Debt collectors must treat people 'fairly'

Aggressive debt collectors could be reined in under new industry safeguards designed to protect vulnerable customers from being bankrupted over relatively small sums.

A revised Banking Code of Practice released by the Australian Banking Association will from March include new industry guidelines on debt collection and the practice of banks selling debt.

"Under the new guidelines, banks will rigorously audit debt collectors to ensure customers are being treated fairly and with appropriate care," ABA chief executive Anna Bligh said in a statement on Tuesday.

"They'll have the option to buy back debt before any bankruptcy proceedings begin and other significant increases in customer protections."

The new guidelines come after the ABA joined consumer groups in writing to Attorney-General Christian Porter requesting a review of the $5000 threshold for forced bankruptcy.