In a significant legal development that has sent ripples through Australia's financial services sector, criminal charges brought against prominent debt collection firm Panthera Finance have been dismissed by the Melbourne Magistrates Court.
Court Rules on Technical Definition of Debt Collection
The case, which concluded on Tuesday, saw Magistrate Michelle Hodgson dismiss all charges against Panthera Finance after the company successfully argued it was not technically engaged in debt collection as defined by Australian law. The court also ordered Consumer Affairs Victoria to pay costs, though the exact amount remains to be determined.
This legal victory comes despite a 2020 Federal Court ruling that found Panthera Finance had unduly harassed three consumers for debts, resulting in a $500,000 fine. Consumer Affairs Victoria had launched criminal proceedings based on that earlier ruling, arguing it made Panthera a "prohibited person" under the state's debt collection regulations.
Legal Technicality Proves Decisive
The case turned on a technical interpretation of what constitutes debt collection under Australian law. Section 3 of the Australian Consumer Law and Fair Trading Act defines a debt collector as someone who "for remuneration or reward" will "collect, attempt to collect, or request payment of, debts owed to another person."
Panthera's legal counsel argued successfully that because the company had acquired the debts it was attempting to collect, it was not technically collecting debts owed to third parties. Instead, the firm was collecting debts that it now owned outright.
Magistrate Hodgson emphasised that she could only consider the elements of the definition outlined in the act "and that act alone." She noted that "parliament has used a definition based on who the debt is owed to," which proved crucial to the outcome.
Company Leadership Welcomes Decision
Georgina Antoun, chief executive of Francom Group, which purchased Panthera Finance in December 2024 after it was placed in administration by financial backers Brookfield, welcomed the court's decision. She stated that the ruling provided certainty to "our customers, clients and employees."
"Francom is determined to see through its desire to transform the perceptions of the debt collection industry," Antoun said. "We are passionate about supporting customers with vulnerabilities, educating our team about how to best inform customers about the long-term impacts of debt and helping unlock financial freedom for all."
The case had drawn significant attention following a Guardian Australia investigation that revealed the company had sought to circumvent the blacklisting by using a related entity, claiming it was "business as usual" despite the federal court order.
At the time the proceedings were launched, the regulator emphasised that action was necessary to ensure debt collection activity in the state remained lawful, noting that people facing financial challenges "can be very vulnerable to poor debt collection practices."
It's worth noting that Francom Group itself was not accused of any wrongdoing in the proceedings, having acquired Panthera Finance after the events that led to the original federal court case.
