Creditors are allowed to use reasonable collection activities to try and collect debts that they are owed. These reasonable activities do include things like sending payment demands in the post and contacting you by telephone. Creditors are also allowed to employ debt collecting companies to work on their behalf.
However creditors are not allowed to pressure you to such an extent that their activities become personal harassment. If the volume of collection requests becomes unreasonable, if you receive telephone calls at unreasonable times or demands to make payments that you cannot afford these activities are all considered evidence of personal harassment.
The problem with identifying whether or not a creditor is harassing you is that the situation is subjective. What one person might feel is a reasonable collection activity another might consider to be harassment.
In order to try and identify whether or not you are being the victim of harassment by your creditors the actions that are considered to be reasonable creditor collection activities and those that are considered to be harassment are identified below.
What collection activities are reasonable?
Reasonable creditor collection activities include writing to you with a payment demands and making reasonable attempts to contact you by telephone to agree an affordable payment plan.
If you continue to ignore these attempts to contact you or you are unable to agree a reasonable repayment plan then your creditors are entitled to employ a debt collection agency to try and collect the debt you owe. Collection agencies are allowed to write to you and attempt to contact you via telephone or even send a representative to your home to sit down with you and work out a reasonable repayment plan.
If the attempts of the debt collecting company still result in your non payment of the debt you owe then the creditor can then take court action against you such as applying for a CCJ (County Court Judgement) against you and then an attachment of earnings so that money is taken directly from your wages or a charging order against your property.
Creditors are also allowed to request agreement from the Court to employ a Bailiff or petition for your bankruptcy although these actions are normally only taken to try and recover unpaid Council Tax and if you owe HMRC debt.
What collection activities are harassment?
Although harassment is hard to define as it is such a personal issue generally speaking if the amount of contact from a creditor becomes too frequent and happens at unreasonable times this is considered harassment.
A useful guide to creditor activities that are considered to be harassment was issued by the OFT (Office of Fair Trading) in 2006. All creditors are obliged to follow these guidelines when trying to collect unpaid debts. If a credit is found to be in breach of these guidelines and a complaint is issued to the OFT they could be investigated.
Under the OFTs guidance the following actions by creditors are considered to be harassment:
– Contacting you at unreasonable times (for example at work or late in the evening) even when asked not to.
– Contacting you too frequently
– Pressurising you to pay in full or in large instalments you cannot afford
– Trying to embarrass you in public or threatening to tell a third party about your debts such as your employer, a neighbour or your family.
– Refusing to deal with an adviser acting on your behalf
– Not accepting reasonable offers or passing on payments you make
– Implying action can be taken that is not legally possible such as implying they could take your property (based on non payment of unsecured debt)
Creditor harassment and the law
In addition to the Office of Fair Trading code of guidance banks are obliged to adhere to the law when it comes to the harassment of their clients. Section 40 of the Administration of Justice Act deals with punishing creditors for the unlawful harassment of their indebted clients.