Creditors are entitled to contact you to collect unpaid debts. They can contact you by letter, phone call or home visit.
However they have to act within the law and treat you fairly. If they don't, you can make a complaint.
Rules and regulations for debt collection
The Financial Conduct Authority is the main regulator which covers consumer credit, debt collection and debt management. They publish and enforce rules on how creditors deal with people in arrears.
These rules only apply to debts covered under the Consumer Credit Act, such as credit cards, unsecured loans and overdrafts. Other creditors may use different debt collection practices.
Banks, card providers and some debt collection agencies also sign up to The Lending Code which includes guidance on how to deal with people in financial difficulties.
Many creditors also sign up to trade bodies that have their own guidelines on fair practice. For example, many debt collectors are members of the Credit Services Association who have a code of practice.
Examples of unfair debt collection practices
The following actions are all unfair. We've been providing debt advice for more than 20 years, and in this time we've seen all these activities and more. Some of these are outlawed by industry rules or codes of practice, and some of them are illegal:
- Calling you at unreasonable times
- Calling you at work without permission or after you've told them to stop
- Discussing your debts with a family member or employer
- Taking payments without your permission
- Refusing to deal with advice agencies like us, or not giving you a fair 'breathing space' after you've contacted an advice agency for help
- Pressuring you to pay off a debt by borrowing more money
- Using legal or technical language to confuse you
- Sending letters that look like court forms
- Refusing to give you information about your account when you ask for it
- Pretending to have legal powers they don't have
- Adding unreasonable charges, higher than the actual costs of collecting the debt
- Continuing to contact you for payment when the debt is being disputed
- Continuing to demand payment when a debt is statute barred – meaning the law says the debt is too old to chase through the courts
If you feel you're experiencing any of these actions, or if a creditor is treating you unfairly in any other way, it's a good idea to keep a record of everything that happens. For example, keep a notebook by the phone to log all the calls you get. This will help if you need to make a complaint at a later date.
Additionally some companies lend money without a credit licence. This is illegal and you should get specialist advice rather than making a complaint. Read more about loan sharks for further advice.
We can help
If you're under a lot of pressure from debt collectors, or you're facing any of the unfair actions we've mentioned above, contact us for expert debt help.
Our debt advisors can explain your rights and help you take action if you're being treated unfairly.
Use our online Debt Remedy or call our free helpline on 0800 138 1111 (Free from all landlines and mobiles).