All About Debts

We've discussed already in this Debtsolver blog, the issues surrounding the mis-selling of debt repayment insurance, currently under investigation by the Office of Fair Trading (OFT). Another scandal that's facing the UK, involves the murky practices surrounding the behaviour of some debt collectors.

Debt Help Independent debt collectors are sometimes contracted by creditors, in order to recover bad debt from clients. Since personal debt in the UK exceeded the £ 1 trillion pound mark, attention is increasingly being focused on the issues faced by individuals in debt, and the many companies and services that have sprung up to deal with them. The number of licensed debt collectors has doubled in the last two years,

Your Debts and Debt Collectors You are responsible for your debts. If you fall behind in paying your creditors or an error is made on your account, you may be contacted by a "debt collector." A debt collector is any person, other than the creditor, who regularly collects debts owed to others. This includes lawyers who collect debts on a regular basis. You have the right to be treated fairly by debt collectors.

Counseling Debt A recent study by the UK's consumer watchdog, the OFT, looked at the working practices of licensed debt collectors, acting on behalf of creditors to pursue loan repayments. After a series of interest rate rises and a lull in the property market, more and more people find themselves unable to keep up with their credit card, bank loan or mortgage repayments, and are having to face the uncomfortable prospect of being visited by a debt collector. If such visits were not distressing enough, the OFT has claimed that some debt collectors were overcharging debtors/clients, misinforming them as to their rights, and that some were even threatening clients.

Debt collectors may contact you only between 8 a.m. and 9 p.m. Debt collectors may not contact you at work if they know your employer disapproves. Debt collectors may not harass, oppress, or abuse you. Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime. Debt collectors must identify themselves to you on the phone.

Consolidation Consumer Debt The OFT has issued guidance and good practices advice to debt collectors, and in 2003 looked at how these were being complied with. Unfortunately, they found evidence that in some cases, these were not being adhered to, and indeed, nearly 80 warning letters have been written, and 12 licenses have been revoked or turned down since July 2003.

Among the myriad of problems identified by Naylor was inaccuracy caused by debt collectors. "Inaccuracies can also occur when a creditor sells a delinquent account to a debt collector. Once the original creditor sells the account to a debt collector, the debt collector becomes the furnisher of information on this account to the CRAs. The main source of inaccuracy in this case results from incorrect reporting of the date of initial delinquency on the account."³⁰⁷

Debt Settlement The OFT has carried out a review of practices by debt collectors, and has said it would issue its report in the spring of 2006.

This includes money owed for the purchase of an automobile, for medical care, or for charge accounts. Who is a debt collector A debt collector is any person, other than the creditor, who regularly collects debts owed to others. Under a 1986 amendment to the Fair Debt Collection Practices Act, this includes attorneys who collect debts on a regular basis. How may a debt collector contact you A collector may contact you in person, by mail, telephone,

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The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or at work if the collector knows that your employer doesn't approve of the calls. Collectors may not harass you, make false statements, or use unfair practices when they try to collect a debt. Debt collectors must honor a written request from you to cease further contact.

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