The Fair Trading Amendment (Commercial Agents) Bill 2016 repeals the Commercial Agents and Private Inquiry Agents Act 2004 and shifts responsibility for the regulation of commercial agents from the NSW Police Force to NSW Fair Trading.

"Commercial agent" is a somewhat innocuous term for a debt collector.

Worryingly, this bill removes the need for commercial agents to be licensed, exposing vulnerable people to risk at a time of crisis. This bill effectively deregulates debt collection in New South Wales. It is done under the guise of cutting red tape, but I believe it is at the expense of people who are struggling with debt.

I have spoken in this place before about the destructive power of debt for vulnerable people in this State.

As the cost of living increases—most notably the cost of renting or owning a home—more and more people are put under financial pressure. People are susceptible to even the smallest change in the cost of living, and a minor debt can spiral into long-term financial hardship.

The Bureau of Statistics noted that total household debt stood at $1.84 trillion in 2013. That is a staggering $79,000 for every Australian. It is getting worse. Household debt continues to rise. In 2015 Barclays chief economist for Australia, Kieran Davies, put Australia at the top of the international list for household debt.

Obviously, the threat posed by debt is more severe for poorer households and the most vulnerable in our community, including the elderly, the disabled and the chronically ill.

The community accepts that the Government has a responsibility to protect the most vulnerable in our society. Ensuring that those entrusted with managing and collecting debt are properly licensed and subject to the highest levels of accountability and transparency is the very least that we can do.

Under the current system, a commercial agent or private inquiry agent business owner must hold a master licence and an employee must hold an operator licence. To keep a licence, an agent must undergo specific training, be fingerprinted and prove that they are a fit and proper person for the job. I am concerned that this bill, which removes the need for licences, will create cowboy collectors, empowered to hassle and harass people over debt.

Transferring the regulation of commercial agents from the NSW Police Force to NSW Fair Trading is common sense. The last thing our police need to be wrapped up in is the collection of debt, but it is imperative that we continue to enforce strict parameters on who collects debt and how they do it.

In 2014 the Legislative Assembly Legal Affairs Committee recommended that a negative licensing scheme be implemented for call‑centre based debt collection. A negative licensing scheme allows anyone to participate in an industry but allows for some to be excluded if they engage in behaviour that undermines the integrity of the industry. The committee resolved that a negative licensing scheme would serve to reduce the regulatory burden on the 80 per cent of the debt collection industry operating from call centres.

That means that this measure alone will reduce the vast amount of red tape in the industry. Most importantly, the committee upheld the primary importance of keeping a positive licensing scheme for the 300 or so debt collectors engaged in face-to-face collection—that is, the people who knock on people's doors to collect debt should be properly licensed and trained to manage that sometimes very sensitive interaction.

I am disappointed that the recommendation to retain a positive licensing scheme for face-to-face debt collectors has not become one of the provisions in the bill.

Positive licensing puts the onus on professionals to prove their fitness to deal with debt collection and to interact with the public. It facilitates training to deal with these highly fraught and complex interactions. That is only right.

Here in Parliament it is our burden to ensure that we protect the most vulnerable. Positive licensing would be a simple way to do that. It would protect people at a very difficult time in their lives.

No-one is saying that debt collectors should be social workers, but understanding the complexity and sensitivity of the work they are engaged in should be a principal part of the job.

One need not search far to hear horror stories about debt collection, such as residents being intimidated and harassed about overlooked utilities bills. At the other end of the scale are people who lose their homes because of compounding errors that mount until they are strong-armed out of their homes.

In March this year, Fairfax reported on a Melbourne family that lost its business due to the global financial crisis, and their credit card debt spiralled. They were snowed under by debt until they lost everything. Debt collectors drilled their lock and smashed in their door. The family was left homeless because their debt got away from them.

That family's debt had been purchased by a third party debt collection agency and their house and property were seized without a warrant.

Debt purchasing accounts for roughly 22 per cent of the debt collection market in New South Wales, and it is growing. Introducing a third party in this way, I believe, changes the nature of the work debt collectors are engaged in. They are no longer collecting debt for another party, but rather clawing back debt that they have taken on themselves. It changes the nature of the interaction, and distances debt collectors from debtors and their circumstances. It de-personalises them. It exacerbates the worst impacts of debt collection on vulnerable people.

Unsurprisingly, Legal Aid NSW, the Financial Rights Legal Centre and other stakeholders argue strongly for retaining the current licensing system. Retaining current positive licensing schemes for those agents involving face-to-face debt collection is common sense.

Commercial agents must have a very difficult job. They see people at their most vulnerable and they are often part of an enveloping crisis, like the family I described earlier. It cannot be easy work, and I am sure the majority act with the highest levels of integrity.

But we as a society surely want the right kind of people to engage in this work, and we surely want to make sure that there is accountability and transparency.

This Bill amounts to the Government kicking them when they are down because it makes them vulnerable.

We should not be in the business of encouraging intimidation against people who are already in a tough situation. We know that people in debt often do not understand their rights.

We know they do not often know how to get help or where to go for support. We know that in many cases they are just flat out of options.

I support the shift in responsibility for the regulation of commercial agents to NSW Fair Trading, but express strong concerns about this bill. I support cutting red tape, but when red tape is the only thing for protecting vulnerable people who are in a financial crisis, I think it is a step too far.

Labor will move amendments to protect a positive licensing regime, which I support. I commend the amendments to the House.