Debt collection is big business. As the use of Debt Collection Agencies (DCAs) increases, so have the number of complaints from the general public regarding the underhand, intimidating and often unlawful practices they are resorting to. Complainants also cite frequent examples of being mixed up with debtors who used to live at the address where they are currently living.
While there are still no laws governing what DCAs can and cannot do, the OFT have produced guidelines in relation to acceptable and unfair practices, breach of which may result in revocation of their licence. The OFT regard the following practices to be unfair practices:
- Frequent and / or threatening phone calls
- Being contacted at unreasonable times
- Refusing to deal with the debt advisor and contacting the debtor directly
- Failing to investigated disputed debts
- Threatening court action and not describing the process accurately
- Pressurising debtors to pay in full, in unreasonably large instalments, or to increase payments when they are unable to do so
- Requesting the debtor takes on further borrowing to finance a repayment
Remember that DCAs are not bailiffs and have no right to enter your home or visit your place of work. You are within your rights to ask them to leave and they must do so. They may only visit you at home where you have been given reasonable warning of a visit and have been given the opportunity to take legal advice beforehand. Where you have engaged the services of a debt management company to manage your debt and negotiate with creditors on your behalf, you can insist that DCA deal only with them, and not with you directly. If you query or dispute a debt – and remember it is your right under s 77-79 to request to see your credit agreement and statement of debt from the creditor, then the DCA must not continue with debt recovery activities during this time.
How to report DCAs for unfair practices
If a representative from a DCA approaches you in a threatening or inappropriate manner, if he/she gives you misleading information, or make unreasonable requests, or if they communicate with you in a way which has been communicated to them as being against your wishes, then they may be engaging in unfair practices. The creditor is responsible for ensuring that the DCA they use are professional, ethical and fair. You are able to report both the creditor and the DCA to the OFT via their complaints form. If your complaint is upheld and the OFT find them to be engaging in unfair practices, they can revoke their licence to prevent them from trading any further.