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Been contacted by a debt collector?
February 2011
Here are some of the things you need to know.
Why have you been contacted?
If you miss making payments on money you have borrowed, your account goes into 'default' and you will be sent a default notice. If you don't pay the money you owe, the people you owe money to may pass the details of your debt onto a debt collection business. The debt collection business will then contact you and ask you to pay the money that you owe. Sometimes the people you owe money to may sell your debt to a debt purchase business. If this happens, you should be told that your debt has been sold and the details of the business it has been sold to. The debt purchase business may contact you and ask you to pay the money that you owe and/or they may pass details of your debt to a debt collection business.
Most debt collectors and debt purchasers should have a consumer credit licence from the Office of Fair Trading (OFT).
What you should do if you owe the money
Before telling the debt collector how much you can pay back and when, look at your income and expenses. Create a budget and see how much you can afford to pay back and how often. Remember, if you need help with your finances there are a number of organisations, listed below, that can help you.
Once you have looked at your finances, talk to your debt collector right away and keep a record of your communications with them. The debt collector will tell the people you owe money to how much you will be paying and when. You can then start paying money to the debt collector and the collector will give the money you pay to the people you owe.
What you should expect from a debt collector
When a debt collector contacts you they should tell you who they are, who they work for, what their role is and why they are contacting you.
The debt collector should:
• use language you understand
• contact you at reasonable times
• only come into your home if you have invited them to
• tell you the time and date that they will visit you
• during a visit, leave your property if you ask them to
• when sending you a letter, include clear information about who they are and why they are contacting you as well as the process that they are legally allowed to take to get the money that you owe
• provide you with information on your debt, such as the amount you owe
• if you ask for it, provide you with more information about your debt, such as what your original agreement was, and if there were any changes made to it later. For more information on how to request information on your credit or hire agreement.
The debt collector should NOT:
• contact you if you have asked them to speak to someone representing you
• visit you at inappropriate places such as your work, unless you have told them they can
• harass you by calling you frequently or making threatening statements or gestures
• send you letters that do not clearly let you know who they are and why they are contacting you
• pressure you into selling property or borrowing money in order to pay your debt
• pressure you into paying in full or in large instalments
• pressure you to increase your payments to more than you agreed to in your repayment plan
• add collection charges to your debt, unless you agreed to this with the people you borrowed the money from (any amount they charge you should be based on actual costs caused by the collection of your debt)
• threaten to give the details of your debt to others unless they are allowed to by law or tell you that they can take legal action when they actually cannot
• make you think that they are bailiffs. Debt collectors do not have the same legal power as bailiffs and cannot force their way into your home or seize your possessions. Read more on oft.gov.uk.