Australian Securities and Investment Commission v A&M Group Pty Ltd trading as Debt Negotiators

The number of contraventions 68 ASIC relies upon Annexure A to the concise statement, which as noted above details a total of 149 individual SMS messages, emails and telephone calls by which the Defaulting Debtor Representations were made and the Third Party Conduct took place, and constituting an aggregate of 190 such representations with more than one such representation sometimes taking place in a single communication. This took place in a period of just over two years in relation to the six debtors. ASIC describes the conduct as being consistent in some ways and different in others. The similarities turn on the means of communication, while the differences turn on contact with the debtors as against contact with third parties as a source of indirect and humiliating pressure. ASIC submits that the conduct should not be treated as a single course of conduct, but rather as six sets of contraventions directed to the six debtors who had their rights infringed on an individual basis. 69 ASIC also submits that it would not be appropriate to proceed upon there being a contravention for each communication (149 on ASIC's argument; fewer on Debt Negotiators' stance, turning on a statutory issue addressed below). The argument in that regard is that each communication produces an absurdly high number of contraventions, and also artificially separates what was really a series of related communications to each debtor, with a cumulative effect upon each of them. ASIC also points to the admissions made by Debt Negotiators as being upon the basis of the formulation of six separate contraventions. While I would not agree that 149 communications is an absurdly large number, the focus on the debtors is the main point advanced by ASIC. 70 In support of those arguments, ASIC relies upon the following authority: (a) the observations of Beach J in Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790: [72] It is important to ensure that a respondent is not sanctioned more than once for what is in substance one episode of contravention. It is appropriate to consider whether, and the extent to which, the contravening conduct should be regarded as a single course of conduct and penalised as one offence in relation to each category of contravention, on the principle that a contravener should not be penalised more than once for the same conduct. [73] Further, where there is an interrelationship between the legal and factual elements of a contravention, the course of conduct principle may be able to be applied to group contraventions. But it represents a tool of analysis only. [74] Further, where there have been discrete episodes each involving deliberation, then such a grouping may be inapposite, even if they reflected a common theme, strategy or model. [75] Further, even a single strategy involving a single or substantially consistent form of conduct might deny such a grouping where the conduct is directed towards numerous recipients. (b) the observations by the Full Court in Queensland Children's Hospital at [145] to the effect that it may be permissible and appropriate to impose a single pecuniary penalty for multiple contraventions, having regard to a joint approach to that effect by the parties in terms of pleadings, agreed facts, and submissions. However, in this case, ASIC's pleaded case and submissions advance six contraventions organised by debtors, such that the following observations in that case should guide the exercise: [148] The important point to emphasise is that, contrary to the Commissioner's submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions. That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions. [149] In an appropriate case, however, the Court may impose a single penalty for multiple contraventions where that course is agreed or accepted as being appropriate by the parties. It may be appropriate for the Court to impose a single penalty in such circumstances, for example, where the pleadings and facts reveal that the contraventions arose from a course of conduct and the precise number of contraventions cannot be ascertained, or the number of contraventions is so large that the fixing of separate penalties is not feasible, or there are a large number of relatively minor related contraventions that are most sensibly considered compendiously. As revealed generally by the reasoning in Commonwealth v Director, FWBII, there is considerably greater scope for agreement on facts and orders in civil proceedings than there is in criminal sentence proceedings. As with agreed penalties generally, however, the Court is not compelled to accept such a proposal and should only do so if it is considered appropriate in all the circumstances. It is also at the very least doubtful that such an approach can be taken if it is opposed or the proceedings are defended. 71 ASIC points to the approach taken by Griffiths J in Australian Competition and Consumer Commission v ACM Group Limited (No 3) [2018] FCA 2059, in which a debt collection agency was found, after trial, to have contravened s 50 of the Australian Consumer Law by engaging in undue harassment or coercion towards two debtors, with his Honour arriving at a specific figure attributable to each of the debtors. ASIC urges the same approach be taken here, by reference to the six debtors. 72 Debt Negotiators contend that the approach that should be taken is to penalise each communication and suggests a uniform penalty for each contravention of, say, $2,000. As the discussion below reveals, Debt Negotiators contend that only 95 of the communications can be penalised, and accordingly suggests a total penalty not exceeding $190,000. 73 I will return to the quantum of penalty later in these reasons. However, at this stage it suffices to say that I reject the notion that the penalty should be imposed by reference to each separate communication. That is a wholly artificial exercise. It would have the perverse effect of making it less serious to make a smaller number of more serious communications, and pay no effective heed to the cumulative effect on each debtor. But more importantly it would not properly reflect what has really taken place, and the proscriptions that were breached, from the perspective of those who were meant to be protected. The number and content of the communications, and who they were directed to, informs the seriousness of what has taken place in relation to each debtor, whether the communication was directly to each, or indirect to someone close to them to achieve the same end, or by way of a combination. I am firmly of the view that the penalties should be imposed per debtor, such that there are six contraventions.

The competing cases for the parties on penalty 74 There is a live contest as to the extent to which of the admitted contraventions can be the subject of penalties, both as a matter of statutory construction and as a matter of pleading in the originating application. The dispute arises because of amendments to the ASIC Act that took effect on 13 March 2019, being 13 months into the 24 month contravention period. 75 ASIC's case is that penalties may be imposed for the entire 24 month period, alleging six courses of conduct corresponding to the communications with each of the six consumer debtors, seeking a penalty of $500,000 for the conduct directed to five of the debtors and a penalty of $750,000 for conduct directed to the remaining debtor, a total of $3.25 million. The contravening conduct in relation to four of the debtor consumers straddled the change in the legislative regime. The contravening conduct in relation to the remaining two debtor consumers all took place prior to 13 March 2019, so only remains in issue as to the contested approach of imposing penalties by reference to the conduct directed to each consumer, rather than to each contravening communication, because on either approach the pre-13 March 2019 penalty regime applies to all of those contraventions. 76 Debt Negotiators' case is that penalties may only be imposed for the period from 30 January 2018 to 12 March 2019. As noted above, Debt Negotiators submits that penalties should be imposed for the 95 admitted contravening communications that took place in that period, and seeks a flat penalty of $2,000 per contravention, to arrive at a total penalty of $190,000. It describes the penalty sought by ASIC as going far beyond what is necessary for general deterrence, and that it is calculated to ruin the company. Given that this argument has already been rejected, the real point of the argument is whether any contravening conduct directed towards a given debtor can be penalised after the change in the legislation.

The legislative penalty regime 77 It is convenient to start with the objective position as to the legislative regime for seeking and imposing penalties for the provisions that have been contravened as it existed up to 12 March 2019, and as it has existed since then. Within both the periods before and after 13 March 2019, this Court had the power to award pecuniary penalties, and there were maximum penalties specified. 78 ASIC relies on the Court's power that was found in s 12GBA of the ASIC Act (as it stood prior to 13 March 2019), and the maximum that was set out in s 12GBA(3) of 10,000 penalty units for a body corporate. After the 13 March 2019 amendment, the maximum penalty that could be awarded for a contravention of a civil penalty provision such as s 12DJ was prescribed by s 12GBCA(2)(a). However, as originally enacted, the 13 March 2019 amendment contained a drafting error, such that there was no applicable penalty specified for the civil penalty provisions for the purposes of s 12GBCA(2)(a). Accordingly, on 23 July 2020, with retrospective effect from 13 March 2019, s 12GBCA(2)(a) was repealed and replaced by schedule 3, items 2 and 9 of the Treasury Laws Amendment (2019 Measures No.3) Act 2020 (Cth) so as to prescribe the relevant penalty, being a substantially higher penalty than the amount allowable under s 12GBA(3) of 50, 000 penalty units for a body corporate. 79 The power to award pecuniary penalties under s 12GBA during the relevant period was limited only to contravening conduct that fell within Subdivision C, D or GC of the ASIC Act. While s 12DA as pleaded falls under the consumer protection provisions in Subdivision D, the award of a pecuniary penalty was prohibited by the operation of s 12GBA(1)(a) of the ASIC Act (as it stood prior 13 March 2019). As such, in the circumstances of what is alleged in this case, it is only conduct which contravened s 12DJ that this Court may order Debt Negotiators to pay pecuniary penalties under the ASIC Act.

