Debt Collection Notice

Debt Collection Advice

Debt Collection Advice

You'll almost certainly begin to receive calls from debt collection agents if you've been sent default notices or your debts have been in arrears for a while.

Even though it might sound intimidating, it's just a normal stage in the debt collection process. Debt collection agencies are not bailiffs and this is the most important thing to bear in mind.

What is a debt collection agency?

A debt collection agency is a company who specializes in recovering debts where the original can't get arrears repaid.

Throughout the UK, there are a lot of debt collection agencies. Some of them are small and they only specialize in recovering certain types of debt. Others are very huge corporations operating in more than one country.

Debt collection agents normally work in one of two ways:

The original creditor uses a debt collection agency to get in touch with you, even though he or she still owns the debt. Of the money they collect, the debt collection agency will usually receive a percentage.

Your debt is ‘assigned' or sold to the debt collection agency by the original creditor because they money you are paying is not enough for them. After your account has defaulted, the contract you signed with the original creditor enables them to do this. They get a quick lump sum of money by selling the debt at a reduced amount. The debt collection agency becomes the legal owner of the debt and they make their profit by recovering the whole amount from you.

By checking where letters from the collection agency ask you to send payment, you can usually tell which of these applies. The debt will still be owned by them, if they tell you to carry on paying the original creditor.

What does a debt collection agent do?

Debt collection agencies don't possess any legal powers. In comparison to the original creditor, they can't do anything different. In order to get in touch with you, collection agencies will use phone calls and letters. They might contact you using other means too, such as email and text. In order for you to see what information they'll usually contain, we've put together an example of a letter sent by a debt collection agency.

Calls or letters from collection agencies can be worrying, and they might threaten to send someone to your home or take court action but they're not allowed to make an excessive amount of phone calls or mislead and lie to you about their legal powers.

If you don't pay, they could make you bankrupt or take court action. However, this happens seldom, especially if the collection agency knows that you're looking for a debt collection advice from an organization like us, and you're willing to pay what you owe.

If a debt collection agent contacts me what should I do?

You must not ignore calls or letters from a debt collector agent. If you don't reply to them, they will not go away and it's very likely that they take further actions. Some might want you to pay the debt in large instalments or in full. You should remember that you need to inform them about the realistic amount of money you can afford to pay them.

You should contact our Debt Collection Agency UK for impartial and free debt collection advice, if you've been contacted by a collection agency before your situation gets worse.

We can assist you in working out a budget and figuring out how much you can afford to pay. You can make a complaint, if you are not happy with the way a debt collection agent is speaking to you or the amount of calls you receive.

What if a debt collection agent drops by my house?

It's very likely for the debt collection agency to send someone to pay you a visit. They might name this person a ‘field agent' or ‘doorstep collector'. It's quite common in practice for debt collection agents to come to your place.

When a debt collection agent comes to your home, you should remember that:

They are not a sheriff officer or a bailiff. It can be a criminal offence to pretend to be one of these positions.

You don't have to let them in or open the door

They are obligated to show proof of ID

If you ask them to they must leave

They are not legally allowed to take anything from your house

You don't have to make cash payments to them, if a debt collection agent pays you a visit. It's much easier to contact the company later and set up a standing order at an amount you can surely afford. They're more likely to keep coming back for more payments, if you pay a collection agent in cash. You need to make sure that you get a receipt, if you do make any payments at the door.

Will there be more charges and interest added by the collection agency?

Usually, charges and interest will stop, if the debt has been sold to a debt collection agency. After the account defaulted, the original creditor might have already stopped these. However, in seldom cases a collection agency might carry on adding charges and interest. They can only add amounts which are specified in the contract you signed with the original creditor. While the collection agency is contacting you, they may continue adding charges and interest if the debt is still owned by the original creditor, but this is very unlikely.

Issues with debt collection agencies

Which collection agency do I pay, if more than one contacts me regarding the same debt?

When it comes to a debt, only one debt collection agency should get in touch with you. It's best to contact the original creditor to know what's happening, if you're being contacted by more than one debt collection agency at the same time. They are obligated to tell you which collection agency is managing your debt and prevent the other agencies from contacting you.

There are collection agencies that have multiple trading names. This means it might seem like you're being contacted by more than one agency, but it's actually the same agency using different names. Check the letters' addresses - if they're very close or the same, you're probably dealing with the same company. You could ask the collection agency to get in touch with you using only one trading name, because using several names is quite confusing.

A debt collection agency is contacting me regarding a debt that's not even mine

This issue is not common, but it can happen when a debt collection agency is trying to track an individual with a similar name to yours. You have to get in touch with the agency and tell them that they are contacting the wrong person. In some cases, it's not easy to explain to them that you are not the individual they are searching for.

You are advised to make a complaint to the collection agency if they do not stop contacting you and if your complaint hasn't been dealt with in eight weeks, you should contact the Financial Ombudsman Service for additional help.

How to know for sure if the debt collection agency is real?

In the UK, all debt collection agencies must hold a valid consumer credit license and they must be regulated by the Financial Conduct Authority (FCA). You have to contact the FCA in order to see if a debt collection agency is legitimate.

A lot of debt collection agencies are members of trade bodies like the Credit Services Association. If the logo of a trade body is present on their letter, you can also get in touch with them to check if they are real.

If you are still unsure, you can also contact us. We can confirm the legitimacy of a company, because we deal with all collection agencies in the UK.

Calls or letters from a debt collection agency are a premonitory sign that your debts are getting out of hand. With that being said you are advised to get impartial and free debt assistance right away.

24 hours a day, online debt collection advice is available. It's confidential and free and it only takes 20 minutes to work out a budget and build your personal action plan. You can also call our Helpline for expert debt collection advice on 0800 246 5796.

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