If you are in debt and allow credit card and other bills to go unpaid, you may soon be dealing with a debt collection agency. In the UK, the Office Of Fair Trading (OFT) monitors the behavior of debt collectors. This regulatory capacity includes the issuance of guidance for parties attempting to recover debts resulting from consumer hire agreements or consumer credit. The most recent OFT debt collection guidance was created in October 2011 and states what is expected of all parties pursuing debts related to consumer credit.
Per the Consumer Credit Act 1974, the OFT must license most businesses that provide goods or services for hire or on credit or who lend money to consumers. July 2003 marked the first time that the OFT provided guidance regarding debt recovery activities. Third party organizations and advisers may file complaints with the OFT regarding debt collection practices of collection agencies, creditors, or creditor debt collection units.
Consumers are provided separate debt collection guidance by the OFT. The document educates consumers about why they may be contacted by a debt collection agency and what they should do if they owe the money. It also outlines what consumers should expect from debt collectors. This includes being informed of who the collector is, whom the individual works for, the role of the collector, and the reason for making contact.
Collectors are expected to contact consumers at reasonable times and only enter the home if invited. They should pre-schedule home visits and leave the property when asked. Collection letters should include details regarding the collector, reason for contact, and legal process for collecting the debt. A collector should always provide basic information regarding a debt, including the amount owed. Upon request, collectors should provide additional information such as the contents of the original agreement and whether it was altered.[needhelp01]
Debt collectors should not harass consumers with frequent phone calls or make unauthorized visits to locations like the workplace. They should never make statements or gestures that could be interpreted as threatening. Consumers should never be pressured into increasing payments to more than outlined in repayment plans, paying in full, or borrowing money or selling property. Debt collectors do not have the legal power of bailiffs and should never make consumers think they are bailiffs or have equivalent authority.
If consumers feel they have been subject to this or other forms of harassment by debt collectors, they can take action. They should first contact the creditor or its collection representative with their complaint. The entity has an eight-week period to review and respond to the issue.
If the outcome is not satisfactory to the consumer, the Financial Ombudsman Service should be contacted. This independent organization helps settle disputes between consumers and businesses that provide financial services.
After a complaint form and relevant documentation are submitted to the Financial Ombudsman Service, the issue will be investigated. The organization has official authorization to settle financial complaints and makes its determinations on a case-by-case basis based on the facts. A decision made by an ombudsman is final.