After a debt collecting company recently had it license to operate removed by the OFT, we consider your rights if you are contacted by a debt collector.

A debt collection agency based in Dartford, Kent called Carltons Business Limited has recently been forced to stop trading after an Office of Fair Trading (OFT) decision to take away its license was upheld by the court. It is a criminal offence for a debt collector to continue to trade without a consumer credit license.

The court made clear that debt collectors must comply with the OFT guidelines about how they should operate. If they do not do so, they too will then risk losing their license. So what are your rights when dealing with debt collectors and what are their operating guidelines?

Payment demands from debt collectors must be fair

If you are contacted by a debt collector you should make sure that you make a reasonable offer of payment based on your surplus income. This should be calculated by deducting your reasonable living expenses from your income.

You should be prepared to share your living expenditure information with the collector. Having done so and given that your offer is reasonable this must be accepted them.

BMD Tip: Debt Collectors cannot pressure you into paying in full or in larger instalments which you are unable to afford and they are not allowed to pressure you into selling property or borrowing money in order to pay more towards your debt.

What if a debt collector contacts you by letter?

Debt collecting companies will normally write to you demanding that you catch up on late payments or start paying if you are not currently doing so. However any letters you receive must be writen in normal language which you can understand.

It must be clear from the letter who it is from and why they are contacting you and provide you with information about your debt such as the amount you owe. Neither collectors or creditors themselves are allowed to send letters to you which are made to look like official letters from the court or a lawyer.

BMD Tip: Payday loan companies have often be accused of using these practices. Since this article was written Wonga has been made to pay £2 million compensation to customers which it contacted by letters which gave the false impression they had been sent from a legal firm.

Are you receiving letters and phone calls from a Debt Collector? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

What if a debt collector contacts you by phone?

If you are struggling to pay your debt you must expect that a collector will try to make contact with you by phone. During these phone calls you may often feel intimidated or threatened. However the guidelines about how you should be treated on the telephone are clear.

When speaking to you collectors are not allowed to threaten to give the details of your debt to others or tell you that they can take legal action when they actually cannot. They are only allowed to contact you at reasonable times and they must not harass you by calling you frequently or making threatening statements.

If you have instructed a debt management company to act on your behalf you must tell any collector who contacts you that you want them to deal with whom ever is representing you. Once you have done this the collector must not contact you any more directly.

Can a collector come to your home?

A debt collector may try and visit you at home to discuss your financial situation and agree a repayment plan with you. However if they do arrange to visit you they must warn you in advance of the time and date when they will call so you are not taken by surprise.

Debt collectors are not Bailiffs and they cannot come into your home if you have not invited them to. This means that although many collectors may tell you that they will send someone round to your house to see you they will very rarely do so.

BMD Tip: If you do invite a collector into your home, they must leave your property immediately if you ask them to.

Be prepared to complain

You should try to deal reasonably with and collector that contacts you legitimately and do everything you can to make a offer of payment based on what you can afford.

However if you feel that the actions of the collector are in breach of the the guidelines outlined above then they could be guilty of harassment and you should be prepared to complain.

With the OFT ready to remove the license of any debt collecting company that they do not feel is following their collection guidelines, you should be able to change the collectors behaviour very quickly.