. Magistrate Hodgson agreed, stating she was bound by the strict definition within the act and could not expand upon it. "Parliament has used a definition based on who the debt is owed to," she noted in her ruling.
Corporate Changes and Future Promises
The legal victory comes after a period of significant change for the company. Panthera Finance was bought by the Francom Group in December 2024 after being placed into administration by its financial backers, Brookfield. It is important to note that the Francom Group itself was not accused of any wrongdoing in these proceedings.
Following the court's decision, Georgina Antoun, Chief Executive of the Francom Group, welcomed the outcome. She stated that the ruling provided certainty for "our customers, clients and employees." Antoun also expressed a commitment to reforming the industry's image, saying, "Francom is determined to see through its desire to transform the perceptions of the debt collection industry." She added that the company is passionate about supporting vulnerable customers and educating its team.
This case highlights the complex interplay between corporate structure, legal definitions, and consumer protection, setting a notable precedent for the debt collection sector in Australia.
