I'm making the assumption you're referring to
Virgin Mobile Australia, and your friend was using their mobile broadband service?
It would be a good idea to have a look at these PDF brochures by the
ACCC and the
ASIC:
For the first document ("Debt collection guideline reprint 2010.pdf"), it might be worthwhile to look at page 17.
For the second document, I'd focus on page 13 onwards.
Of course, the debt collecting company is allowed to collect personal information to settle debts (and they are also obligated to keep the information they have secure and
up-to-date), but whether or not you could initiate a litigation probably depends on how and where they collected this information (you may be able to pin on them the fact that they lied in regards to the address issue on the contract). It would be good to look at the
National Privacy Principles.
For the record, my knowledge about these kinds of issues is limited to what is available out there on the Internet, and it would be a good idea to get a second opinion from a professional in law. Your first port of call would be Virgin, and if you don't get a satisfactory response, then it would be best to escalate the issue and bring to the attention of the
Telecommunications Industry Ombudsman.