If you owe money to someone, a debt collection agency may attempt to recover the debt. When creditors like credit card companies and lenders are unsuccessful with debt recovery, they often turn the debts over to collection agencies. For a fee or percentage of the debt, these agencies will call, write, or visit the home of the debtor to discuss repayment.
Debt collection agencies do not have the same rights and authorities of bailiffs, who are also frequently used to collect debts. A representative from a debt collection agency can visit the home but may not enter or take possessions unless permitted by the debtor. If debtors believe they were subjected to harassment by a debt collector, they should first approach the debt collector. If this does not prove successful, they should follow the complaints procedure provided by the lender.
If the result is still not satisfactory, the debtor should file a complaint with their local trading standards office. The Trading Standards Institute is a local authority service. It is not authorized to provide advice but will provide assistance. The Citizens Advice Bureau (CAB) is a national association that provides debt advice, including advice regarding how to deal with harassment from creditors. It works with the Trading Standards Institute to field and filter complaints.
Some collection agencies belong to trade association that requires members to adhere to a code of practice. This association may be able to take independent action against members found to be in violation. Relevant associations include the Finance and Leasing Association, Credit Services Association, and Consumer Credit Trade Association. If a collector is physically threatening, the debtor should limit further interaction and immediately contact the police.[needhelp01]
After following the lender complaints procedure and not receiving satisfactory results, debtors may also complain to the Financial Ombudsman Service. This independent authority helps settle complaints between consumers and the businesses that provide financial services. Each year, the service answers more than one million inquiries and handles more than 200,000 disputes. Consumers who do not wish to accept the decision of an ombudsman can pursue the issue in court.
An independent body called the Financial Services Authority (FSA) regulates the UK financial services industry. Anyone carrying on regulated activities within the financial services and markets sectors must be authorized or exempt. A breach of this requirement may be considered a criminal offense punishable by a fine and/or imprisonment for a maximum of two years.
The ultimate regulator of debt collection agencies in the UK is the Office of Fair Trading (OFT). This federal licensing and regulatory body provides guidance regarding collection of debts. Though these guidelines are not considered law, they are interpretations and summaries of different legal areas.
The OFT does not handle individual cases but its licensing team does log complaints. Debtors should file their complaints in writing through the CAB. If the OFT determines that a debt collector is behaving unreasonably, it can remove the collector’s credit license, prohibiting the firm from doing business in the UK.