Debt collection agencies have been put on notice by consumer watchdog the Commerce Commission after it warned one company about its actions amid a spike in complaints about the industry.

The commission said it had warned Intercoll it had likely breached the Fair Trading Act after the company told a debtor that if she wanted to question her debt she would need to contact the company she originally owed money to.

"The debtor was told that she needed to pay Auckland-based Intercoll the disputed amount, and if the dispute with the original lender was successful, then Intercoll would pay the money back," the commission said in a statement.

But that was not true because Intercoll had bought the debt and the woman who owed the money should have been able to dispute it directly with the company.

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The commission also warned Intercoll off making statements which gave the impression that court action was inevitable if the debtor did not pay up when it was only a possibility.

Unless the creditor has approved the debt for collection through the courts, the commission said that claims may mislead consumers about their position.

Intercoll did not wish to comment when contacted by the Herald today.

Commissioner Anna Rawlings said complaints about debt collection had increased in the past year and debt collectors needed to ensure they had systems in place to comply with their legal obligations.

"While debt collectors often need to discuss the nature of a debt and the consequences of non-payment with a debtor, they must not use misleading techniques to pressure debtors into paying or to deter them from pursuing genuine disputes.

"This includes saying that a debtor cannot dispute a debt, telling them that court action will commence within a certain timeframe when it may not or giving the impression that certain outcomes are inevitable if they are not," she said.

In the year to June 30, the commission received 125 complaints about 37 different debt collection agencies.

That was up from 98 complaints about 33 different debt collectors in the previous year to June 30 2017.

Rawlings said while debtors need to pay any overdue debt it is also important they were not misled when it came to debt recovery.

"If consumers want to dispute their debt, we suggest they contact the debt collector early to find out what the disputes process is before any problems escalate.

"If there is a genuine dispute over the debt, the debt collection process should stop while this is resolved," she said.