The pleading of the concise statement as to penalty 80 The originating application commences by the following: This application is made under section 21 of the Federal Court of Australia Act 1976 (Cth) and section 12GBA (as it stood prior to 13 March 2019) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). The plaintiff claims that the defendant contravened sections 12DA and 12DJ of the ASIC Act by making representations that were misleading or deceptive or likely to mislead or deceive and using undue harassment or coercion in relation to six of its debtor clients, and seeks declarations against the defendant in respect of each contravention, pecuniary penalty orders and ancillary orders, including costs. 81 The first dispute for resolution is whether ASIC, by referring only to s 12GBA as it stood up to 12 March 2019, confines the Court to imposing penalties only up to 12 March 2019. Closely related to this are the competing arguments as to imposing penalty by conduct directed to each of the debtor consumers, or by contravening communication.

The competing arguments on the penalty regime and transaction approach to penalty 82 ASIC emphasises the complexity in ascertaining the applicable maximum penalties to the contravening conduct during the relevant period. This is due to the fact, as explained above, the conduct occurred over a lengthy period, during which the provision that provided for the applicable maximum penalty changed to one that ceased to provide for any penalty until it was repealed and replaced as described at [75]. The resultant effect was that, with respect to two of the debtors (Debtor HC and RL), the contravening conduct relating to them occurred wholly prior to 13 March 2019, and therefore is subject only to the earlier maximum penalty imposed by the ASIC Act as it stood then. It follows that the four remaining debtors (Debtors TB, JD, LH and DM) were subjected to contravening conduct for a period both before and after 13 March 2019. 83 Nonetheless, ASIC maintains that in determining the maximum penalty for the conduct concerning these four debtors, the Court must have regard to s 322 of the ASIC Act, which provides with respect to the 2019 amendment: 322 Application - civil penalty provisions Subject to this Part, the amendments made by Schedule 2 to the amending Act apply in relation to the contravention of a civil penalty provision if the conduct constituting the contravention of the provision occurs wholly on or after the commencement day. 84 ASIC in both its written and oral submissions emphasises the significance of the word "wholly" in this provision. It submits that where the contravening communications spanned before and after 13 March 2019, the approach the Court must take is to treat the contraventions by each of the six debtors as if they involved a single contravention of s 12DJ of the ASIC Act. ASIC submits that if the Court is to take this approach, where the contravening conduct of the four debtors spanned before and after 13 March 2019, it cannot be said that the contravening conduct "occurred wholly on or after" 13 March 2019. Further, in making this submission, ASIC refers to the Court's obligation to grant all remedies entitled in respect to a claim, so that all matters in controversy may be finally determined to avoid multiplicity in proceedings: see ss 22 and 23 of the Federal Court of Australia Act 1976 (Cth). 85 Debt Negotiators argues that the operation of the penalty provision after 12 March 2019 should be construed differently. In its written submissions and later developed in its oral submissions, it submits that penalties under s 12GBA cannot continue to be imposed after the form of this provision that is provided for any penalty which ceased to operate on 12 March 2019 while the provisions contravened continued in force. The effect of this submission is that any admitted contravention from 13 March 2019 to the end of the relevant period can only be considered in the imposition of penalties insofar as they are relevant to the question of deterrence (which perhaps, in a practical sense, renders the argument somewhat barren, especially given the approach I regard as appropriate of considering the contraventions per debtor, and the predominance of deterrence). Further, in response to ASIC's submission regarding the Court's obligation to grant complete relief, Debt Negotiators argues that if the Court applied penalties only to the admitted contraventions before 13 March 2019, relief would be complete on the originating process that is before this Court, being the originating process when this case was settled. 86 I have carefully considered the competing arguments, and concluded that the argument advanced by ASIC is correct and should be adopted. I am satisfied that penalties are able to be imposed for the whole period, but note that this a legal conclusion rather than a practical one. Given that conduct taking place after the change in the legislation can be taken into account in the determination of the penalty needed for deterrence purposes, even if Debt Negotiators' argument had prevailed on this issue, it would not have made any material difference to the outcome.

Capacity to pay 87 In considering the imposition of an appropriate pecuniary penalty it is necessary for the Court to have regard to certain financial and market considerations pertaining to Debt Negotiators, including the relative size and market share of them as a business, as well as any evidence of loss or damage caused by the contravening conduct. 88 ASIC submits that this is not a case where tangible loss or damage was suffered by the debtors, which is commonplace in a case concerning the use by a provider of financial services of undue harassment or coercion. Instead, the likely effects of such conduct are apt to be mostly intangible, including stress and embarrassment and harm to the informed and confident participation by consumers in the financial system, a core function promoted by the ASIC Act. 89 Moreover, ASIC also submits that this not a case where Debt Negotiators have made a significant profit as a direct result of the contravening conduct. ASIC attributes this to the very nature of debt agreements, as they tend to involve relatively smaller sums of money. In any view, it must be borne in mind that while total net profits of $14,057.62 do not seem especially high in the context of Debt Negotiator's revenue and the maximum penalty figures prescribed by the ASIC Act, this is not a trivial sum of money to customer debtors who were under a degree of financial hardship and distress. That is so even if, as I accept is likely, the conduct in question only went to a part of the administration of each agreement. 90 In ASIC's submission, the relatively small profit as a direct result of the contraventions ought not to result in a heavily reduced penalty, as to do so would be to fail to recognise the important value in protecting the type of consumers harmed by this conduct, who tend to be relatively impecunious, and therefore vulnerable consumers of financial products or services: see the quote from viagogo reproduced above at [11]. 91 When regard is had to the figures in relation to Debt Negotiators' financial position and market share, which ranks them as the second largest registered debt agreement administrator in Australia, occupying some 13 to 14% of the market, the figures reflect in ASIC's submission, "a large-scale business consistently making substantial profits". ASIC relevantly reproduces the figures relative to Debt Negotiators' financial position as follows: Financial Year Net Profit ($) Revenue ($) 2018 678,456 8,758,097 1019 610,273 9,616,368 2020 1,598,476 9,681,505 2021 1,075,712 8,510,590 2022 (projected) 888,337 6,271,970

92 ASIC submits that the Court ought to have regard to these figures to ensure that the penalty figures arrived at adequately achieve the element of specific deterrence, so as to ensure the penalties are not seen as an "acceptable cost of doing business". Further, in response to Debt Negotiators' submission that the amount ASIC sought by ASIC would "ruin the company" by way of insolvency, ASIC submits that the Court should not pay substantial regard to this, as any possibility that Debt Negotiators might become insolvent as a result of the quantum of the penalties, would undermine the object of general deterrence. As already noted, the option of a limited number of instalment payments, if shown to really be needed, addresses this concern in any event. The combination of the penalties and the costs and expenses are still less than the projected net profit for last financial year.

