Within the UK, the Office of Fair Trading (OFT) is responsible for issuing guidance regarding debt collection practices. This written document outlines what is expected of companies that pursue the collection of consumer credit-related debts. The most recent update to this guidance occurred in October 2011 and includes information for both consumers and agents responsible for collection.
All debt collection agencies are regulated by the Financial Conduct Authority and have permitted debt collection practices. If you are being chased, harassed, or receiving debt collection calls or letters contact us today to see how we can help you.
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Per the Consumer Credit Act 1974, most businesses engaged in lending money to consumers or offering services or goods for hire or on credit must be licensed by the OFT. This agency protects consumer interests by ensuring that a company is fit to hold a consumer credit license. It also provides guidance regarding the form, content, and use of standard debt collection letters. Third-party organizations or advisers can file a complaint with the OFT about debt collection practices of creditors, their debt collection divisions, and third-party debt collection agencies.
The OFT publishes a document that covers what consumers should be aware of when dealing with debt collectors
This explains that missing payments on borrowed money constitute account default and if the money remains unpaid, the account may be turned over to a debt collection agency to collect the debt. Most debt collectors and debt purchasers must hold a consumer credit license from the OFT and consumers can verify this on the Consumer Credit Register.
Debt collectors are expected to contact a debtor at a reasonable time and explain who they are and why contact is being made. If a collector contacts a debtor at an inconvenient time or at work, the debtor has a right to request that the collector call back at a later time or use an alternate telephone number. A collector should not enter the home of a debtor unless invited and must leave if asked. A debtor has a right to request information about the debt including the contents of the original agreement.
Collectors are not permitted to harass debtors with frequent telephone calls or threatening gestures or statements
They should also not pressure debtors to repay debts by borrowing money, selling property, or making full payments. A collector does not have a right to require a debtor to increase payments to more than the amount agreed upon in a repayment plan. In addition, collection charges may not be added to a debt unless the debtor agreed to this with the creditor.
A debt collector and a bailiff are not the same things and a collector should never represent him or herself as a bailiff. A collector does not have as much legal power as a bailiff and cannot forcibly enter a home or seize possessions. Debtors should exercise their rights to complain about collectors when justified. This can be done by contacting the Financial Ombudsman Service.
To prevent debt collectors from calling, consumers should get help with their debts. Debt management plans, IVAs, debt relief orders, and bankruptcy are several ways to handle debts that have gotten out of control. Citizens Advice Bureau, National Debtline, and Debt Advice Foundation are some agencies that provide free and independent advice.