But the calls kept coming. Different times and numbers, same message.

Pay up, or we'll take your car and furniture. Pay up, or we'll contact Centrelink and start taking your payments. Pay up or you'll go to jail, she says she was told.

Remembering the calls, Ms Crawford first trembles, then sobs.

"They said we can take whatever we want, even your car," she said.

"They shouldn't be allowed to do what they do.

"Now whenever I get a private number call or from a number I don't know, I freak out again."

Observers say Australia's debt collecting industry has done much to clean up its act in the past five years. But there are still small debt shops that act like cowboys, the Financial and Consumer Rights Council says.

"Financial counsellors find dealing with [debt collection company] Panthera increasingly difficult – they seem to have little understanding or appreciation of what life is like for people who want to pay, but cannot," the council's executive officer, Peter Gartlan​, said.

The debt collection firm is at the centre of a lawsuit brought by Ms Crawford and the Consumer Action Law Centre in Victoria's Civil and Administrative Tribunal. Should the lawsuit be successful, there could be more to come, Fairfax understands.

Ms Crawford's original debt of a little less than $3000 was bought by Panthera from AGL, probably for 3 to 6 cents in the dollar (the industry average). They now claim she owes them around $5000, and they allegedly tried to harass the money out of her in a phone call in June 2014.

Ms Crawford is a single mother of a four on a Centrelink pension, and so she told the caller she did not have the capacity to pay. The call went on and on – for 40 to 50 minutes, she says, as the caller allegedly tried to pry money out of her.

Ms Crawford suffers from depression and anxiety, and she says she ended the phone conversation sobbing, shattered. It was not the last. Panthera called her 10 times in the next fortnight, Ms Crawford alleges, sometimes early in the morning, sometimes late in the evening.

ACCC guidelines say debt collectors should contact debtors no more than 10 times a month, and more may constitute harassment.

In her lawsuit Ms Crawford claims Panthera acted illegally, harassing her and telling her it could take her possessions or garnish her income – both of which are illegal, the lawsuit claims.

"While creditors have a right to collect debts, debt collection laws are there for a good reason – we've got to remember that even if someone owes debt, they're still a person," Consumer Action Law Centre chief executive Gerard Brody​ told Fairfax Media.

"They've still got families to feed and lights to turn on and they're often our community's most vulnerable people. The laws exist to ensure that even if you have debt, you are protected from harassment and still treated with basic dignity.

"Where someone experiences distress or humiliation as a result of ongoing debt collection misconduct, they have a right to seek compensation – VCAT can order up to $10,000 in these circumstances."

Panthera denies all the allegations and plans to vigorously defend them. The company has records of the phone calls in question, it is understood. It is a member of the Australian Collectors and Debt Buyers Association, which has a mandatory code of conduct.

"We deny all allegations made against us and will be submitting evidence to the tribunal to this effect if required," a spokeswoman said in a statement.

"We are very aware that the law prohibits us from harassing customers, engaging in threatening behaviour, garnisheeing Centrelink benefits or seizing household goods. We have a number of safeguards in place to ensure this conduct does not occur."

Ms Crawford is seeking $10,000 in damages.

WHAT CAN DEBT COLLECTORS DO?

Debt collection is a highly-regulated industry, with licensed debt collectors tightly bound by legislation and an industry code of practice. So what are debt collectors allowed to do?

• Contact you between 7.30am and 9pm (9am-9pm on weekends) on the phone
• Contact you no more than three times a week or 10 times a month on the phone
• Contact a third party to get location information more than twice a year
• During a face-to-face meeting debt collectors must leave if you ask them to, must not conduct surveillance