Mitigating aspects 93 ASIC accepts that there are potential mitigating factors in this case which should be taken into account in the calculating of pecuniary penalties. In its written submissions it points to a series of mitigating factors as follows. 94 First, the contravening conduct was not engaged in with the participation or knowledge of Debt Negotiators' senior management. As explained above, at [26], the conduct was engaged in by Customer Support Officers and a Customer Support Manager, JD. However, the fact that JD was in a management position and directly participated in the conduct lessens the weight of this mitigating factor. The evidence is that when Mr Thomas identified XP making a representation to a debtor that they could be charged with fraud and face 12 months' imprisonment for withdrawing their superannuation to meet the payments due under their debt agreement, he disapproved of that conduct in an email exchange with XP as explained above at [33]. There is no evidence that Mr Ibrahim as the sole director of the company was personally aware or personally involved in the contravening conduct until 7 June 2019, when he learnt that on 15 April 2019, a communication had occurred in the same terms as the contravening communications. 95 However, in ASIC's submission, a lack of direct participation by senior management in contravening conduct does not translate to an absence of culpability from those persons, or support a finding that the conduct was engaged by rogue employees in the abstract. There was a very significant failure by Debt Negotiators to train and oversee the Customer Support Officers and thereby prevent, mitigate or detect the contravening conduct. Senior management's culpability is apparent from the lack of adequate safeguards in place, detailed above at [31], and the evidence that the contravening conduct continued even after Mr Thomas detected similar conduct in June 2018, and after the AFSA investigation concluded in July 2019. ASIC submits that it is also highly relevant that Debt Negotiators incentivised the contravening conduct through its bonus structure, as explained at [29] above. 96 Secondly, Debt Negotiators has taken some important remedial steps since the contravening conduct was detected. These measures are set out in the reproduced form of the SOAF at [37]. As noted above, ASIC accepts that these measures are robust and appropriately tailored to address the contravening conduct. 97 Thirdly, prior to the detection of the contravening conduct, Debt Negotiators had not been found to have engaged in the same or similar conduct; and fourthly, Debt Negotiators admitted the contraventions and cooperated with ASIC's investigations. ASIC submits, and I accept as set out in my introductory comments, that there is a clear utilitarian value in the making of such admissions, which should be reflected in the penalties imposed, citing Queensland Children's Hospital where the Full Court observed at [163]: From a public policy perspective, it is important to encourage such cooperation by reflecting it in the penalties imposed. It also shows a willingness on the part of the [contravenor] to accept responsibility for its actions and to facilitate the course of justice. The fact that the proceeding was not defended saved the community the expense of a potentially lengthy contested hearing. 98 Debt Negotiators' relatively early admission to the alleged contraventions was important. Not only did it amount to a telling acceptance of responsibility, but such an acceptance is almost always an important threshold to cross when it comes to assessing the ongoing need for specific deterrence, but does not necessarily eliminate the need. A person who admits to wrongdoing is almost always on a pathway going away from the risk of repetition, while a person in denial is generally more likely to see no error in their ways and thus more likely to repeat some version of the contravening conduct. That said, general deterrence cannot be set at nought because the need for specific deterrence has greatly diminished. General deterrence in an area such as this remains a most important consideration. 99 However, it should be noted that while Debt Negotiators admitted to the contravening conduct, the admissions made were not "at the earliest reasonable opportunity". Rather, they were made only after Debt Negotiators filed a concise statement in response denying all key allegations made by ASIC, other than the bare fact that the contravening communications occurred. The admissions ultimately made were the product of mediation. Further, Debt Negotiators continues to deny the allegations at paragraph 11 and 14 of the concise statement, reproduced above at [26]. 100 From the perspective of specific deterrence, a genuine and substantial remedial program, as detailed below and accepted by ASIC to be robust, is of considerable importance. It means much more than assurances and expressions of regret. It is a tangible and practical indication of not just saying sorry, but of genuinely being sorry. And the manifestation of genuine regret in that way is of itself a better predictor that the conduct will not be repeated, although ongoing vigilance is required as institutional memories fade, personnel change and financial benefits and other incentives to contravene again start to be factored in. Other registered debt administrators, and their advisors need to see that proper systems and procedures to prevent contraventions taking place is acknowledged and rewarded.

Penalty assessment 101 This case was not brought by ASIC as a representative proceeding on behalf of customer debtors arising out of the circumstances of the contravening conduct. Rather, it was brought by reference to Debt Negotiators' dealings with the six individual customer debtors, and this very fact is reflected in the manner in which I impose the penalty. Taking into account all of the evidence and submissions, both consistent and completing, to arrive at a final figure for each contravention, I have decided that the demands of general deterrence, and to a much lesser extent, those of specific deterrence, are met by a total penalty of $650,000, comprising of $100,000 for each of five of the debtors, and $150,000 for the sixth debtor. On any view that is a substantial sum both for the individual contraventions, and overall, but in my view that is warranted by the serious nature of the contravening conduct, the continued although lesser need to deter Debt Negotiators from ever doing this again, and the particular and substantial need for general deterrence in relation to conduct directed at a financially vulnerable part of the community by statute sanctioned commercial operators. That is so despite the absence of clear evidence of any profit directly attributable to the revenue obtained from the six debtors of just over $20,000. 102 As will be apparent, I have arrived at these individual figures and the overall figure, considering the residual aspect of specific deterrence and the dominant aspect of general deterrence, taking into account the relatively early admission to the alleged contraventions, the robust remedial program that has been implemented, and the substantial impact of both on the need for specific deterrence, but also keeping a weather eye on the most important consideration of general deterrence. Although the need for specific deterrence has been greatly reduced, that has not gone away as a consideration. There needs to be a strong incentive placed upon Debt Negotiators to ensure that there is no relapse, and in particular that the financial benefits, although small for any given individual debtor, but substantial overall and over time, do not in future result in succumbing to temptation. 103 In terms of specific deterrence, two considerations are clearly at play. First, the penalty per debtor is vastly greater than any gain that was made or capable of being made per debtor, remembering that specific deterrence is directed to the greater pool of debtors with agreements administered by Debt Negotiators at any point in time. Secondly, Debt Negotiators is squarely on notice that any future contraventions would likely be met with a considerably harsher penalty by reason of repeated contraventions, and because of the substantial increase in the minimum penalty. In terms of general deterrence, in an industry with a relatively small number of registered debt administrators, the same deterrent aspects remains in play, especially if ASIC takes steps to ensure this judgment is brought to the attention of the other registered debt administrators, both at present and in the future. 104 I am satisfied there is no proper basis for concluding that the overall penalty is oppressive in the sense of being any greater than presently needed to deter Debt Negotiators and other registered debt administrators. 105 This penalty represents the absolute minimum that can be imposed to achieve the primary objective of deterrence when regard is had to the aforementioned remedial actions taken by Debt Negotiators and such predatory and flagrant conduct without going against the dominant consideration of general deterrence. This should be treated as a caution to other commercial debt administrators. The message to them, to put it bluntly, is that if they engage is such contravening conduct, and do not admit to the contravening conduct at the first opportunity without taking any remedial steps, the penalty that will be imposed will be well in excess of any minimum provided by statute. All participants in the business of administering registered debt agreements must be given the clearest and most forceful incentive not to behave in this way. It must be viewed by those industry participants as simply not being worth the candle to do so: see by analogy Australian Securities and Investments Commission v Vizard [2005] FCA 1037; 145 FCR 57 per Finkelstein J at [48], citing McDermid JA in the Canadian Alberta Supreme Court, Appellate Division case of R v Jaasma (1976) 1 AR 553 at [5]; see also the Full Court case of R v Tait (1979) 46 FLR 386 per Brennan, Deane and Gallop JJ at 399. 106 Debt Negotiators raised a concern about substantial penalties being imposed, and their capacity to be impermissibly oppressive, in the sense of being more than is needed to achieve the objective of deterrence, as well as in a more general sense of being crushing and unduly burdensome for Debt Negotiators. As noted and explained above, I am unable to accept either concern as being well founded. I have already addressed the need for this level of penalty to address properly the primary objective of deterrence. In terms of the second aspect of Debt Negotiators' financial viability, if needed that can be met by either an agreed, or adjudicated upon, regime for an initial substantial penalty payment, then the payment of costs, and then the payment of the balance by instalments over an extended period of time to help to ensure that Debt Negotiators can remain in business. 107 In reaching this conclusion about penalty, I observe, as will already be obvious, that Debt Negotiators was well-advised to admit to the contraventions, and that this, coupled with the remedial actions taken, admitted by ASIC to be robust, has substantially reduced the penalty required to be imposed to meet the objectives of general deterrence and even more importantly, specific deterrence. While never a foregone conclusion, it is highly likely that ASIC would have succeeded in proving the contraventions at trial given the evidence that was able to be presented at the penalty hearing, in particular the text of the contravening communications, which are extracted in a lengthy and detailed schedule to the concise statement. 108 The combination of the admissions made, the facilitation of the course of justice that this entailed (including saving the time and resources of a most important regulator to be deployed elsewhere and of this Court to hear and determine other cases), the contrition and remorse that this demonstrated to my satisfaction, and the robust changes implemented to prevent recurrence of the contravening conduct, has gone a very long way to reducing the need for specific deterrence. The dominant consideration has been general deterrence, with that also being moderated by the need to encourage such a sensible approach by other contraveners. 109 However, there still remains a need to encourage continued vigilance, such that this remains a lesser part of the penalty equation. That is because the penalty is imposed on a company, but the conduct is always by individuals, such that the company must implement, update, and maintain its compliance systems as the workforce changes over time or becomes complacent, including for detection of untoward conduct that may also constitute a contravention. 110 As was observed on the topic of deterrence in a marketplace context like the present in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [152] per Jagot, Yates and Bromwich JJ, quoted with approval in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 314 IR 301 at [41] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ: If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance. 111 The maximum penalties for the present civil penalty provisions were substantially increased from $2.1 million to $10.5 million on 23 June 2020, with retrospective effect from 13 March 2019, being about half way through the relevant period. That is likely to lead to much higher penalties for similar conduct in the future, not only because a jurisdictional limit has been substantially increased, but because the penalties imposed in this and any other case will not have achieved the objective of deterrence. The maximum penalty constrains the exercise of the penalty imposing discretion both by the jurisdictional limit and by requiring a reasonable relationship between the maximum and the final penalty imposed, which may be established by reference to the circumstances of both the contravener and the conduct involved, both of which may have a bearing upon the extent of the need for deterrence: Pattinson at [10], [55], referencing what was said in Reckitt Benckiser at [155]-[156]. The maximum penalty is no longer reserved for the most serious category of contravention: Pattinson at [59].

