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THE DEBT COLLECTION SCAM

In recent times there has been an increase in the numbers and activities of debt collection agencies, most of which are unscrupulous and whose methods are highly unethical and possibly unlawful.  For example in the past year I have received three letters addressed to me personally demanding payment of debts of which I know nothing.  I have also advised two friends who have had similar experiences and based on that, decided to investigate further.

This is not a matter of identity theft but something even more sinister.  It is because the banks and financial institutions, wishing to recover their losses by any means without tarnishing their dubious reputations any further, are selling off debts to speculative debt collectors who then go to any lengths to recover the money.  One method they employ is to search electoral rolls and send out letters to anyone who holds the name shown on the debt, hoping that at least one of them will pay up.

What is sinister about this is that it doesn't merely target debtors, it targets people who might be vulnerable and easily intimidated into settling the debt, even though they are not responsible.  The debt collectors then reap the benefits and if this could be proved, it is a serious criminal offence that carries a long custodial sentence.  Worse still, these crooks even try to recover debts that are many years old in spite of the fact that it is legally prohibited to sue for debt after six years from the default.

If you receive any such demand, regardless of the expressed urgency or threats of legal action, calls to your home and bailiffs, don't panic because before any court action can be commenced, the debt has to be satisfactorily proved and in reality, these demands are speculative and seldom proceed to litigation.  In any case, they have to prove the debt before they can ever hope to gain a county court judgement, let alone an order for enforcement and it takes a long time to reach the point at which a court will order such enforcement.

The simplest response to such demands is to visit our local solicitor for help and advice.  Details are shown on this page.  A good solicitor might even determine that the debt is unenforceable under the 1974 Consumer Credit Act as is the case with many agreements drawn up before 2007.  Otherwise, follow the simple course of action outlined below and don't let the debt collectors panic you.  They have no power to send in bailiffs or take away your property so ignore any such threats and call the police if they continue to threaten or attempt such actions..

If the debt isn't yours, you can safely ignore the demand and wait until it goes to court.  The chances are that it won't - but then you might get a similar letter from another agency when they realise they're getting nowhere and sell the debt on to someone else.  If it does go to court, you can have it transferred to your nearest court where you will have ample opportunity to defend the claim and recover your costs and expenses from the debt collector.  The courts are not sympathetic to debt collectors so it won't simply be a case of your word against theirs.  If they can't prove the debt or have failed to respond to correspondence from you, they can't collect - that's law!

If you prefer to deal with matters head-on, then you should write to the debt collector and demand documents relating to the claim.  Under the terms of the Consumer Credit Act 1974, they are obliged to supply these and failure to do so is a criminal offence.  They might ask you for a payment not exceeding £10 to cover administration and which is recoverable through litigation.  If they fail to supply the documents requested, they will find it impossible to obtain a judgement in any court and will be ordered to repay any costs you incur in attending.

Don't resort to belligerence or threats because it is unhelpful.  Simply send a letter [sample below] asking for the documents to prove the debt and wait for the response.  In most cases you will be ignored and receive further demands.  Simply send the letter again and be sure to keep copies for future reference (or evidence).  Eventually they will give up or pass it on to someone else - or go to court.

Now there's a twist in the tail of the letter you send.  If they actually send the information requested and it relates to someone else, albeit with the same name, they commit an offence under the provisions of the Data Protection Act.  This is ironic since these same people hide behind the Data Protection Act when they don't want to talk to you so if they do send it, report it to the DP Registrar.  If they don't, report it to the Consumer Credit Registrar and the Office of Fair Trading.

A letter requesting proof of a debt is available on this website via the links below and you just need to add your own details before you send it.  I'd be interested to hear from anyone who has had a similar experience or is being pursued by aggressive creditors.

LETTER REQUESTING PROOF.PDF