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Victoria to get tough on debt collectors

Organised crime groups and rogue traders will be forced out of Victoria's debt collection business under a planned state government crackdown, while the Australian industry body says there's no evidence of any bad eggs.

Police Minister Lisa Neville on Wednesday announced an overhaul of regulations.

"We'll clean up this industry, like we did with scrap metal - to tackle organised crime and crack down on rogue operators," she said.

The Labor government wants to increase penalties for people who participate in unlicensed debt collection and establish a dedicated commission with oversight of the industry.

It also wants to work more closely with police, Consumer Affairs Victoria and the industry to weed out dodgy operators.

But Australian Collectors and Debt Buyers chief executive Alan Harries told 3AW radio there was "actually no evidence of ongoing issues with poor behaviour by collectors".

Victorian debt collectors are not licensed. They must be aged over 18, not be an undischarged bankrupt, and not have been convicted of a criminal indictable offence in the past five years.

"If they are that then it's up to Fair Trading to stop them as being illegal persons doing debt collection," Mr Harries said.

"I am unaware of any prosecutions against people in this regard. If they were actual proper debt buyers, they would hold an Australian credit licence that is issued by ASIC. It's a very highly regulated industry."

The planned crackdown hinges on Labor's re-election at the November state election.

© AAP 2018