In the UK the Office of Fair Trading have provided guidelines to Creditors and Debt Collectors on what they consider are fair and unfair practices in the way your debt is collected.
The Office of Fair Trading are responsible for issuing Consumer Credit Licenses, these licenses are what allow companies to lend money to consumers.
The guidelines the Office of Fair Trading set out are expected to be followed by the creditors and debt collection agencies. The guidelines include practices such as collecting an outstanding debt from you, making contact with you and how you should be treated.
If a Creditor or Debt Collector is found to be ignoring the guidelines they risk losing their Consumer Credit License.
As you would expect, the Office of Fair Trading expect that these debt collection guidelines will be adhered to. This post looks at some of the guidelines the Office of Fair Trading set out.
Debt Collection Visits
The OFT considers it unfair for a debt collector to visit your place of work, unless of course the debt is a business debt.
It is acceptable for a Debt Collector to visit your home under the following circumstances: -
- You have agreed the visit or requested one.
- You have ignored the Debt Collection Agency.
- The Debt is deadlocked or disputed.
You must be warned that a visit will take place, and you should be given sufficient time to seek help or advice. You also have the right to ask the debt collector to leave, and they must do so if requested.
A statute barred debt occurs when a creditor has not contacted you for a period of 6 years, and no action has taken place during that time.
The debt is still legally acknowledged as owed, however the creditor is unable to take any further action against you in order to recover the outstanding debt.
It is considered unfair practice if a creditor or debt collector presses for payment when you have stated that the money will not be repaid. In fact this could be considered harassment contrary to Section 40(1) of the Administration of Justice Act 1970.
Unfortunately there are creditors and debt collectors who act outside of this guidance. It is possible that the people doing so are unaware of these guidelines or simply think you no nothing about them. Acting outside the guidelines means that the creditor or debt collector risks losing their Consumer Credit License.
It is unfair for a creditor or debt collector to suggest that criminal action can be taken against you to recover the debt. Being in debt is not a crime.
A creditor or debt collector should not suggest you sell property or borrow more money to pay back what you owe.
It is unfair practice to use more than one debt collection agency at a time to collect your debt.
If you dispute a debt, it is unfair for a creditor or debt collector to continue with recovery whilst the debt is disputed. It is up to the creditor to prove that you owe the debt.
It is considered unfair practice for a debt collector or creditor to refuse to deal with an appointed third party who is helping you with your debts. The only time this would not apply is if the third party is not acting in your best interests. If a debt collector or creditor refuses to deal with a third party, they must provide you with a reason why.
A third party could be a debt management company or debt charity such as Payplan or StepChange Debt Charity.
Communicating with Debtors
When a creditor or debt collector contacts you, they must state who they are, their role and the reason why they are contacting you. This includes contact by telephone, a visit or by letter.
The use of technical language intended to confuse or mislead you is also considered unfair practice.
If a creditor or debt collector refuses to uphold requests of where and when to contact you, this is also considered unfair practice. For example, a debt collection agency calls you at work and you ask them not to because it could affect you job.
Contacting you when you have an illness caused by the situation or where the creditor or debt collection agency know you are vulnerable is also outside of what is considered acceptable. This results in you being placed under unacceptable pressure and is not acceptable.