Debt Collection Act

The law in the United Kingdom is rather behind many other countries in terms of debt collection legislation in that, as yet, it does not have a specific debt collection act pertaining to debt recovery.

However, the Office of Fair Trading (OFT) has a publication called “Debt Collection Guidance” which was originally published in July 2003 and updated in 2006. In 2011 the OFT, following a period of consultation, again updated this publication.

The original guidance was issued because the OFT, under the Consumer Credit Act 1994, has a duty to make sure that licences for debt collection are only given to those people or organisations who are deemed fit to hold them. This also applies to the retention of those licences.

The updated guidance, though not in itself a debt collection act enshrined in UK law, sets out the standards that are expected of any business involved in recovering consumer credit debts. These businesses include traditional debt collectors, tracing agents, solicitors and banks.

There are a number of unfair or improper business practices that debt collectors must avoid. These include the use of social networking sites such as Twitter or Facebook to get in contact with debtors. Additionally, businesses should avoid contacting debtors at inappropriate locations or at unreasonable times. An inappropriate location may be a hospital, where the debtor is a patient. An unreasonable time may be late at night, or very early in the morning.

Other general guidance aims to protect vulnerable debtors, by stating that UK debt collectors should adopt appropriate procedures and practices in dealing with people in this category. Guidance makes it clear, that there is a responsibility on anyone involved in the process of debt recovery to make sure information given and exchanged with others is of the right quality, and at the right level, to avoid a situation where the wrong person is pursued for a debt.

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