Twice already this year, Watchdog has exposed companies chasing people for debts they couldn't prove and wouldn't explain.*It seems we've only scratched the surface as hundreds more of you have told us about your terrible experiences with debt recovery agencies - and lots of them are hounding people for money that they might not even owe.
One of those people is Christopher Fitzpatrick, who's being pursued for £450 by a company called Advantis Credit.*The letters they've sent aren't very clear - in fact they don't even say who the original debt was with.*All they say is that the money is for gas at his old home.
Christopher, however, has definitely paid all his gas bills from that address and has even got a final bill to prove it. In fact, when he moved out, he didn't owe money - he was actually in credit.*
But even though Christopher wrote to Advantis, disputing the debt, they sent him another letter chasing the debt. This breaks Office of Fair Trading (OFT) guidelines that say when a debt's been reasonably disputed, companies shouldn't pursue it while it's being investigated.
We've checked with British Gas who has now been able to confirm that the debt relates to someone else. Chris is angry it was him who was pursued, saying: "I feel it's a scandal. I think we should shine the light on it and expose it to people."
The letters can cause panic attacks
What these companies don't seem to consider is that when letters like these are sent to the wrong people, they can be terrifying.*Sonja Munro is 76 and suffers from high blood pressure, so when another debt recovery company sent her a letter saying she owed £325 it only aggravated her condition. The letter upset her so much her blood pressure went sky high and she*ended up calling an ambulance whilst having a panic attack.
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It was left to her daughter Sue to prove that Sonja didn't owe the debt.*Sue wonders where it would have stopped if she hadn't done that: "When do the people start knocking on the door?*How far would it go if we don't try and stop this?*Who gets hurt?"
A good question. So why aren't debt recovery companies getting their facts straight before sending out*aggressive letters to*the wrong people?*Gareth Thomas is the Minister for*Consumer Affairs. He's said when companies behave like this it can amount to "psychological harassment". So will he rein them in?
When we met him, Gareth told us that he'd been concerned about the debt recovery*sector since the case of Beryl Baizer was brought to his attention. Beryl was a retired woman who eventually committed suicide as a result of the pressure she was under to pay a debt she was only, in a very small part, responsible for. *
Gareth said: "There's a responsibility on the debt collection agency to behave, to follow the law, to respect the code of practices that exist and to use reasonable standards of behaviour.*There's also a responsibility on the businesses that got the debts in the first place to hand over the right information."
The OFT can take action
The Government has recently given new powers to the OFT so that it can take action against these companies. Gareth informed us that the OFT has taken action against the debt collection agency, '1st Credit', who've been told that they've got to raise their standard of performance otherwise they face the threat of either a £50,000 fine or having their license to operate in the industry taken away. This is the 14th company the OFT have taken enforcement action against and there are a series of other investigations in the pipeline.
Gareth agreed that it was a clear warning sign to some of the companies to get their act together and said: "They need to raise their game, they need to raise standards across the industry otherwise further enforcement action can be taken."
Until then more people like Sonja will be sent bullying letters for debts they don't owe.*
Read our debt advice page and download our template letter if you're being asked for a debt you don't think you owe.
Watchdog contacted the companies involved in Christopher Fitzpatrick's case. Advantis told us: "We've reviewed our records on this matter and can confirm that we contacted Mr Fitzpatrick based on information on the electoral roll that suggested that he was present at the address when the debt was incurred. Having now received more information, all collection activity has ceased. We take any allegation of non-compliance to the OFT guidelines very seriously. Having reviewed this case we don't believe that we've breached OFT guidelines."
British Gas said: "We don't believe it's fair to the vast majority of customers who pay their bills to pass on the cost of those who don't. This is why we make every effort to establish who's responsible for unpaid bills. If we're unable to do so, we may pass unpaid debts to third party collection agencies. We'd like to apologise to Mr Fitzpatrick for any concern caused by the letters from Advantis Credit. Neither Advantis Credit nor British Gas will be contacting him again about the unpaid bill."
In response to the OFT action '1st Credit' told Watchdog: "We have an ongoing and positive dialogue with the OFT as we seek constantly to improve our business practices and ensure that the highest standards are met and exceeded. We have, since late 2008, made improvements in our training and processes in all of the areas highlighted, and suggested proposals in response to the OFT requirements which were accepted by them. We continue to seek to improve our processes and welcome the recognition by the OFT of the constructive approach that we've taken in response to the matters raised."
