Default, Arrears and Debt Collection Agencies

Default on payments

The Consumer Credit Act (CCA) requires certain procedures be followed and specific documentation be provided in the event that two or more payments are missed. Within 14 days of the second default payment, the lender must send you a notice of default to include the following:

  • Exact details of the breach – i.e. how much is owed
  • How this can be remedied – i.e. what action the consumer must take and by when
  • Whether any additional sums of money (default sums) have been incurred as a result and when they must be paid
  • Consequences of further default or inaction
  • Restrictions (if any) on the lender’s right to repossession

The notice of default will not be enforceable if the procedure is not followed in this way by the lender. Furthermore, the goods cannot be repossessed without first serving this notice and waiting for the required 14 days to enable you to respond.

Applying for a Time Order

A further consumer protection measure the Act incorporates is the ability of the consumer to apply for a ‘time order’ from the courts. If successful, this will provide you with a longer amount of time to pay, in the context of your personal situation. To avoid further action from the lender in the meantime, you must write to them advising them of this intention.

Debt Collection Agencies

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. 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.

Leave a Comment

17 comments… add one
  • Carol Mawson 6 March, 2:10 am

    Bought a scooter from ebay. Advert said was working well. Paid £320 through Paypal for this about 5 weeks ago. Seller delivered for £25. On delivery worked once then stopped. Took to mechanic at local bike scooter shop. Told head gasket gone, pistons and alternator, it would cost £300 to fix. Seller refused to refund me, so I threatened small claims court. Please advise my rights and rights purchasing through ebay and paying through paypal.

  • Catriona 9 March, 2:46 pm

    Carol, please ensure question is in correct subject section of the website. You have reduced rights to quality if buying from a private seller. See:

  • Tim 28 April, 4:31 pm

    @Carol: Similar thing happened to me but I was the seller of a fully functional laptop and the buyer claimed it did not work therefore was not fit for purpose. I disputed and had even put in my ad that I didn’t accept refunds and gave no warranties yet paypal refunded his money to him after he opened a dispute and the laptop came back to me.
    Was quite frustrating to be fair as the laptop came back fully functional as I knew it would.
    Long story short, go through Paypal but that doesn’t mean you don’t still have a valid contract under English Law. Paypals dispute resolution can not negate the legalities of the Law, affectively just meaning that you would get your money back, hence the seller could still sue for the money back. If they can be bothered, I couldn’t, but threatened the buyer with legal action to get the money back for my time and expenses and they paid up.

  • nik patel 11 December, 7:04 am

    i had receive a letter from a company called shop direct debt collection,they are saying that i was owing them 457gbp.when i even dint heard about this company before..when i was email them about this fake debt letters they stop sending me letter and i was wondering when i receive the same letter on one of my housemates name after 3months later…

    now they says that we will take you to the court n etc..
    i dont know how they do this to any unknown person..
    even the data th ey have is not right like name n all dat.

  • john fletcher 17 February, 2:42 pm

    fell behind with payments- have had early morning,late evening calls, made a payment plan arrangement and still getting calls, asked to speak to a manager and told they don,t have any, keep telling them to pass info along the line of collegues but calls won’t stop comming – children are now getting calls and getting freaked out as they are very young considering it’s just b4 school or afterthey get in or mealtimes – if not later on at night.what do i do as it is vanquis card company who should know better and wanted me to pay 400 pound at 1 point although i am on benefits now.

  • cj morris 25 June, 2:02 pm

    just a little note i will arrange the payment of this bill but the amount each week that is expected of me is more than i can afford i have other bills that exeed the amount that you want me to pay. but they don’t constantly harrass me daily for payment as your company is doing. i will pay if i have alot more time to pay. does it matter how long it takes to pay as long as you get your money. i am on benefits at moment so i cannot aford the amount required each week. i can aford 5 pounds a week thats it

  • LouLa 26 December, 4:21 pm

    Hello…first time doing this…I need some advice please
    A certain payday company is scheduled to take over a grand from us on our next payday..after speaking with them regarding our lack of money, we tried to set up a payment plan, which they say requires a minimum of £225 to be paid per month (due to interest etc.). This a alot of money each month and we cannot afford to pay this. All they could do was push the full amount (£1000+) to the following payday, but we paid £225 for the privilage..We really need to be released from this viscious cycle but we cannot see a way out. We have more then learned our lesson, what started out as a lifesaver to begin with, is now quickly becoming a nightmare. Please advise!! Another loan is simply not an option 🙁

  • Marcus 21 February, 7:26 pm

    wonder if anyone can provide some advice.
    We purchased a bed frame from a furniture outlet called Uppal Interiors, Stoke on Trent for £400 in May 2012 whilst we were in the area as it was the perfect bed for our new home. We paid in cash and obtained the receipt. We arranged for delivery in September 2012 as we were moving house. They were happy to oblige. We had correspondence from them to arrange delivery in between time and then confirmed a delivery date for 15th September 2012. The frame did not arrive; we tried to contact both Uppal Interiors and the delivery firm (on the details provided through correspondence) but no one answered and there were no message facilities.
    We managed to speak to someone the following day, both companies blamed each other for the bed frame not being delivered (Uppal Interiors claimed that the delivery company delivered the bed frame to the wrong address & the delivery company stated that the bed frame was never on their truck). After many phone calls, over a period of two weeks, we were then told that the bed frame was in there warehouse and the finally they told us that the bed frame had been “lost”.