Conclusion 112 For the foregoing reasons, I am satisfied that penalties of $650,000 should be imposed upon Debt Negotiators, being $100,000 for each of debtors HC, TB, JA, RL and DM and $150,000 for debtor LH. Debt Negotiators should also be ordered to pay $80,000 towards ASIC's legal costs, and is going to be directed to pay, and has agreed to pay, $70,000 towards ASIC's investigative costs, bringing the total sum payable to $800,000. I will allow time for that sum to be paid, with an initial substantial penalty payment of $200,000 (just above the penalty sought by Debt Negotiators' of $190,000) and the payment of costs and investigative expenses of $150,000. Perhaps ironically, this instalment regime is not unlike the debt instalment payments required to be made under debt agreements administered by Debt Negotiators. 113 If (and only if) those payments totalling $350,000 are made within 35 days (that is, by 20 January 2023), or such other time as may be allowed, then payment of the balance of $450,000 of the penalty may be made by substantial monthly instalments as agreed and approved, or ordered if agreement cannot be reached. 114 As a general guide to the parties, I would have thought that payment of $90,000 per month would be reasonable, enabling the remaining $450,000 to be paid within the current financial year, but there may be some compelling reason able to be established why that is not feasible. I certify that the preceding one hundred and fourteen (114) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich.

Associate: Dated: 16 December 2022 SCHEDULE Particulars of the Defaulting Debtor Representations (DDR) and Third Party Conduct (TPC) Debtor HC (communications 1 to 16) Date Time Type Staff Communication DDR/TPC

1.                              26/02/2018  10:55 AM  SMS    JD     Hi [W], Please pass the message for [Debtor HC] to call [Staff JD] from Debt Negotiators on 1300 351 008 option 2. Thank you                                                                                                                                                                                                                                                                                                                                                                                                                                                                              TPC
   

2.                              26/02/2018  10:55 AM  SMS    JD     Hi [L], Please pass the message for [Debtor HC] to call [Staff JD] from Debt Negotiators on 1300 351 008 option 2. Thank you                                                                                                                                                                                                                                                                                                                                                                                                                                                                              TPC
   

3.                              04/05/2018  5:32 PM   SMS    SN     Please call [Staff SN] from Debt Negotiators on 1300351008 in regards to your arrears. Your creditors have contacted me and are looking at terminating your account, if they proceed they may force you to bankruptcy and take legal action against you. Kind Regards                                                                                                                                                                                                                                                                                                                                     DDR
   

4.                              07/05/2018  12:35 PM  SMS    SN     Please call [Staff SN] from Debt Negotiators on 1300351008 in regards to your arrears. Your creditors have contacted me and are looking at terminating your account, if they proceed they may force you to bankruptcy and take legal action against you. Kind Regards                                                                                                                                                                                                                                                                                                                                     DDR
   

5.                              02/08/2018  9:47 AM   SMS    SG     Your Debt Agreement is now in the process of being terminated. You have not made any payments so your creditors are looking to force you into bankruptcy. Once you have been terminated your trustee will closely examine all of your financial situation and if they feel that you in actual fact had the ability to service your debt, then you could be charged with fraud, facing up to 12 months imprisonment. We really want to avoid this even being a possibility, so we kindly ask that you contact us on 1300351008 to discuss what we should do together to make this work. regards, DEBT NEG  DDR
   

6.                              02/08/2018  9:48 AM   Email  SG     Hi [Debtor HC], Your Debt Agreement is now in the process of being terminated. You have not made any payments so your creditors are looking to force you into bankruptcy. Once you have been terminated your trustee will closely examine all of your financial situation and if they feel that you in actual fact had the ability to service your debt, then you could be charged with fraud, facing up to 12 months imprisonment. We really want to avoid this even being a possibility, so we kindly ask that you contact us on 1300351008 to discuss what we should do together to make this work.    DDR
   

7.                              17/09/2018  1:19 PM   SMS    JD     Hi [W], Please pass the message for [Debtor HC] to call [Staff JD] from Debt Negotiators on 1300 351 008 option 2. Thank you                                                                                                                                                                                                                                                                                                                                                                                                                                                                              TPC
   

8.                              17/09/2018  1:20 PM   SMS    JD     Hi [L], Please pass the message for [Debtor HC] to call [Staff JD] from Debt Negotiators on 1300 351 008 option 2. Thank you                                                                                                                                                                                                                                                                                                                                                                                                                                                                              TPC
   

9.                              17/09/2018  1:21 PM   SMS    JD     called and spoke with female she said that she is the clients friend - told her that i will send a text with my details - advised that it is urgent!                                                                                                                                                                                                                                                                                                                                                                                                                                                      TPC
   

10.                             03/10/2018  10:58 AM  SMS    SG     Hi [Debtor HC], Your debt agreement is now under review for termination. Your creditors will now be assessing your account history and payments and will advise if they wish to terminate the contract in order to look into proceeding with legal action such as bankruptcy & fraud charges. The only way to safely stop this process is by clearing your arrears in full. Please contact the office if you wish to do so. We will be in contact with you on the 31/10/2018 to notify you of the outcome. Kind Regards, Management Debt Negotiators 1300 351 008                                         DDR
    

11.                             03/10/2018  10:58 AM  Email  SG     Hi [Debtor HC], Your debt agreement is now under review for termination. Your creditors will now be assessing your account history and payments and will advise if they wish to terminate the contract in order to look into proceeding with legal action such as bankruptcy & fraud charges. The only way to safely stop this process is by clearing your arrears in full. Please contact the office if you wish to do so. We will be in contact with you on the 31/10/2018 to notify you of the outcome. Kind Regards, [Staff SG]Customer Support Officer Debt Negotiators                              DDR
    

12.                             10/10/2018  12:01 PM  SMS    JD     Hi [W] Please pass the message for [Debtor HC] to call [Staff JD] from Debt Negotiators. on 1300 351 008 option 2. Thank you.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             TPC
    

13.                             10/10/2018  12:02 PM  SMS    JD     Hi [L], Please pass the message for [Debtor HC] to call [Staff JD] from Debt Negotiators. on 1300 351 008 option 2. Thank you.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            TPC
    

14.                             26/11/2018  4:10 PM   SMS    JD     Hi [Debtor HC], This is [Staff JD] again. Can you please respond to this text and let me know what you want to do, You say you want to pay but you never do. Please look into bankruptcy as this is where you unfortunately are headed. All the best to you.You Debt Agreement will be terminated and your travel will be restricted and legal action may be taken against you.                                                                                                                                                                                                                           DDR
    

15.                             26/11/2018  4:11 PM   Email  JD     Hi [Debtor HC], This is [Staff JD] again. Can you please respond to this text and let me know what you want to do, You say you want to pay but you never do. Please look into bankruptcy as this is where you unfortunately are headed. All the best to you. You Debt Agreement will be terminated and your travel will be restricted and legal action may be taken against you. Kind regards [Staff JD] Customer Support Manager                                                                                                                                                                         DDR
    

16.                             04/03/2019  2:49 PM   SMS    KD     Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008                                                                                                                                                                                TPC
    

