Debt collection: what are my rights?

If you have one or more unpaid debts and you have received more than one letter from your creditor demanding repayment, it’s likely that you will be contacted by a debt collection agency, who will aim to get the money back on behalf of your creditors.

Being caught up in the debt collection process is often distressing. If you can’t afford to repay your debts, the best course of action is to contact an expert debt adviser, who will be able to talk you through a range of options to see which one is most suitable for you.

But if it does get to the stage where debt collectors are calling, it’s important to know your rights to ensure you are fairly treated.

Your rights
The Office of Fair Trading (OFT) put together a ‘Debt Collection Guidance’ document, highlighting a number of guidelines as to the behaviour of creditors trying to reclaim a debt.

Communication
Your creditor(s) must not communicate with you in an unclear or misleading way. They must tell you exactly what the situation is, what you owe them, and the action they are taking.

Authority/legal position
Creditors must not pretend they have the power to take action themselves – it must be made clear that for any action to be taken, a professional debt collection agency (or the courts) must be involved.

Physical/psychological harassment
Creditors cannot use any kind of intimidating behaviour to force you to repay what you owe.

Deceptive methods
Creditors must not contact you directly when you have an appointed representative or refuse to talk to your debt management company, they must consider any reasonable offer and investigate if a debt is queried and must not take part in any behaviour which could be deemed unfair.

Charging for debt collection
Unless it was set out in a contract previously, creditors are not allowed to levy any charges on you for collecting debts. If they do charge, the charges must be reasonable and justifiable.

Statute-barred debt
Under the Statute Of Limitations Act 1980, a debt is unenforceable if no communication or action was taken by the creditor within a certain time period (either 6 or 12 years, depending on the type of contract). Although they are still legally considered a debt, creditors must be very careful how they pursue these ‘statute-barred’ debts.

Useful Pages:
Dealing with debt collectors

Tags: debt, debts, debt collection

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