Debt Collection Regulations

Debt Agencies

c) Office of Fair Trading (OFT) Debt Collecting Guidance

The OFT published a guidance in January 2000 outlining the Director General’s views on misleading letters and collection charges in relation to licensing under the Consumer Credit Act 1974.

Creditors and Debt Collectors must follow OFT (Office of Fair Trading) Debt Collection Guidance

A copy of the guidance can be read here (PDF format).

The OFT reminded creditors and debt collection agencies that the issue of documents

a) ·resembling a court summons or other official document

b) ·leading the debtor to believe they come from or have the authority of a court

c) ·otherwise containing false or misleading information intended to obtain payment

may be criminal offences under the County Courts Act 1984 and/or the Administration of Justice Act 1970.

Creditors are warned by the OFT under the Guidance that the below practices are considered unfair.

Statements taken from the Guidance has been written in BOLD. The guidance states

"It is unfair to communicate, in whatever form, with consumers in an unclear, inaccurate or misleading manner."

This includes letters that look like court claims, not making it clear who the company is or what their role is, unhelpful legal jargon, not providing statements about the debt when requested, calling at unreasonable times, proving a premium rate number to call,

"Those contacting debtors must not be deceitful by misrepresenting their authority and/or the correct legal position."

This includes claiming to work for the court or be a bailiff, implying action can be taken that is not legal, using a business name or logo that implies they are a government body, implying that court action has been taken when it hasn't, implying not paying debt is a criminal offence,

"Putting pressure on debtors or third parties is considered to be oppressive."

This includes contacting you too frequently, pressurising you to sell property or take out more debt to pay the amount being chased for, using more than one collection company at the same time for the same debt, pressuring you for full payment or in large instalments you cannot afford, making threatening gestures or statements, ignoring disputes about whether you owe the money, contacting family and friends about the debt,

"Dealings with debtors are not to be deceitful and/or unfair."

Examples include sending letters addressed to 'the occupier' or discussing the debt with someone without knowing if they are you; refusing to deal with an adviser acting on your behalf, not accepting reasonable offers or passing on payments you make, refusing to freeze action if you dispute the debt

"Charges should not be levied unfairly."

Examples include claiming collection costs when the original credit agreement did not allow this to happen, not putting specific amounts that can be added for collection costs in the original credit agreement, adding any unreasonable charges.