Debtor DB (communications 17 to 35) Date Time Type Staff Communication DDR/TPC 17. 10/01/2019 8:53 AM SMS KD Hi [M], [Debtor TB] has provided your phone number as an emergency contact. Can you please ask her to call A&M group URGENTLY on 1300351008. TPC 18. 10/01/2019 8:53 AM Phone Call KD ACCELEON SEARCH USING ADDRESS - DID NOT FIND CLIENT HOWEVER FOUND HER MOTHER - CALLED NO ANSWER. [MB] [Details specified for address, date of birth, email address and phone number] TPC 19. 22/01/2019 1:47 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 20. 30/01/2019 8:45 AM SMS SG Could you please contact Debt Negotiators as a matter of EXTREME urgency. Your creditors have requested to terminate the contract in order to commence legal action. PLEASE contact us as soon as possible as they have demanded action to begin this week. Regards, [Staff SG] (02) 87087 207 DDR 21. 01/02/2019 4:59 PM SMS SG Could you please contact Debt Negotiators as a matter of EXTREME urgency. Your creditors have requested to terminate the contract in order to commence legal action. PLEASE contact us as soon as possible as they have demanded action to begin this week. Regards, [Staff SG] (02) 87087 207 DDR 22. 01/03/2019 3:25 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 130035100 TPC 23. 21/03/2019 2:09 PM SMS KD Hi [Debtor TB], do you want to continue with your Debt Agreement or not? I am happy to have it terminated and you can go bankrupt. Your creditors want us to start contacting your family and friends to recover the funds. DDR 24. 25/03/2019 9:25 AM SMS KD Hi [Debtor TB], can you please get back to us regarding your Debt Agreement. I'm sure it will be easier to speak with us then for your creditors to start calling your family and friends to recover your debts. 1300351008. DDR 25. 25/03/2019 9:27 AM Phone Call KD ACCELEON SEARCH USING ADDRESS - FOUND CLIENTS MOTHER - NUMBER HAS INCOMING CALL RESTRICTIONS. [MB] [Details specified for address, date of birth, emailaddress and phone number] TPC 26. 25/03/2019 9:33 AM SMS KD Hi [M], [Debtor TB] has provided your phone number as an emergency contact. Can you please pass a msg on for her to call A&M Group URGENTLY on 1300351008. TPC 27. 25/03/2019 9:43 AM SMS KD Hi [T], [Debtor TB] has provided your phone number as an emergency contact. Can you please pass a msg on for her to call A&M Group URGENTLY on 1300351008. TPC 28. 25/03/2019 9:59 AM SMS KD Hi [B], [Debtor TB] has provided your phone number as an emergency contact. Can you please pass a msg on for her to call A&M Group URGENTLY on 1300351008. TPC 29. 25/03/2019 10:01 AM Phone Call KD ACCELEON SEARCH USING FRIEND FOUND - CALLED NUMBER NO ANSWER - SENT SMS. [BN] [Details specified for address, date of birth, emailaddress and phone number] TPC 30. 25/03/2019 10:05 AM SMS KD Hi [R], [Debtor TB] has provided your phone number as an emergency contact. Can you please pass a msg on for her to call A&M Group URGENTLY on 1300351008. TPC 31. 25/03/2019 10:55 AM SMS KD Hi [B], [Debtor TB] has provided your phone number as an emergency contact. Can you please pass a msg on for her to call A&M Group URGENTLY on 1300351008. TPC 32. 25/03/2019 10:57 AM Phone Call KD ACCELEON SEARCH USING FACEBOOK FRIENDS - CALLED CLIENTS COUSIN - NO ANSWER - SENT SMS. [DS] [Details specified for address] TPC 33. 25/03/2019 10:57 AM SMS KD Hi [D], [Debtor TB] has provided your phone number as an emergency contact. Can you please pass a msg on for her to call A&M Group URGENTLY on 1300351008. TPC 34. 10/04/2019 3:50 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, [sic] work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG130035100 TPC 35. 15/04/2019 2:44 PM SMS SG Hi [Debtor TB], Your debt agreement is now under review for termination. Your creditors are assessing your account history and payments. They will advise if they wish to terminate the contract to start looking into proceeding with legal action such as bankruptcy & fraud charges! Please call me ASAP to stop this from happening, I have already received your termination papers so it's not looking good. We will be in contact with you on the 30/04/2019 to notify you of the outcome. I suggest you call me before this date to avoid further action. DDR

Debtor JD (communications 36 to 54) Date Time Type Staff Communication DDR/TPC 36. 30/01/2018 2:51 PM SMS SN Hi [Debtor JD], [Staff SN] here from Debt Negotiators. Please call us URGENTLY on 1300351008 in regards to your account. I have been contacted by your creditors and they may be looking at terminating your account as you have not made consistent payments towards your debt agreement. To avoid any legal action that maybe occur, please contact us to we can work together. Kind Regards. DDR 37. 01/03/2018 5:13 PM SMS SN Hi [Debtor JD], [Staff SN] here from Debt Negotiators. Please call us URGENTLY on 1300351008 in regards to your account. I have been contacted by your creditors and they may be looking at terminating your account as you have not made consistent payments towards your debt agreement. To avoid any legal action that maybe occur, please contact us to we can work together. Kind Regards. DDR 38. 28/09/2018 11:31 AM SMS JD Hi [L] Please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators. on 1300 351 008 option 2. Thank you. TPC 39. 28/09/2018 11:32 AM SMS JD Hi [D] Please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators. on 1300 351 008 option 2. Thank you. TPC 40. 09/10/2018 9:56 AM SMS SG Hi [Debtor JD], Your debt agreement is now under review for termination. Your creditors will now be assessing your account history and payments and will advise if they wish to terminate the contract in order to look into proceeding with legal action such as bankruptcy & fraud charges The only way to safely stop this process is by clearing your arrears in full. Please contact the office if you wish to do so. We will be in contact with you on the 09/11/2018 to notify you of the outcome. Kind Regards, DDR 41. 16/10/2018 3:03 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 42. 22/10/2018 3:23 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 43. 29/10/2018 12:40 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 44. 31/12/2018 9:41 AM SMS SG Hi [Debtor JD] Your debt agreement is now under review for termination. Your creditors will now be assessing your account history and payments and will advise if they wish to terminate the contract in order to look into proceeding with legal action such as bankruptcy & fraud charges The only way to safely stop this process is by clearing your arrears in full. Please contact the office if you wish to do so. We will be in contact with you on the 25/01/2019 to notify you of the outcome. Kind Regards, [Staff SG] DDR 45. 31/12/2018 9:41 AM SMS SG Hi [Debtor JD]Your debt agreement is now under review for termination. Your creditors will now be assessing your account history and payments and will advise if they wish to terminate the contract in order to look into proceeding with legal action such as bankruptcy & fraud charges The only way to safely stop this process is by clearing your arrears in full. Please contact the office if you wish to do so. We will be in contact with you on the 25/01/2019 to notify you of the outcome. Kind Regards, [Staff SG] DDR 46. 21/01/2019 2:58 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 47. 06/02/2019 4:28 PM SMS JD Hi [L], please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators urgently. Ph 1300 351 008 option 2. TPC 48. 06/02/2019 4:29 PM SMS JD Hi [D] please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators urgently. Ph 1300 351 008 option 2. TPC 49. 11/02/2019 2:09 PM SMS SG Could you please contact Debt Negotiators as a matter of EXTREME urgency. Your creditors have requested to terminate the contract in order to commence legal action. PLEASE contact us as soon as possible as they have demanded action to begin this week. Regards, [Staff SG] DDR 50. 12/03/2019 1:30 PM SMS JD Hi [L] please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators urgently. Ph 1300 351 008 option 2. TPC 51. 12/03/2019 1:31 PM SMS JD Hi [D] please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators urgently. Ph 1300 351 008 option 2. TPC 52. 26/03/2019 12:12 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 53. 04/04/2019 11:04 AM SMS JD Hi [L] please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators urgently. Ph 1300 351 008 option 2. TPC 54. 04/04/2019 11:05 AM SMS JD Hi [D], please pass the message for [Debtor JD] to call [Staff JD] from Debt Negotiators urgently. Ph 1300 351 008 option 2. TPC

