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OFT launches consultation on revised debt collection guidance
10 March 2011
The OFT has today launched a 12-week consultation on its updated Debt Collection Guidance.
The new guidance is designed to:
- confirm it applies to all businesses involved in debt recovery, including creditors as well as debt collectors and purchasers, lenders, law firms and tracing agents
- clarify creditors' responsibilities for the quality and level of information they pass on to debt collection agencies or debt purchase companies
- take account of other new and developing industry practices
- take account of other recently issued OFT guidance, including the updated Irresponsible Lending Guidance, and
- reflect recent changes in the law.
The guidance also sets out specific business practices that the OFT considers to be unfair, such as creditors failing to update records or credit reference agency data, where it has been established that an individual is not the debtor, or the debt has already been paid.
The OFT's aim is to ensure that debt collection is carried out transparently and fairly, and debt enforcement tools are used appropriately, taking into account the individual circumstances of debtors.
The OFT is inviting those with an interest in debt collection activities to respond to the consultation. It will consider all submissions and, where appropriate, reflect these in the final version of the updated guidance.
Ray Watson, the OFT's Director of Consumer Credit, said:
'Unfair debt collection practices can have a real impact on consumers' lives, so it is vital that we identify and root out unacceptable behaviour.
'To improve standards and reduce the risk of the wrong person being pursued for payment, the OFT is providing more clarity on the obligations of creditors, tracing agents and debt recovery firms in ensuring the accuracy of data.
'Companies should not be using irresponsible and unfair practices to recover money.'
Source: oft.gov.uk