Services Australia handed over $5.6 million in extra work to robodebt collector Panthera following ACCC lawsuits

A controversial debt collection firm that won major government contracts under the illegal robodebt scheme despite being sued and fined for impermissible conduct on tactics in other markets has secured two more lucrative contract renewals from Services Australia before the federal elections.

ARL Collect, a wholly-owned subsidiary of private debt collection company Panthera Finance Group, secured new contracts from Services Australia totaling $3.96 million in August 2021, according to official contract notifications, more than doubling of his previous contract of $1.65 million for the 12 months until June 30, 2021.

The 2021 deals, for debt collection services, were in addition to the $3.3 million awarded to ARL Collect in July 2019, about four months before the government threw in the towel to admit its automated collection practices. debt creation at Service Australia were not legal in November 2019.

The three Services Australia contracts combined are worth a total of $8.91 million, with the latter two certainly raising questions about how a company that had been sued and admitted to harassing consumers and destroying their credit records was assigned more work by Services. Australia.

In its successful 2019 lawsuit against Panthera (the owner of ARL Collect), the Australian Competition and Consumer Commission alleged that in the case of one victim, “Panthera used coercion, made false statements and engaged in impermissible conduct in his dealings with the consumer, even though he knew the consumer urgently needed an incorrect credit default listing removed to obtain financing for a new car.

In March 2020, Panthera was ordered in federal court to pay $500,000 in fines for its coercive and illegal collection tactics for debts that were simply not owed by those sued by the company. The company admitted the illegal actions in the case.

Despite the ACCC’s ostensibly mediated lawsuits, the Panthera subsidiary has continued to garner business from Services Australia, again raising questions about why the public procurement and probity processes have not eliminated a recognized rogue operator when awarding work often prosecuting vulnerable people.

“The use of third-party debt collectors in the Robodebt scheme” is included as a specific mandate of the Royal Commission into the Robodebt scheme which is currently underway and is taking evidence from witnesses called before it.

ARL Collect Pty Ltd managing director Robert Whelan is one of the witnesses called to testify this week, as is Christopher Ross, chief compliance officer at Illion Australia Pty Ltd as Milton Graham.

The role of outsourced debt collectors in collecting alleged debts, since illegally discovered by the former Department of Social Services (now Services Australia), has never been far from controversy, particularly around alleged pressure tactics used to get people to pay.

One of the most visceral moments of the robodebt scandal ahead of the royal commission occurred on August 17, 2020, when Labor Senator Deb O’Neill finally secured a reluctant public admission from the secretary of the Department of Social Services of At the time, Kathryn Campbell on the robodebt human toll extracted from those targeted by the program.

“Do you deny that people died as a result of the robodebt scheme, Mrs. Campbell?” Senator O’Neill asked Campbell during the Community Affairs Committee of References investigation into Centrelink’s compliance program .

“And I continue to believe and consider that mental health is a very complex situation,” Campbell replied.

At the same hearing, O’Neill explained to Campbell that “…the last time we met, Mrs. Campbell, you also disputed that people died because of Robodebt. I mentioned that people died because of Robodebt and you disputed it. Do you stand by this statement? to elicit responses from Campbell that “mental health is a very complex environment.”

Campbell’s response to the question of whether robodebt had contributed to the suicides eventually prompted O’Neill to produce and read a letter from the mother of a man who, although his mental health was known to Centrelink, was sued by debt collection agency Dunn and Bradstreet, and later committed suicide.

Like Panthera subsidiary ARL Collect, Dunn and Bradstreet were also hired as debt collectors for robodebt; however, he was not being prosecuted for inadmissible conduct.

As the royal commission continues to record the human misery, suffering, and bureaucratic shortcomings of the robodebt program, Panthera appears to have been one of its few material beneficiaries.

In October, the Australian Financial Review (AFR) reported that Canadian private equity firm Brookfield invested $150 million in Panthera Finance to “finance the company’s expansion and refinance its existing credit facilities”.

The AFR reported that “Panthera boss and co-owner Jamie Hough” said the investment would help “consolidate our position as one of the biggest players in Australia’s purchased debt ledger (PDL) sector. “.

CHAMP Private Equity also took a stake in Panthera in 2017, according to AFR.

The investment in Panthera comes amid an upheaval in the local debt management and debt collection industry after COVID-related measures imposed collection moratoriums on many arrears and prevented creditors from taking on debtors to the wall or to liquidate them.

Immediately before the budget, the Australian Taxation Office warned that it expected its tax collection efficiency, previously quoted at 93%, to decline as COVID restrictions on arrears collection were eased.

The ATO is by far the largest purchaser of commercial debt collection services from the federal government and is known to have been concerned about both building and running the now illegal robodebt program that abused data on ATO revenues to mistakenly tally up millions in social benefits. for the differences.

Tax authorities had previously challenged the idea that Centrelink and Human Services could simply interpret a debt on the basis of a calculation that applied average annual income to fortnightly social benefits, a method the royal commission heard on Wednesday was considered legally indefensible with the Department of Social Services.

In 2017, ATO Deputy Debt Commissioner Robert Ravanello (since retired) told the Senate Community Affairs Committee that Tax’s involvement in robodebt essentially stops at the provision of annualized earnings data.

“We focus on people, not debt,” Ravanello said in 2017. “Debt doesn’t just magically appear.”

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“Debts don’t magically appear”: ATO defends its reputation against robodebt