Debtor LH (communications 55 to 114) Date Time Type Staff Communication DDR/TPC 55. 20/09/2018 6:57 PM SMS XP Hi [L], If you could please ask [Debtor LH] to call me as soon as she possibly can on 1300351008. TPC 56. 21/09/2018 11:11 AM SMS XP Hi [K], Could you please ask [Debtor LH] to contact me on 1300351008 as soon as she possibly can. I am trying to avoid her situation being taken further. TPC 57. 25/10/2018 12:44 PM SMS XP Hi [Debtor LH], Please call the office back as a matter of urgency. You missed a payment on the 10/10/18 and never contacted us about it. We have reached the end of our generosity. You are required to fix this payment, so please contact friends and family if you can't afford to do so without assistance. I have added this payment to your next instalment. You are required to pay$794 to ensure the account is moving forward. If you have an issue with this amount you need to call the office. DEBT NEG DDR ([8] CS) 58. 07/12/2018 12:39 PM SMS XP Hi [Debtor LH], It is [Staff XP] from Debt negotiators. I am calling/texting to advise you of your termination details. You will need these for Court, so please call me back on 02 8708 7244. Please note that you may be charged with fraud if a government trustee feels that you had the ability to pay your debt agreement. They will go through your finances for the last 5-10 years. A jail term of up to 12 months may be applied. DDR 59. 07/12/2018 N/A Call Notes (ASIC) XP Consumer - "what happens now, it's been terminated has it?" DDR Staff - "It's about to be terminated…" (0.37 s) …Staff (8 min 30s) - "I'm going to need you to send bank statements for the last 3 months. So where did those funds go?" Consumer - "ahhh living expenses really.. um, can't even tell you. My son's basketball, all that sort of stuff. That's it." Staff - "Mkay. Well I'm going to advise your creditors of all of this, um, I need to be really honest with you. If this gets terminated, and they force you into bankruptcy, someone is literally going to go through your expenses with a fine tooth comb, they aren't going to leave anything unturned, without looking into every cent that you've spent. If they feel that you had the means to pay your debt agreement, if you made purchases at McDonald's, if you made pointless purchases, you know things you don't need, you can potentially be sent to prison. That is a very real situation that you need to take in, you have little kids, I feel this is not a joke situation. On the flipside, if they don't force you into bankruptcy and decide to go with legal action, they can apply for a garnishee, which is a court order, where your payroll have to pay them before you pay you. They are entitled to take 80% of your income - you will be left with 20% to survive on, and there is nothing you can do about it. That court order follows you from job to job, until every single one of your debts is paid off. Right now you have a 34 - wow you have the highest discount I've never seen on an account, you are only paying 34% of your debts. If this gets cancelled, your debts return to the full amounts, all the interest that was frozen while you are in a debt agreement get added back on, your debts end up more than when you came to us. You can't enter another debt agreement for 10 years, so unfortunately you are stuck paying that. This isn't a joke - this isn't something to be taken lightly, and the fact you have such a small amount of payments, indicates to me that you think this is a joke..." 60. 07/12/2018 12:51 PM Phone Call XP [DH] [Details specified for address and phone number] CALLED, No answer Left message to call back [LH] [Details specified for address, date of birth, email address and phone numbers] CALLED - no answer // SENT TEXT Last Confirmation > 90 Days [KH] [Details specified for address and phone number] [KH] [Details specified for address, date of birth, email address and phone numbers] called, Disconnected called, Disconnected. CLIENTS BROTHER INLAW - [TJ] [TJ] [Details specified for address, date of birth, email address and phone numbers] Not Available CALLED - Disconnected TPC 61. 07/12/2018 1:10 PM SMS XP Hi [K], can you please ask [Debtor LH] to call the office on 02 8708 7244 as soon as possible. An issue that is VERY serious has arisen. TPC 62. 21/12/2018 3:04 PM SMS XP Hi [Debtor LH], Can you please make it priority to contact me on 02 8708 7244. Your payment has failed, as i am sure you are aware. I dont know what more we can do to express the importance of making your payments. Once this is cancelled your creditors will each contact your HR department at work and commence legal action from there. Honestly, if you dont want that to happen, call me today and we can sort something out. If you are not fussed then thats fine i will lodge the termination on monday. Regards, [Staff XP] - DEBT NEG DDR 63. 21/12/2018 3:08 PM SMS XP Hi [K], Can you please ask [Debtor LH] to contact us again on 02 8708 7244. TPC 64. 04/01/2019 Unknown Call Notes (ASIC) XP 4 min 45s - Staff: "Like I said, your creditors can literally call any second, and say enough is enough, then you don't have the option. If you sell the car after they say that, then you can be charged with fraud, and face prison. It's a very very serious situation. Talk to them [parents] can get back to me Monday morning, I'm happy for the payment arrangement to stay in place, but there needs to be something in the background to fix the arrears than that $300 a fortnight is going to..." DDR 65. 17/01/2019 12:39 PM Email XP Hi [Debtor LH], A payment went out yesterday. Is that one going to dishonour? If I am honest with you at this stage [Debtor LH], I don't think one payment is going to stop them cancelling your agreement. I honestly PRAY that your bank statements don't show any silly purchases, Like afterpay, fast food, clothes shops or anything like that. We can talk more when you call in about what will happen next. Kind Regards DDR 66. 23/01/2019 11:08 AM Phone Call XP CALLED WORK - F adv she is hoping client will return next week. adv she has been off due to issues at home. TPC 67. 24/01/2019 10:47 AM Phone Call XP ACCELEON SEARCH - FOUND RELATIVE USING FACEBOOK - CALLED NO ANSWER - SENT SMS. [CS] [Details specified for address, date of birth, email address and phone number] TPC 68. 19/02/2019 11:44 AM Phone Call XP EMPLOYMENT - CALLED - [Details specified for phone number] - No answer TPC 69. 21/02/2019 11:43 AM Phone Call XP CALLED WORK - [Details specified for phone number] - No answer TPC 70. 21/02/2019 11:46 AM SMS XP Hi [K],Can you please ask [Debtor LH] to call me as soon as possible on 0287087244. The matter she has with us is being closed on the 01/03/2019 and this will make her personal situation much harder to manage. Please stress the importance to call so we can try to resolve this. TPC 71. 21/02/2019 11:48 AM SMS XP Hi [L], can you please ask [Debtor LH] to call me as soon as possible on 0287087244. The matter she has with us is going to be terminated on the 01/03/2019, which in turn will make her personal situation much harder. Please ask her to call us as soon as possible to provide the most chance of being able to stop this termination. TPC 72. 21/02/2019 11:49 AM Phone Call XP CALLED WORK - No answer SECONDARY CONTACTS [KH] ( SISTER) [Details specified for phone number] - CALLED NA [LH] ( MOTHER) [Details specified for phone number] - CALLED Left message TPC 73. 22/02/2019 2:15 PM Phone Call XP CALLED BOTH SEC CONTACTS - Went to VM - Left VM on both numbers TPC 74. 22/02/2019 2:17 PM SMS XP Hi [K], can you PLEASE ask [Debtor LH] to call me to provide authorisation for yourself. If not, to call in herself. After the 01/03/2019 i cant help any further and she may be investiagted for other charges. This is extremely serious. TPC 75. 22/02/2019 2:19 PM Phone Call XP CALLED EMPLOYMENT - [Details specified for phone number]- Rang out TPC 76. 25/02/2019 12:00 PM Phone Call XP CALLED SECONDARY CONTACTS - No answer TPC 77. 26/02/2019 12:07 PM Phone Call XP CALLED [K] MOBILE - M answer and adv [K] is in the shower. he will get [K] to call me back. TPC 78. 26/02/2019 12:07 PM Phone Call XP CALLED [LH] - FROM MOBILE - no answer TPC 79. 26/02/2019 12:08 PM Phone Call XP CALLED WORK - Spoke with F, f adv that client is not in as she has been unwell. adv that i called two weeks ago and she wasnt in apparently for the same reason. F adv she can take a message but that is all TPC 80. 26/02/2019 3:49 PM Phone Call XP CALLED [K] MOBILE - Straight to VM TPC 81. 26/02/2019 3:54 PM Phone Call XP [LH] [Details specified for address, date of birth and phone number] CALLED - No answer ( Clients partner) [RK] [Details specified for address, date of birth, email address and phone number] CALLED - Disconnected TPC 82. 28/02/2019 6:11 PM SMS XP Hi [Debtor LH], I am going to try and negotiate the $400, but can you please try and cross paths with your father tonight, or speak on the phone because im not confident on the $400. If you have a lump sum then i am confident that i can get that approved. They are really persuaded by lump sum payments and it shows good faith. PLEASE try and speak tonight and then email me by 9am tomorrow. If i cant get it approved unfortuantely the account is cancelled on the spot and there is no reversing that. DEBT NEG DDR 83. 05/03/2019 12:08 PM Phone Call XP CALLED WORK - NO answer TPC 84. 05/03/2019 12:14 PM SMS XP Hi [K], Could you please ask [Debtor LH] to call me on 0287087244. We have been able to get the issue on her account reversed, on the bases that she pays the $1,000. She advised her father was able to assist ehr with this. I am on a strict time limit and today is the final day that payment can come through. If [Debtor LH] is unwilling to call or unable to , could you please ask her father to call me to make the payment on her behalf. Thank you so much for your assitance. TPC 85. 05/03/2019 12:16 PM Phone Call XP CALLED SECONDARY CONTACTS - No answer TPC 86. 05/03/2019 12:08 PM SMS XP Hi [Debtor LH], I really need you to call me to pay the $1,000. They have withdrawn the termination, however they have FULL intentions to relodge the termination if the $1000 is not paid today. Please dont ignore this. DEBT NEG 0287087244 DDR 87. 06/03/2019 9:33 AM Phone Call XP CALLED WORK - F answered, adv that client starts at 10.30 TPC 88. 18/03/2019 5:52 PM Phone Call XP CLLED WORK - Spoke with female who adv client would not be in until tomorrow. TPC 89. 18/03/2019 5:54 PM Phone Call XP CALLED CLIENT MOTHER - Straight to VM TPC 90. 19/03/2019 9:14 AM Phone Call XP CALLED WORK - Spoke with f, she adv client has called in sick. TPC 91. 19/03/2019 9:20 AM SMS XP Hi [K], Its [Staff XP] from Debt Negotiators. I am having a lot of trouble contacting [Debtor LH], and have not been able to get in contact with her since saving her account. I am a little bit frustrated because i put in a lot of hours (unpaid) because i beleived she wanted the help. Could y ou possibly provide a number for someone who can talk on her behalf, or someone who may be able to shed some light as to why this situation keeps coming up? TPC 92. 14/05/2019 4:36 PM SMS KD Can you please contact debt negotiators on 1300351008, as your debt agreement is about to be terminated. If this happens your creditors can then look at forcing you into bankruptcy. In the process of this you will be investigated to see if you had the capabilities to service your debt agreement/debts, if they determine that you did have the ability to do so then you could be charged with fraud and face up to 12 months imprisonment. Can you please contact the office on 1300351008 so we can avoid this even being a possibility entirely. Regards, [Staff XP] - DEBT NEGOTIATORS DDR 93. 28/05/2019 12:08 PM Phone Call XP CALLED WORK - SPoke with female, asked for Client - Client came to the phone. Adv that she will call me on her lunch break which will be about 1.30. Adv ok TPC 94. 28/05/2019 2:26 PM Phone Call XP CALLED WIORK - F adv that client is on her lunch break and will be for the next hour.adv ok TPC 95. 09/07/2019 2:39 PM Phone Call XP CALLED WOK - F adv client is not in today. TPC 96. 10/07/2019 10:20 AM Phone Call XP CALLED EMPLOYER - Client has not started yet. TPC 97. 10/07/2019 2:48 PM Phone Call XP CALLED EMPLOYMENT - They adv client is on her lunch break and to try her mobile TPC 98. 10/07/2019 2:50 PM SMS XP Hi [K],Could you please call me on 0287087244 when you have the chance? TPC 99. 16/07/2019 4:23 PM SMS XP Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 100. 27/08/2019 1:21 PM Phone Call XP called the work number female advised that client doesnt work there any more. TPC 101. 09/09/2019 12:16 PM SMS KD Hi [L], [Debtor LH] has asked me to give you a call regarding her Debt Agreement. Can you please give me a call back on 1300351008 when you are free? TPC 102. 12/09/2019 8:56 AM SMS KD Hi [L], [Debtor LH] had advised you will be making a $9000 contribution to het Debt Agreement. Can you please call me as soon as possible on 1300351008. TPC 103. 12/09/2019 9:07 AM Phone Call KD Called clients mother [L] - sent email due to no answer - [Debtor LH] PROVIDED AUTHORITY FOR US TO SPEAK TO [L] AND [D] HER PARENTS. TPC 104. 12/09/2019 9:07AM Email KD Good Morning [L], My name is [Staff KD], [Debtor LH] has provided authority for our company to speak with you regarding her Debt Agreement. We had spoken to [Debtor LH] on Monday 09/09/2019 in this conversation she advised her father, [D] would be paying a lump sum of $9000.00 toward the arrears on her account to try and help her get back up to date. We have been trying to contact you to discuss this with you however we have been unsuccessful. Do you have a contact number for [D]? I can contact him directly if you would prefer that. TPC 105. 24/09/2019 12:55 PM SMS KD Hi [L], it's [Staff KD] from Debt Negotiators. My manager has asked me to follow up with you today regarding [Debtor LH]'s Debt Agreement. Please give me a call when you are free, I am here until 6:30pm tonight. TPC 106. 30/09/2019 10:14 AM SMS KD Good Morning [Debtor LH], Your Debt Agreement is now under review for termination. Your creditors are assessing your account history and payments. They will advise if they wish to terminate the Debt Agreement and start looking into proceeding into legal action which may include Bankruptcy or potentially fraud charges. Please call us as soon as possible tostop this from happening. Thank you. DDR 107. 30/09/2019 10:18 AM SMS KD Good Morning [L], it's [Staff KD] from Debt Negotiators. I just need to follow up with you again regarding [Debtor LH]'s Debt Agreement. We have tried contacting her again but she does not answer our calls. We need to know if she wants to account terminated as we are sending another report to the Creditors to let them know. Thank you. 1300351008 TPC 108. 30/09/2019 10:43 AM Phone Call KD ACCELEON SEARCH USING FAMILY MEMBER FOUND ON FACEBOOK - CALLED NO ANSWER - SENT SMS [EH] [Details specified for address and phone numbers] TPC 109. 30/09/2019 10:43 AM SMS KD Hi [E], [Debtor LH] has provided your phone number as a secondary contact. Can you please pass on a msg for her to call A&M Group urgently on 1300351008. Thank you. TPC 110. 30/09/2019 10:45 AM SMS KD Hi [G], [Debtor LH] has provided your phone number as a secondary contact. Can you please pass on a msg for her to call A&M Group urgently on 1300351008. Thank you. TPC 111. 30/09/2019 10:52 AM Phone Call KD ACCELEON SEARCH USING FAMILY MEMBER FOUND ON FACEBOOK - CALLED NO ANSWER SENT SMS TO PASS ON MSG [GH] [Details specified for address, date of birth and phone number] TPC 112. 03/10/2019 4:20 PM SMS KD Good Afternoon [Debtor LH], Your Debt Agreement is now under review for termination. Your creditors are assessing your account history and payments. They will advise if they wish to terminate the Debt Agreement and start looking into proceeding into legal action which may include Bankruptcy or potentially fraud charges. Please call us as soon as possible to stop this from happening. Thank you. DDR 113. 03/10/2019 4:30 PM Phone Call KD Called client and her mother - no answer. TPC 114. 08/10/2019 5:08 PM SMS KD Good Afternoon [Debtor LH], Your Debt Agreement is now under review for termination. Your creditors are assessing your account history and payments. They will advise if they wish to terminate the Debt Agreement and start looking into proceeding into legal action which may include Bankruptcy or potentially fraud charges. Please call us as soon as possible to stop this from happening. Thank you. DDR

