A safe, legal and responsible approach to debt collection in the UK
Debt Collection
It’s frustrating when you’re owed money and the debtor doesn’t pay. You’re legally within your rights to demand payment, but there are also red lines that creditors cannot cross. Doing so would risk falling foul of debt collection laws, making it harder to recoup unpaid debts and potentially landing you in legal trouble. Here we take a look at the most important things you need to be aware of and how to avoid making a misstep.
Misinformation
According to FCA (Financial Conduct Authority) rules, you’re obliged to declare three things to debtors when you get in touch:
- Who you work for
- Your role at the firm
- Why you’re getting in touch
Pretending to represent another organisation or misleading debtors to get them to make contact is not acceptable. Likewise, you can’t make false claims – for example, that they’ll go to prison if they don’t pay immediately.
Unfairness
It’s the responsibility of creditors or their debt collection agency to ensure they treat debtors fairly. That means allowing them time to pay what they owe, and not demanding a sum that they are financially incapable of paying. Because what is considered ‘reasonable’ can vary by case, it’s important to establish the financial circumstances of your debtor before pursuing repayments.
The Government also has strict rules about adding interest payments or service charges. You can’t suddenly hike your rates or demand charges that are higher than the actual cost of action. For example, £100 would be an unreasonable fee for sending a letter.
Harassment
Once you have made contact with your debtor, you cannot call them daily until they pay. Regulatory body the FCA (Financial Conduct Authority) also states that creditors “must not contact customers at unreasonable times.” It might seem obvious, but any abusive or threatening language is also completely unacceptable, as is publicly embarrassing the debtor.
What you can do
The easiest way to avoid mistakes is to use the legal tools available to you. For example, applying for a County Court Judgment will give you the legal right to enforce a debt. Courts can even provide Enforcement Agents to ensure debts are paid, though this can be time-consuming.
You can also contact an Enforcement Agent. Agencies like Dukes Bailiffs are fully certificated, experienced and trained in debt collection laws. Dukes will also start recovery right away, so there will be no delay. This means we handle everything efficiently and sensitively. For more information, contact Dukes Bailiffs today.
