Your rights when it comes to debt collection depends on whether the debt is a consumer (personal) debt or a business (commercial) debt.
The Financial Conduct Authority (FCA) regulates Debt Collection Agencies that deal with consumer credit collections and there are rules and regulations that govern what they can and can’t do.
Debt collectors are not allowed to:
Debt collectors are allowed to visit you in person. There’s no rule against this, but they have no more powers than someone ringing up on the phone, and they have to give you notice of the date and time of the visits. The visitor has to explain who they are and what the reason for the visit is. They cannot enter your property without your consent and they must leave if asked to do so. They cannot visit you at an inappropriate location (unless you have consented to the visit there).
If you feel you are being harassed by a Consumer Collection Agency then the Citizens Advice agency has issued guidance about what you should do next.
While there is no regulatory body for Debt Recovery Agencies that collect business debts, they should follow these guidelines when dealing with cases.
A debt is considered 'statute barred' if the creditor has not contacted the debtor for a period of 6 years and no action has been taken on the account.
Although the debt is still legally acknowledged as being owed, the creditor is not able to take any legal action against the debtor in order to recover the debt. It is considered unfair if a creditor or debt collector misleads the debtor into believing the debt is still legally recoverable. For more information about what to do if you have forgotten to invoice a client please read here.
It is also considered an unfair practice if the debt collector presses for payment after the debtor has stated they will not be paying the money owed. This could amount to harassment contrary to Section 40(1) of the Administration of Justice Act 1970.
Just like for consumer credit, a debt collector that contacts you by phone, letter or visit, must state clearly who they are, where they are from, their role and the purpose of contact. If a debt collector attempts to use unhelpful technical language to confuse or mislead you, this is considered as an unfair practice.
Similarly, it is unfair for a creditor to mislead a debtor into believing legal proceedings will take place when attempting to recover a debt, so if you issue a Final Demand you must then act on it.
Creditors should not use more than one debt-collecting agency at any one time.
If a debtor queries a debt and money that is owed, it is unfair to continue with recovery proceedings during the time the debt is being disputed. If requested, the debt-collecting agency must provide details of an outstanding debt. It is not all up to the debtor to prove they do not owe a debt, is it up to the creditor to prove they do if the debt is dispute
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