Debtor RL (communications 115 to 131) Date Time Type Staff Communication DDR/TPC 115. 16/03/2018 12:42 PM SMS RF Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if thats what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 116. 25/07/2018 11:23 AM SMS SG Your Debt Agreement is now in the process of being terminated. You have not made any payments so your creditors are looking to force you into bankruptcy. Once you have been terminated your trustee will closely examine all of your financial situation and if they feel that you in actual fact had the ability to service your debt, then you could be charged with fraud, facing up to 12 months imprisonment. We really want to avoid this even being a possibility, so we kindly ask that you contact us on 1300351008 to discuss what we should do together to make this work. regards, DEBT NEG DDR 117. 25/09/2018 4:22 PM E-mail SN Could you please contact Debt Negotiators as a matter of EXTREME urgency. Your creditors have requested to terminate the contract in order to commence legal action. PLEASE contact us as soon as possible as they have demanded action to begin this week. Regards, DEBT NEG 1300351008 DDR 118. 25/09/2018 4:22 PM SMS SN Could you please contact Debt Negotiators as a matter of EXTREME urgency. Your creditors have requested to terminate the contract in order to commence legal action. PLEASE contact us as soon as possible as they have demanded action tobegin this week. Regards, DEBT NEG 1300351008 DDR 119. 17/10/2018 12:27 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 120. 17/10/2018 12:31 PM Phone Call KD FOUND CLIENTS MOTHER AND FATHER - CALLED NUMBER THEY ADVISED TO CALL BACK IN 5 MINUTES. TPC 121. 17/10/2018 12:45 PM Phone Call KD Called client on home phone - client is currently living with her parents - client was yelling and screaming at her father while he took the phone call. [J] her father apologised and advised to call back an an hour when he and his wife get home. TPC 122. 31/10/2018 4:24 PM Phone Call KD Called clients parents - they advised they dont know where client went and confirmed her mobile is the same. They think is she staying with someone in [Details specified for address]. TPC 123. 05/11/2018 1:00 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 124. 05/11/2018 1:31 PM SMS KD Hi [C], [Debtor RL] has provided your phone number as an emergency contact. Can you please ask her to call A&M Group urgently on 1300351008 thank you TPC 125. 05/11/2018 1:32 PM Phone Call KD FACEBOOK FRIEND - CALLED NO ANSWER - SENT SMS. TPC 126. 05/11/2018 1:37 PM Phone Call KD Called listed employer - they do not have anyone by that name. TPC 127. 05/11/2018 1:44 PM SMS KD Hi [S], [Debtor RL] has provided your phone number as an emergency contact. Can you please ask her to call A&M Group urgently on 1300351008 thank you TPC 128. 14/11/2018 10:48 AM SMS KD Hi [L], [Debtor RL] has provided your phone number as an emergency contact, can you please ask her to call A&M Group urgently on 1300351008. TPC 129. 14/11/2018 10:53 AM SMS KD Hi [C], [Debtor RL] has provided your phone number as an emergency contact. Can you please ask her to call A&M Group urgently on 1300351008 thank you TPC 130. 28/11/2018 3:51 PM SMS KD Can you please contact debt negotiators on 1300351008, as your debt agreement is about to be terminated. If this happens your creditors can then look at forcing you into bankruptcy. In the process of this you will be investigated to see if you had the capabilities to service your debt agreement/debts, if they determine that you did have the ability to do so then you could be charged with fraud and face up to 12 months imprisonment. Can you please contact the office on 1300351008 so we can avoid this even being a possibility entirely. Regards, [Staff XP] - DEBT NEGOTIATORS DDR 131. 29/11/2018 2:41 PM Phone Call XP EMPLOYMENT LSITED AS : [Details specified for employer and phone number] - CALLED - Spoke with female. F adv client has not worked there for a while. Not sure where she left too. [RW] [Details specified for address and phone number] CALLED Spoke with M, He adv that client does not live at the address on file. He adv client lives in [Details specified for address]. M adv he doesnt know the address off by heart. He adv to call back in 30 minutes to speak with his wife. adv ok .. TPC

