Debt collection is the process of recovering money that is owed to someone. Debt collection in UK is regulated by the Consumer Credit Act 2006. This act sets out the rules that debt collectors must follow, such as the methods they can use to contact debtors and the amount of fees they can charge.
There are two main types of debt collection agencies in the UK:
- In-house debt collection agencies: These are debt collection agencies that are owned by the creditor. They are often used by creditors to collect debts that are difficult to collect on their own.
- Third-party debt collection agencies: These are debt collection agencies that are not owned by the creditor. They are hired by creditors to collect debts on their behalf.
Debt collectors in the UK can use a variety of methods to collect debts, including:
- Phone calls: Debt collectors can contact debtors by phone. They are allowed to make up to 20 calls per week, but they must not be abusive or threatening.
- Letters: Debt collectors can send letters to debtors. These letters must be clear and concise, and they must state the amount of the debt and the consequences of not paying.
- Emails: Debt collectors can send emails to debtors. These emails must be similar to the letters that they send.
- Home visits: Debt collectors can visit debtors at home. However, they must not visit at unreasonable times or in a way that is likely to cause alarm or distress.
- Legal action: If a debtor does not pay their debt, the debt collector may take legal action. This could involve issuing a County Court Judgment (CCJ) or taking the debtor to court.
If you are being contacted by a debt collector, it is important to know your rights. You have the right to:
- Be treated fairly and respectfully.
- Be given information about the debt, such as the amount of the debt and the interest that is owed.
- Dispute the debt if you believe that it is not yours.
- Negotiate a payment plan with the debt collector.
- Get help from a debt advice service.
If you are struggling to pay a debt, there are a number of things you can do:
- Contact the creditor and explain your situation.
- Ask the creditor for a payment plan.
- Contact a debt advice service for help.
If you are being harassed by a debt collector, you should report them to the Financial Conduct Authority (FCA). The FCA is the UK’s financial regulator and they can take action against debt collectors who break the law.