You're on TV! Now pay up

Posted by Arron Dickens in Dealing with Debt on 25 June 2013 - Arron is a Product Manager at checkmyfile

Two separate companies have this week been hit with penalties by The Office of Fair Trading (OFT) – the government body that exists to look after the best interests of consumers. We look at the punishments handed down and whether these companies have been 'made examples of’ because of their television exposure.

Last month Channel 4 aired a show called ‘Repo Man’. The show followed the head of debt collection firm ‘Donegal Investigations’, as he undertook repossession work on behalf of car finance companies. The program showed Sean James and his team of collection agents meeting customers, to either take payment for arrears or collect the vehicles. Obviously this kind of work requires a certain amount of ‘assertiveness’ and an attitude not to accept excuses from customers.

The company itself states on its website: "a no holds barred approach when collecting assets, if you want a job doing right then we are your men"

The OFT has announced that it has suspended the credit license of Donegal Finance Limited, the parent company covering all aspects of Sean James’ business. This means that it is a criminal offence for the company (or anyone involved) to participate in credit related activities, including debt collection. The OFT has used new legislation to suspend the license immediately; previously it was required to undertake lengthy legal proceedings before taking action.

An OFT spokesman said: "Our decision demonstrates that we will not hesitate to use our new power to suspend a license when it is urgently necessary to protect consumers from risk of immediate harm.”

Clearly the OFT feels that the company has been intimidating customers for payment and has reacted to the complaints received. How much of this is down to the exposure of the company on television is unclear, but it is likely the OFT could not be seen to allow the tactics to continue when highlighted by the Channel 4 show.

This does raise a number of important questions. If the company has acted like this for a number years, and most likely isn’t the only culprit, why has the OFT not revoked the credit license previously? Why also has it not undertaken a wider review of the industry, which should have revealed if intimidation and illegal tactics are being used by other companies? It is hard to believe that the OFT doesn’t receive regular complaints about these ‘repo’ companies.

The Information Commissioner’s Office (ICO) has also been wielding its power this week, handing down a large fine to Swansea-based ‘Save Britain Money Ltd’. The company is the focus of the BBC3 program ‘The Call Centre’ which is currently being aired. The fly-on-the-wall documentary series follows the ups and downs of CEO Nev Wilshire and his staff of extroverted cold callers.

Fines totalling £225,000 were issued after the companies were found to be responsible for more than 2,700 complaints to the Telephone Preference Service (TPS) or the ICO between May 2011 and December 2012. The company have said they will be issuing an appeal against the decision, refuting claims that people registered with the TPS were being called unlawfully.

The ICO's director of operations, Simon Entwisle, said: "While the activities of Nev and his call centre employees have provided entertainment for many, they hide a bigger problem within the cold calling industry People have the legal right not to receive marketing calls and these companies have paid the price for failing to respect people's wishes."

It may be the case that the ICO is making example of this company, in part to reveal a bigger problem within the cold calling industry. Companies who are working in the debt collection or cold calling industries are clearly not going to garner much support with the public. Flaunting their practices on television shows however (whilst it certainly makes interesting television), is clearly going to draw attention and result in complaints to their respective regulatory bodies.

One thing is for sure - a certain Angela Rippon OBE will be smiling today.

Ben Ryland is a Credit Analyst at checkmyfile. He has a degree in International Business and Management from Aston University. He can be contacted at ben.ryland@checkmyfile.com

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