Debtor DM (communictions 132 to 149) Date Time Type Staff Communication DDR/TPC 132. 20/02/2018 2:04 PM SMS SN Hi [Debtor DM] [Staff SN] here from Debt Negotiators. Please call us URGENTLY on 1300351008 in regards to your account. I have been contacted by your creditors and they may be looking at terminating your account as you have not made consistent payments towards your debt agreement. To avoid any legal action that maybe occur, please contact us to we can work together. Kind Regards. DDR 133. 24/10/2018 3:58 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 134. 24/10/2018 3:59 PM SMS KD Hi [D], [Debtor DM] has provided your phone number as an emergency contact. Can you please ask her to call A&M Group urgently on 1300351008. TPC 135. 24/10/2018 4:00 PM SMS KD Hi [T], [Debtor DM] has provided your phone number as an emergency contact. Can you please ask her to call A&M Group urgently on 1300351008. TPC 136. 24/10/2018 4:02 PM Phone Call KD ACCELEON SEARCH - FOUND CLIENTS HUSBAND - NEW HOME NUMBER - LEFT MSG. [DM] [Details specified for address and phone number] TPC 137. 27/12/2018 2:46 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 138. 02/01/2019 11:27 AM Email XP Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. TPC 139. 25/03/2019 1:38 PM SMS XP Hi [D], My direct number is 0287087244. I will await your phone call. Kind regards, [Staff XP] TPC 140. 25/03/2019 1:46 PM Phone Call XP Spoke with clients partner - [D] - he adv client is not working and this has made it hard to keep up with payments. He adv that Ezidebit take their dishonour fee's from the account BEFORE the actual payment. Asked why client doesnt call when that happens and pays the remaining $130 ? M had no answer. Adv client to find out how much is remaining on the car loans, and we will need to see if it is a better idea to forfeit/sell the cars to pay off the loan. TPC 141. 11/04/2019 2:33 PM SMS KD Can you please ensure you contact DEBT NEGOTIATORS today on 1300351008. Unfortunately if we do not hear from you we will need to extend our searches to get in contact with you. This means we may need to contact friends, family, Neighbours, work places or even landlords. We do not like going to these lengths, however if that's what it requires we will have to resort to that. Kind Regards, DEBT NEG 1300351008 TPC 142. 07/05/2019 3:10 PM SMS KD Hi [Debtor DM], Can you please contact debt negotiators on 1300351008, as your debt agreement is about to be terminated. If this happens your creditors can then look at forcing you into bankruptcy. In the process of this you will be investigated to see if you had the capabilities to service your debt agreement/debts, if they determine that you did have the ability to do so then you could be charged with fraud and face up to 12 months imprisonment. Can you please contact the office on 1300351008 so we can avoid this even being a possibility entirely. Regards, [Staff XP] - DEBT NEGOTIATORS DDR 143. 12/06/2019 10:43 AM Phone Call KD Called clients secondary contact - no answer - sent sms. TPC 144. 12/06/2019 10:43 AM SMS KD Hi [T], [Debtor DM] has provided your phone number as a secondary contact. Can you please pass on a msg for her to call A&M Group urgently on 1300351008. TPC 145. 12/06/2019 10:53 AM Phone Call KD ACCELEON SEARCH USING CLIENTS SECONDARY - [D] -CALLED LANDLINE NO ANSWER [DM] [Details specified for address, date of birth, email address and phone numbers] TPC 146. 01/10/2019 3:42 PM SMS KD Hi [D], [Debtor DM] has provided your phone number as a secondary contact. Can you please pass on a msg for her to call A&M Group urgently on 1300351008. TPC 147. 14/01/2020 10:44 AM SMS KD Good Morning [Debtor DM], your Debt Agreement is now under review for termination. Your creditors are assessing your account history and payments. They will advise if they wish to terminate the Debt Agreement and start looking into proceeding into legal action which may include Bankruptcy or potentially fraud charges. Please call us as soon as possible to stop this from happening. DDR 148. 14/01/2020 10:45 AM SMS KD Hi [D], can you please pass on a msg for [Debtor DM] to call Debt Negotiators urgently regarding the termination of her Debt Agreement? TPC 149. 19/02/2020 1:32 PM SMS KD Good Afternoon [Debtor DM], your Debt Agreement is now under review for termination. Your creditors are assessing your account history and payments. They will advise if they wish to terminate the Debt Agreement and start looking into proceeding into legal action which may include Bankruptcy or potentially fraud charges. Please call us as soon as possible to stop this from happening. Thank you. DDR