Debt Collection Laws
The Office of Fair Trading (OFT) has set out guidelines for creditors to follow when chasing a debtor for repayment.
Although the OFT guidelines are not law, creditors are still expected to follow the guidelines, otherwise, if they are found to be using unfair business practices, they could risk losing their consumer credit licence and in effect, their ability to trade.
The OFT is under obligation to ensure that those who hold consumer credit licences are fit to hold them, if companies show themselves unfit, then they are likely to have their licence revoked.
Common issues people face through debt collection practices include misleading letters claiming they are from courts, telephone harassment, unwarranted threats of legal action and encouragement to borrow money to repay their debts.
Some creditors will try to take advantage of the fact that many people are unaware of what protection a debtor has when facing debt collecting procedures.
Some creditors will threaten visits from doorstep collection agents will visit your home. Do not confuse this with a bailiff, only a court appointed bailiff can enter you home and seize goods.
It is important that if you have found yourself in a position where you are unable to repay your debt that you find out what a creditor can, or cannot do, during recovery proceedings.
The OFT guideline regarding Debt Collection Practices can be found on their website.
If creditors choose to use a third party debt collecting agency to recover monies outstanding, yet the third party debt collecting agency uses unfair tactics to collect debt, then the creditor will also be called into question by the OFT for using an agency who practices unfair tactics.
Examples of unfair debt collection practices include:
- Producing documents which mislead the debtor into thinking they are court documents
- Misleading debtors with information which creates a false impression regarding their position due to lack of knowledge
- Contacting debtors yet not fully disclosing who they are and the purpose of their call
- Unnecessary use of legal and technical jargon to confuse the debtor
- Not providing statements within a reasonable amount of time when requested by the debtor
- Contacting debtors at unreasonable times
- Ignoring reasonable requests of when and when not to contact a debtor (including shift workers plus calls at work that can jeopardise the debtor's job)
- Requesting debtors to call them on premium rate telephone numbers
- Being in debt is NOT a crime and it goes against the OFT guidelines for a creditor or debt collecting agency to make you believe it is
- Creditors and debt collecting agencies are not permitted to harass you for debt, nor are they permitted to cause you unnecessary stress
- They also cannot refuse a payment from you, nor can they refuse to work with a third party elected by you to deal with your financial situation
Call our specialist debt team on 08000 915 004 to find out how we could help you.