Debt recovery agencies
One of those people is Christopher Fitzpatrick, who's being pursued for £450 by a company called Advantis Credit.*The letters they've sent aren't very clear - in fact they don't even say who the original debt was with.*All they say is that the money is for gas at his old home.
Christopher, however, has definitely paid all his gas bills from that address and has even got a final bill to prove it. In fact, when he moved out, he didn't owe money - he was actually in credit.*
But even though Christopher wrote to Advantis, disputing the debt, they sent him another letter chasing the debt. This breaks Office of Fair Trading (OFT) guidelines that say when a debt's been reasonably disputed, companies shouldn't pursue it while it's being investigated.
We've checked with British Gas who has now been able to confirm that the debt relates to someone else. Chris is angry it was him who was pursued, saying: "I feel it's a scandal. I think we should shine the light on it and expose it to people."
The letters can cause panic attacks
What these companies don't seem to consider is that when letters like these are sent to the wrong people, they can be terrifying.*Sonja Munro is 76 and suffers from high blood pressure, so when another debt recovery company sent her a letter saying she owed £325 it only aggravated her condition. The letter upset her so much her blood pressure went sky high and she*ended up calling an ambulance whilst having a panic attack.
*
It was left to her daughter Sue to prove that Sonja didn't owe the debt.*Sue wonders where it would have stopped if she hadn't done that: "When do the people start knocking on the door?*How far would it go if we don't try and stop this?*Who gets hurt?"
A good question. So why aren't debt recovery companies getting their facts straight before sending out*aggressive letters to*the wrong people?*Gareth Thomas is the Minister for*Consumer Affairs. He's said when companies behave like this it can amount to "psychological harassment". So will he rein them in?
When we met him, Gareth told us that he'd been concerned about the debt recovery*sector since the case of Beryl Baizer was brought to his attention. Beryl was a retired woman who eventually committed suicide as a result of the pressure she was under to pay a debt she was only, in a very small part, responsible for. *
Gareth said: "There's a responsibility on the debt collection agency to behave, to follow the law, to respect the code of practices that exist and to use reasonable standards of behaviour.*There's also a responsibility on the businesses that got the debts in the first place to hand over the right information."
The OFT can take action
The Government has recently given new powers to the OFT so that it can take action against these companies. Gareth informed us that the OFT has taken action against the debt collection agency, '1st Credit', who've been told that they've got to raise their standard of performance otherwise they face the threat of either a £50,000 fine or having their license to operate in the industry taken away. This is the 14th company the OFT have taken enforcement action against and there are a series of other investigations in the pipeline.
Gareth agreed that it was a clear warning sign to some of the companies to get their act together and said: "They need to raise their game, they need to raise standards across the industry otherwise further enforcement action can be taken."
Until then more people like Sonja will be sent bullying letters for debts they don't owe.*
Read our debt advice page and download our template letter if you're being asked for a debt you don't think you owe.
Watchdog contacted the companies involved in Christopher Fitzpatrick's case. Advantis told us: "We've reviewed our records on this matter and can confirm that we contacted Mr Fitzpatrick based on information on the electoral roll that suggested that he was present at the address when the debt was incurred. Having now received more information, all collection activity has ceased. We take any allegation of non-compliance to the OFT guidelines very seriously. Having reviewed this case we don't believe that we've breached OFT guidelines."
British Gas said: "We don't believe it's fair to the vast majority of customers who pay their bills to pass on the cost of those who don't. This is why we make every effort to establish who's responsible for unpaid bills. If we're unable to do so, we may pass unpaid debts to third party collection agencies. We'd like to apologise to Mr Fitzpatrick for any concern caused by the letters from Advantis Credit. Neither Advantis Credit nor British Gas will be contacting him again about the unpaid bill."
In response to the OFT action '1st Credit' told Watchdog: "We have an ongoing and positive dialogue with the OFT as we seek constantly to improve our business practices and ensure that the highest standards are met and exceeded. We have, since late 2008, made improvements in our training and processes in all of the areas highlighted, and suggested proposals in response to the OFT requirements which were accepted by them. We continue to seek to improve our processes and welcome the recognition by the OFT of the constructive approach that we've taken in response to the matters raised."
Debt recovery agencies