Consumers to get better protection from inaccurate debt collection proceedings

Posted in 'Dealing with Debt' by Barry Stamp

24 June 2010

The Office of Fair Trading (OFT) is being pressed by the Credit Services Association (CSA) to look more thoroughly at data accuracy within its current, long delayed review on debt collection practices.

It’s vital that the OFT gets its proposed guidance right. Previous guidelines issued in 1998 by the Office of the Information Commissioner, entitled ‘Data Protection Guidance on Debt Tracing and Collection’ backfired a little because the document inadvertently disclosed effective tracing techniques that, prior to publication, many believed to be unlawful, but which the guidance notes endorsed. For example, amongst other things it said that ‘approaches should normally only be made to an employer if the debtor has absconded’ and that ‘it may be legitimate to ask a neighbour if the debtor has moved or continues to live at his or her address’.

The Credit Services Association (CSA) is a trade body representing companies involved in the collection of unpaid accounts, and has long been calling for improvements in current legislation and practices. In particular, it is miffed that the poor standard of data maintained by some creditors sometimes results in innocent consumers being pestered for debt when names are not clear enough.

Banks and credit card companies tend to keep good records of customer names and addresses, but mail order companies and utility companies often rely on initials and surname only, which leads to difficulties in tracing ‘gone-aways’. Complaints about tracing account for the largest number received at the CSA, and in many cases this is caused by poor data quality standards.

Consumers too would benefit from better quality of data, because mail order accounts are also recorded on credit reports, and any failure to keep full names and dates of birth can result in accounts appearing on a credit report that do not relate to the individual, especially if the individual has a relatively common surname.

Even if you think you are unlikely to be bothered by debt collectors yourself, it’s still vital to check the accuracy of your credit report from time to time. Only a small error could see you declined for credit unnecessarily, and it’s easy to remove wrong accounts on your credit report once you have spotted them.

Check your credit report online