Debt Collection Guidance

The Office of Fair Trading (OFT) in the UK provides debt collection guidance to anyone who is involved in debt recovery. The debt collection guidance applies to anyone or any business seeking debt recovery, and covers what the OFT considers to be unfair practices in dealing with debt collections. It should be remembered that debt collection guidance is not just for specialist debt recovery businesses, such as debt collection solicitors, banks or traditional debt collectors. The advice also applies to creditors whose credit control departments pursue outstanding client debts.

If the OFT receives a complaint from a debtor about the approach of a debt collector, and it is upheld, the debt collector risks losing their licence to operate a debt collection service.

There are a number of practices that the Office of Fair Trading considers to be unfair:

Debt Collection Visits

Visiting a debtor’s place of work is considered unfair, unless it is in relation to a business debt. A visit to a debtor’s home is permitted under certain circumstances, but a debtor must be forewarned and if a debt collector at the door is requested to leave, then they must do so.

Vulnerable Debtors

UK debt collectors must ensure that they treat vulnerable debtors fairly, adopting appropriate procedures and practices. People in serious financial difficulties should be treated with care when recovering debts.

Information Responsibilities

Everyone involved in the process of debt recovery, including creditors, is responsible for clear and unequivocal information being maintained and exchanged between parties. This is to guard against the possibility of the wrong person being chased for a debt.

Continuous Payment Authority

The OFT warns against misusing continuous payment authority for recovering bad debt. This includes making repeated attempts to get back a single repayment.

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