If a debt collector has ever threatened to have you arrested, here’s what you need to know right now: a debt collector arrest threat is illegal. Not paying a debt is not a crime in Australia. You cannot be arrested for an unpaid credit card, phone bill, or personal loan. Period. But collectors rely on fear — and the threat of arrest is one of their favourite weapons.

The Law Is Crystal Clear on This

Under the ACCC/ASIC debt collection guideline, a collector cannot state or imply that failing to pay a debt is a criminal matter when no fraud or criminal offence is involved. They cannot threaten to refer you to police when there’s no intention or reasonable basis to do so. And they cannot imply that criminal proceedings will be commenced for non-payment.

In ACCC v McCaskey, a collector threatened to have a debtor arrested by the police or fraud squad if they didn’t pay immediately. The court found this was misleading and deceptive conduct — there was absolutely no basis for such a threat.

Real Court Cases That Prove Collectors Lie

In ASIC v Accounts Control Management Services, a collector threatened to issue a warrant for a debtor’s arrest, get his taxi licence revoked, and stop him travelling overseas. The court found these threats were “calculated to intimidate” and amounted to undue harassment. The Australian Financial Complaints Authority (AFCA) also accepts complaints about exactly this kind of misconduct.

These aren’t isolated incidents. Threatening arrest, seizing assets, or ruining careers are standard scare tactics in the debt collection industry. They say these things because frightened people pay.

You Don’t Have to Be Frightened

If anyone threatens you with arrest over a debt, they are lying to you. Full stop. MyCRA Lawyers is a law firm with a 91.6% audited success rate. If a debt collector has crossed the line — with threats, harassment, or misleading conduct — there are real legal consequences for them and real protections for you.

The bottom line: not paying a debt is NOT a crime. If a debt collector threatens you with arrest, they’re breaking the law — not you. Keep records of every contact, and talk to a lawyer who knows how to fight back.