Working as a commercial agent

On this page

Key information
What commercial agents do
Regulation of commercial agents
Licensing
Disqualification
Commercial agent rules
Accounting and record keeping
Trust accounts

Key information

• In NSW, people working as commercial agents have certain responsibilities and requirements they must meet.
• From 1 July 2022, NSW Fair Trading is responsible for the regulation of commercial agents. Before this date NSW Police regulated commercial agents.
• All commercial agents must comply with the commercial agent rules.
• Only commercial agents who have face-to-face contact with customers (field agents) and employers of field agents need a commercial agent licence.
• Commercial agents who are not field agents do not need a licence. However, they must not be disqualified and must follow the commercial agent rules.

What commercial agents do

Commercial agents act on behalf of a client to collect debts, repossess goods and serve legal documents (known as ‘process serving’) to others.

Learn more about each activity below:

Regulation of commercial agents

Amendments to the Fair Trading Act 1987 commenced on 1 July 2022 to establish a new licensing system and standards of conduct for commercial agents. This Act is supported by the Fair Trading Regulation 2019.

NSW Fair Trading is responsible for the regulation of the commercial agent industry under these new laws.

Before this, NSW Police regulated commercial agents under the Commercial Agents and Private Inquiry Agents Act 2004 (CAPI Act). Private Inquiry agents continue to be regulated by NSW Police.

Licensing and other requirements under the new laws are explained below.

Licensing

If you have face-to-face contact with customers when performing your work as a commercial agent, you need a commercial agent licence. These types of commercial agents are called field agents.

Field agents approach a person and/or visit the place they live, work, own or attend to collect debts, repossess goods or serve legal documents.

You also need a commercial agent licence if you employ field agents.

Commercial agents who are not field agents do not need to hold a licence. However, they must not be disqualified and must comply with the commercial agent rules.

Penalties apply for commercial agents that carry out field activity without a licence. The maximum penalties are:

• $22,000 fine or 12 months imprisonment or both, for an individual, or
• $110,000 fine for a corporation.

Disqualification

A person or corporation can be disqualified from undertaking commercial agent work if:

• the person is under 18 years of age
• the person is an undischarged bankrupt or is taking advantage of bankruptcy laws
• a corporation is the subject of a winding-up order or similar
• the person has been convicted of a relevant offence
• there is an exclusion order against that person
• the person is a member of a criminal organisation.

Relevant offences are listed in the Act and the Regulation. They include violence, harassment, intimidation, weapons, drugs and dishonesty.

Penalties apply for carrying out commercial agent activity while disqualified. The maximum penalties under the Act are:

• $22,000 fine for an individual or 12 months imprisonment or both, or
• $110,000 fine for a corporation.

Commercial agent rules

All commercial agents must adhere to the commercial agent rules, which establish standards of conduct for the industry. Penalties apply if the rules are not complied with. The rules are to protect consumers from harmful or inappropriate behaviour. While commercial agents should familiarise themselves with the full rules available in the Regulation, a general summary is provided below.

Commercial agents must:

• have appropriate knowledge and understanding of the Act and other relevant laws
• act in accordance with client instructions
• not act for any person where to do so would result in a conflict between the commercial agent’s and client’s interests
• take reasonable steps to ensure employees comply with any orders issued by the NSW Fair Trading Commissioner
• not use, or threaten to use, physical force or violence
• not enter a private dwelling without consent
• not use coercive, intimidating or unconscionable conduct
• not carry out debt collection where the debt cannot be the subject of demand
• provide evidence of the debt when requested by the person liable for the debt
• not contact a person outside of reasonable hours or by a method that the person has requested the commercial agent not use when carrying out debt collection
• not misinform, mislead or deceive a person while carrying out commercial agent activity
• not demand or collect payment for the cost of the commercial agent activity from a person who is the subject of that activity. If the commercial agent activity is debt collection, this rule does not limit a creditor who has a right at law to recover their debt recovery costs.
• not disclose to a third party that the consumer is subject to commercial agent activity, unless with the consent of the person who is subject to the debt or as reasonably necessary to carrying out commercial agent activity, or with another lawful excuse
• comply with trust accounting obligations
• keep trust account records in accordance with the rules
• comply with obligations surrounding unclaimed trust money
• not employ or engage disqualified persons
• notify the NSW Fair Trading Commissioner within 7 days of becoming aware that a person employed or engaged to carry out commercial activity is a disqualified person
• take all reasonable steps to resolve a complaint.

If you breach the commercial agent rules, you may be guilty of an offence and can be penalised.

If you are an employer of commercial agents, you can be fined up to $11,000 if you fail to ensure your employees follow the commercial agent rules.

The maximum penalty under the Act is:

• $5,500 fine for an individual, or
• $11,000 fine for a corporation.

Breaching the commercial agent rules may also result in the agent being issued with a restriction or exclusion order. Contravening an exclusion order is an offence and may lead to a penalty.

The maximum penalty is a:

• $22,000 fine or 12 months imprisonment, or both, for an individual, or
• $110,000 fine for a corporation.

Accounting and record keeping

You must deposit all money received from commercial agent activity into an account with an authorised deposit-taking institution. That account must be opened and held by you as the agent for that purpose. Specific requirements also apply where money is held on trust (see below).

You must retain full records of all account transactions connected to commercial agent activity. The records can be held in hard copy or electronic form and must be kept for at least 3 years from the date on which they were created.

Trust accounts

If a client instructs you to hold money on trust, you must pay the money into a separate account that has been opened and held for that purpose.

You must follow a client’s instructions to pay the person the money was held for.

For trust accounts, you must also maintain a chronological record of changes to the name and address of the person who the money is held for, their code reference number and the trust account number.

Unclaimed trust money

If money has been held for more than 2 years in a trust account, you must make reasonable efforts to identify and locate the owner of the unclaimed money and ensure the unclaimed money is paid to the owner.