Debt collection is a necessary but uncomfortable situation for all involved. Legal guidelines stipulate what behavior is acceptable when attempting to collect debts. There are several laws regarding harassment of debtors by creditors and generally accepted guidelines pertaining to unacceptable creditor behavior. Consumers should become familiar with these so they can identify situations involving unfair treatment.
Administration of Justice Act 1970 Section 40 explains that creditors or agents like debt collection companies acting on their behalf commit a criminal offense when they make monetary demands designed to create “alarm, distress or humiliation, because of their frequency or publicity or manner.” If a creditor falsely implies that criminal proceedings will result from non-payment of a debt, it is also violating this Act. Creditors who impersonate court officials, bailiffs, or any other parties that they are not are committing an offense. An additional violation involves issuing a document that could be interpreted as being sent by a court.
Engaging in harassment during the debt collection process is also deemed a criminal offense. The harassment may be verbal or written and includes making repeated calls during non-social times or to the workplace of the debtor. The Protection from Harassment Act 1997 considers it a criminal offense for a person to take any action that is known, or should be known, to be harassing to another person.
The Office of Fair Trading (OFT) details unfair practices regarding debt collection in its Debt Collection and Debt Management Guidelines. These apply to accounts in arrears or those having a missed payment. The Guidelines includes a section about “contacting debtors at unreasonable times and intervals.” Acceptable hours for contact are not listed in the document. However, examples regarding intervals and times that may be considered unfair are outlined. Making multiple calls at unsociable hours, contacting neighbors and informing them of the purpose of the call, and contacting a debtor at his or her workplace are included in the examples.
If you think a creditor has violated one of the above laws or is not in compliance with the OFT Guidelines, you should discuss the issue with the creditor or a collection company representing it. Prior to making contact, gather call and visit times and purposes and any emails or letters that you consider threatening. Use this information to prepare a letter of complaint notifying the creditor or collector that you think it has violated one of the above Acts or the Guidelines.
The letter should include a request that the party immediately stop the behavior. You should also provide a preferred method of contact and acceptable times to make contact. If the creditor fails to change its practices following receipt of this letter, submit a formal complaint to the Citizens Advice Bureau, Trading Standards, or OFT. If the behavior of a bailiff, creditor, or collection agency ever becomes extremely threatening or violent in nature, notify the police immediately.