Debtor disputes — how to handle them without losing the debt
When a debtor raises a dispute, the wrong response can lose you the recovery and trigger a regulator complaint. Here's how to handle disputes properly.
Debtor disputes — how to handle them without losing the debt
Under the ACCC/ASIC Debt Collection Guideline, you must pause collection activity while a genuine dispute is being investigated. The trick is telling "genuine" from "stalling" — and documenting both.
What a genuine dispute looks like
- Specific to the debt: "I never bought this", "the amount is wrong", "the service wasn't delivered".
- Newly raised: not a stalling tactic that appeared after weeks of ignoring you.
- Backed by something: invoice copy, photo, witness, document.
What stalling looks like
- Vague: "I disagree", with no specific basis.
- Repeating after each escalation step.
- Demanding documents you've already sent.
- Raising a wholly new dispute every time the previous one is resolved.
What you must do during a genuine dispute
- Pause collection activity within 1 business day.
- Document the basis of the dispute in writing.
- Investigate within 21 days.
- Communicate the outcome in writing.
- Resume collection only if the dispute is unsubstantiated.
What you can do during stalling
A dispute that's clearly stalling — same issue raised three times after each resolution — can be treated as resolved. But document the prior responses meticulously, because if it lands in front of AFCA later, you'll need to show your reasoning.
Routing in a recovery workflow
Good platforms route disputes back to the originating creditor for resolution, not into the recovery operator's lap. Adeva Plus does this automatically — disputed cases pause, route, and only resume on documented resolution.