    It took two weeks of us continually calling them (no one on any occasion called us from the company) we explained that we had moved into a new property and had no bed, so were consequently sleeping on the mattress on the floor. They advised that they would source us our bed frame and in between time would send us an “interim” frame until our one came into stock.

    This interim frame arrived another 2 week later!
    We have made continual contact with them since and they are impossible to get hold of. On the few occasions we did speak to someone they stated that they will let us know as soon as the frame is available. However, for the last 3 months we have not been able to get hold of them at all at any of the correspondence telephone numbers or email addresses we had.

    We sent them an email last month requesting a refund as we had not received the bed frame that we ordered/paid for and the interim frame is in no way comparable both in value and condition. They did on one occasion email back asking to see the receipt (this being the first and only time they had responded to any of our messages/calls/emails). We emailed them a copy of the receipt and have had no response again.

    We drove the 230 mile round trip back to the furniture outlet as we were so fed up to find it was closed. We spoke to near by businesses who informed us that the proprietor seems now to only come to the outlet at random and infrequently. In the window of the store there was a different named company;, so we contacted them and were told that Uppal Interiors are affiliated with them but they could only pass on a message. We decided to go to that companies registered address which turned out to be alike a PO Box and only where they pick up their post. We left a letter once again requesting a refund accompanied with a copy of the receipt.

    We don’t know what other options available to us; can anyone help?

  • LouLa 24 February, 1:05 pm

    Marcus….Watchdog, Rogue Traders?

    • Marcus 24 February, 2:42 pm

      Many thanks LouLa. I’ve just sent them an email.

      • LouLa 24 February, 6:33 pm

        Good luck! 🙂

  • Carolyn 29 May, 11:29 pm

    I bought a Living Social deal for 1-20 copies of De Agostini Cake decorating and after I received them I received another copy of this magazine. I rang their Customer care and told them I did not want it or anymore copies. He gave me an address to send it back to them.
    I did this and have not received any more copies yet they keep invoicing me,increasing the amount everytime. I have rang them and emailed them to tell them my membership was cancelled and owed them nothing but now a debt collector had written to me asking for payment or County Court. What do I do now?

  • alan roberts 5 March, 4:22 pm

    I have received a letter from CCS collect for my daughter jade Roberts account no 447699927.jade does not live at my address anymore and now resides at her mothers at 65 bessingby grove,marfleet lane,hull.thanks.Mr a roberts

  • jim currie 8 July, 12:13 pm

    I wrote a cheque in haste and subsequently by mistake on an old account we did not use. At the Halifax it put my account £4.71 in debt. I know I am responsible for the debt. However it being an old account I gave it no thought. Four years later my wife applied for a mortgage to be refsued for defaulting on £4.71. as you can gather we are now trapped unable to move home and being older (63 ) and wife 55 we are told we will have to wait years for the debt to clear. Thus ending our chances of buying retirement home.
    At no stage did the Halifax inform us that they were going to report the deafult to the credit agencies. There were no charges for going into unauthorised overdraft. The Halifax told me for under £10 no charges would be levied and yet they reported the default. I say if they dont charge then it must be an authorised level. On pushing Halifax they say they are duty bound to report defaults and so if you went 1 p in debt the Halifax would ruin your credit scoring. There must be some logical sense in ruing peoples credit and chances of a home for suck paltry sums. All of the banks refused mortgage but were happy to give out perosnal loand up to £25000. Car companies were happy to enter credit agreement for new car but for £4.71 teh banks will refuse even an explanation about the default.
    I intend to campaign against this absurd practise of ruing lives for loose change. The Banks should remeber how they were let off with billions but they like modern monstrous Shylocks exact their pound and pennies of flesh against citizens of the UK who could explain their mistake quite easily to anyone except bankers and the government

  • Rob 21 July, 10:30 am

    My finance company have not taken a payment from my account for over 6 months, due to a technical issue with their systems. They have written to me a few times to tell me the situation and also that even though the issue is their fault they will extend my agreement out to compensate for the problem that they seem to be having trouble to rectify.
    What are my rights as im not in breach of my side of the contract but they most certainly are?

  • Mansoureh 11 December, 6:25 am

    Girl! Unfortunately, no, a pre-paid debit card will not affect your cridet score. A pre-paid card is not an extension of cridet, which is what is reported on your cridet report and makes up your cridet score. Instead, it’s simply a debit card that’s not tied to a traditional bank account. Most pre-paid cards have VISA or MASTERCARD symbols on them, however, which means you can use them like a cridet card to make purchases online and otherwise.If you’re interested in a card that will help you build your cridet score, your best bet is a traditional cridet card or if you can’t qualify for that, a secured cridet card. A secured cridet card is just like a traditional one, only you must put down a security deposit (typically $200-$500) as an assurance to the cridetor that you will repay your debt. Your activity with a secured cridet card is reported to the three main cridet bureaus, which will affect your cridet score both positively and negatively.To find a card cridet or debit that’s right for you, try credible sites like Bankrate. You can research your options here and find out what’s best for you and your situation. Good luck!

  • Ann 5 October, 3:48 pm

    Opus credit card has registered a default against me. They have made no attempt to contact me have not provided me with a Notice of Default or information on how to correct the breech. They say they have tried to contact me on several occasions through letters, calls and statements but this is a complete fabrication. I have in fact been paying this account to a Debt Collector – Capquest instructed by Opus cards. In their letter to me dated 27 September 2016 they say they did not write to me 28 days before due to systems error. I feel their behaviour is a disgrace and very high handed. Had I received a Notice of Default I would have had the opportunity to pay the amount as it is only a small balance but that has been denied me plus I have been lied to. What can I do