Nexa Collections

Debt Collection Laws of UK

Debt collection in the United Kingdom is regulated by several different pieces of legislation and regulatory bodies. These include:

  1. The Financial Conduct Authority (FCA): The FCA regulates consumer credit and has guidelines that debt collection agencies must follow. These rules focus on treating customers fairly and collecting debts in a reasonable and compassionate manner.
  2. Consumer Credit Act 1974: This legislation governs most of the credit agreements in the UK. It provides rules about the information that must be included in credit agreements and outlines the rights of borrowers.
  3. The Consumer Rights Act 2015: This law gives consumers rights regarding goods and services purchased, including the right to a refund, repair, or replacement in certain circumstances.
  4. The Limitation Act 1980: This Act sets out the time limits within which a creditor can pursue a debt. Generally, the limitation period for pursuing a debt in the UK is six years, although this can vary depending on the nature of the debt.
  5. Data Protection Act 2018: Debt collectors must comply with this Act, which governs how personal information is handled and used. They must ensure that any data they hold or process is used lawfully and transparently.
  6. The Protection from Harassment Act 1997: This legislation could be applied to debt collectors if they harass the debtor. Harassment could include things like making threats, calling at unreasonable hours, or making contact too frequently.
  7. The Taking Control of Goods Regulations 2013: This regulation sets out the procedures that must be followed when taking control of goods to enforce a debt.
  8. The Insolvency Act 1986: This governs insolvency procedures and the circumstances in which a debtor might be declared bankrupt. It also includes provisions regarding Individual Voluntary Arrangements (IVAs) and Company Voluntary Arrangements (CVAs).
  9. The Equality Act 2010: Debt collectors must also consider the Equality Act, ensuring that they do not discriminate against anyone on the grounds of age, disability, gender, etc.
  10. The Unfair Terms in Consumer Contracts Regulations 1999: This sets out rules for fairness in consumer contracts and could apply to some credit agreements.
  11. The Consumer Protection from Unfair Trading Regulations 2008: This prohibits unfair commercial practices, including aggressive and misleading practices.
  12. The Electronic Commerce (EC Directive) Regulations 2002: This relates to businesses that sell goods or services over the internet or by email, including some debt collection agencies. It sets rules for information that must be provided and the technical processes to be followed.

Things Debt Collectors can do in UK

Here’s what they can do, within the confines of the law:

  1. Contact You About the Debt: Debt collectors can contact you via phone, email, or letter to ask you to pay the debt. However, they must not contact you at unreasonable times and they should respect your preferences about how and when to be contacted.
  2. Offer Repayment Plans: Debt collectors can offer you repayment plans to make it easier for you to repay the debt. They should take into account your financial situation and ability to repay.
  3. Take You to Court: If you don’t pay your debt, debt collectors can take you to court. If the court rules in their favour, they may get a County Court judgment (CCJ) against you, which could result in bailiffs being sent to your home or money being taken directly from your wages or bank account.
  4. Use Enforcement Agents (Bailiffs): If they have a CCJ, high court judgment, or other court order against you, they can use enforcement agents, also known as bailiffs, to take control of your goods and sell them to repay the debt.
  5. Sell the Debt: Debt collectors can sell the debt to another company. If this happens, you will owe the debt to the new company.
  6. Report to Credit Reference Agencies: Debt collectors can report unpaid debts to credit reference agencies. This can harm your credit rating and make it harder for you to get credit in the future.

Things Debt Collectors cannot do in UK

The above legislation and bodies have laid down certain rules which must be followed by debt collectors in the UK. For example:

  • They must treat debtors fairly and not use aggressive practices, coercion, deceit, or be oppressive or unfair in any way.
  • They should provide clear information that is not misleading and use language that the consumer can understand.
  • They must give consumers a clear idea of the process, what the next steps are, possible outcomes, and any costs or penalties involved.
  • They cannot contact debtors at unreasonable times or in an excessive manner.
  • They cannot harass the debtor or put undue pressure on them.
  • They should consider whether the debtor is particularly vulnerable.

Filing a complaint against Collectors

The Financial Ombudsman Service (FOS) in the UK provides a way for consumers to resolve disputes with financial businesses. If you have a complaint about a financial product or service, you must first raise the issue with the business itself. If they don’t resolve the issue to your satisfaction, you can take your complaint to the FOS. Here’s a step-by-step guide on how to file a complaint with the FOS:

1. Complain to the Business First: Before the FOS can look into your complaint, you must give the business you’re unhappy with the opportunity to resolve the issue. You should contact them, clearly explaining the problem and how you’d like them to put it right.

2. Wait for the Business’s Response: The business has eight weeks to respond to your complaint. If they don’t respond within this time, or if you’re unhappy with their response, you can take your complaint to the FOS.

3. Contact the FOS: If you want to take your complaint to the FOS, you must do so within six months of the business’s final response (or from the end of the eight week period if they haven’t responded).

You can contact the FOS in a number of ways:

  • Online: You can fill out the complaint form on the FOS website.
  • By post: You can print and fill out the complaint form and send it to: The Financial Ombudsman Service, Exchange Tower, London, E14 9SR, United Kingdom.
  • By phone: You can call them on 0800 023 4567 or 0300 123 9123.
  • By email: You can email the complaint form to complaint.info@financial-ombudsman.org.uk

4. Provide All Relevant Information: When you contact the FOS, you should provide as much detail as possible about your complaint, including your contact details, the details of the business you’re complaining about, a summary of your complaint, and details of any financial loss you’ve suffered. You should also include any evidence you have to support your complaint, such as copies of letters, emails, or photos.

5. FOS Will Review Your Complaint: Once you’ve submitted your complaint, the FOS will review it. They might contact you or the business for more information. They will then make a decision based on all the information they’ve received.

6. Accept or Reject the Decision: If you accept the FOS’s decision, it’s binding on you and the business. If you reject the decision, you can take your complaint to court instead. However, court processes can be costly and time-consuming, so this should be considered carefully.

Remember to keep copies of all communication you have with both the business and the FOS. If you need help making a complaint, you can contact organizations like Citizens Advice for assistance.

Please note that the specifics of the laws can change, so it’s important to check the most recent legislation or seek legal advice if you are dealing with a debt collection issue.

Popular Collection Agencies of UK

Here are some of the top debt collection agencies operating in the UK:

  1. Lowell: Lowell provides a range of credit management services and is one of the largest debt purchasing and collection companies in the UK.
  2. Moorcroft Debt Recovery Group: Moorcroft is one of the UK’s leading debt collection agencies. They work with many different sectors including finance, utilities, telecoms, and more.
  3. Bristow and Sutor: Established in 1977, Bristow and Sutor specialize in council tax and business rate collection. They work on behalf of local authorities and HM Courts & Tribunals Service.
  4. Pastdue Credit & Debt Solutions Ltd: A well-known collection agency in the UK, they offer debt collection, credit management, and tracing services.
  5. Wescot Credit Services Ltd: One of the leading providers of receivables management services in the UK, they work across a variety of sectors, including banking, utility, telecoms, and retail finance.
  6. Credit Style: This agency offers a range of services including debt recovery, credit management, and legal support.
  7. Fredrickson International Ltd: Part of the Lowell Group, Fredrickson International Ltd is one of the leading debt collection agencies in the UK.
  8. PRA Group (UK) Limited: PRA Group is a global leader in acquiring and collecting nonperforming loans. They serve a wide range of sectors.
  9. Drydensfairfax Solicitors: They offer a range of services including debt recovery, litigation, and asset recovery.
  10. Max Recovery Limited: This company specializes in the purchase and collection of non-performing consumer debt.