Article by Barry Stamp - 19th February 2018

Dealing with debt collectors

Don’t think for a moment that you’ll never see a debt collector in your lifetime. Even if you have a sparklingly brilliant credit file, you could find yourselves facing a doorstep collector.

If you have relatively minor arrears on a credit card or personal loan, lenders are increasingly using debt collectors at an earlier stage, probably to address a ‘skills gap’ in their internal collections departments. Even if your lender has lost your credit agreement, and if a court has ruled that the lender is unable to pursue you via the courts, the lender can still (and will) use debt collectors to recover the debt.

Case study: Mrs R’s energy bill

Our customer, Mrs R, moved house many years ago and was surprised to receive a letter relating to an overdue electricity bill for her old address, relating to electricity supply after she had moved. She immediately wrote and queried the matter, obtained the statement from the electricity company and wrote back to say that the bill related to a period after she had left the property.

The next response came from a firm of debt collectors, seeking the overdue £64.75. Mrs R made her first mistake by responding immediately by telephone. She explained the position carefully.

A further letter arrived, demanding money more forcibly and making no reference to the telephone conversation. Mrs R replied immediately, by letter this time, explaining the position again and saying that she regarded the sum as being in dispute.

To her surprise, she then received a warning of legal action from a firm of solicitors.

She responded immediately, again explaining the position carefully, and, because none of her letters to the debt collectors had been responded to, she asked for an acknowledgement within 7 days. She warned the solicitors that in the absence of a response, the matter would be referred to the Legal Ombudsman.

No response has been received to this letter. Instead, a debt collector left a card whilst Mrs R was out, asking her to contact them.

Mrs R is now understandably worried and feels it would be better to pay the £64.75, even though she is not liable to pay it, just to get the debt collectors off her back.

No-one should ever give in to debt collection tactics of this nature if they are not liable for the debt.

What to do if you receive a debt collectors' letter

Consumers are protected by several laws, not least the Protection from Harassment Act 1997. This Act makes it a criminal offence to harass people unfairly. In this example, the conduct of the electricity supply company and its agents (the debt collectors and the solicitors) have taken a course of actions that undoubtedly they ought to have known amounts to harassment.

If you are dealing with debt collectors, here are some helpful hints:

Leave a paper trail

Respond immediately to any debt collection letters and always keep at least two copies of letters received and sent. This will make it easier to prove any conversations going forwards, so even if it’s quicker, don’t be tempted to discuss it over the phone. Send any correspondence by recorded delivery just so there can be no question that they received your letter – it might cost a little more now, but could save you a lot of headache and money in the future.

Talk to them

If they turn up on your doorstep, don’t be afraid of talking to them – they are often well-experienced in judging who a genuine debtor is, and who is being wrongfully pursued. Most debt collectors tend to be female and in their 20s and 30s. Always be prepared to give them copies of your responses, and as per the above point, you can ask for any information in writing as well. But don’t let them in to your house.

Get to know what collectors can and can’t do

Be aware that in addition to the protection of the law that you are entitled to, there are several guidance notes and codes of conduct issued to or adhered to by debt collectors.

Check your credit report

If you are approached for a debt in a similar name to your own, but which you have no knowledge about, it’s a possibility that your name and address has been incorrectly supplied to the debt collection agency by a credit reference agency. Check your credit report to see what link has been made and if an inappropriate ‘association’ or ‘alias’ appears on your credit file. If there is an incorrect alias on your credit report, we can help remove it.

If necessary, take it to Trading Standards

If you receive phone calls or letters after you have told the collection agency of either the disputed liability, or of mistaken identity, report the matter to your local Trading Standards Office. As part of the OFT, they will investigate the matter and in repeated cases will review the Consumer Credit Licence that enables the company to act as debt collectors.

Stay calm

Keep calm if the letters keep coming despite all your attempts to stop them. Remember that debt collectors have no right of entry to your property, and court bailiffs cannot seize your assets without first getting a CCJ (county court judgment) and then applying for further legal action.

Check court summons carefully

If you do receive a court summons, make sure it bears the court seal. It’s a dirty trick used by some unscrupulous debt collectors to send a fake to scare you into payment. Each court will bear a different stamp or seal, so make sure the one you have been sent matches the court purportedly sending it.

If you don’t get a reply, escalate it

If, like Mrs R, you reply to solicitors and don’t get a reply within a stipulated period, report them to the Legal Ombudsman.

Seek a solicitor’s help

If you do receive a valid court summons, go and see a solicitor without delay and talk about raising a Defence with a Counterclaim for damages due to harassment.

If the debt is valid

If a debt is properly due (you do owe the money that the collectors are chasing), pay it as soon as debt collectors become involved; you just don’t need the harassment. If you dispute part of the debt, pay that part of it that you don’t dispute, and write to dispute the remaining amount.

If on the other hand, the debt is not yours, don’t panic, just take advice from the above steps.

If you are having trouble making ends meet and paying your debts on time, visit our Debt Advice Centre for free, unbiased support.

Updated 19/02/2018 by Jamie Mackenzie Smith

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