How to be Compliant in Debt Collection

AR LEGAL COLLECTIONS

Professional Debt Collection Service

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London NW4 4DH
T: +44 020 8202 0730
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How to be Compliant in Debt Collection

When faced with a situation where money is owed, it is important to make sure the correct procedures are followed by any debt collection agency trying to reclaim the amounts outstanding.

Debt collection agencies are bound by a code of practice set out by the Credit Services Association. In order to be compliant when dealing with a person who owes money to a client, the key areas of consideration are as follows. 

Data Protection

This is one of the most important areas of consideration. For example, a debt collection agency must not leave messages with a neighbour or discuss the matter with someone else who answers the telephone on behalf of the debtor. The details of the matter can only be discussed with the parties directly involved.

Treating Customers Fairly

A debt collection agency must make sure all of its communication, such as a debt recovery letter, is clear and accurate and not misleading in any way. The reasons for contact must always be clearly explained. There are guidelines that must be followed to ensure debtors are not subject to harassment and that they are communicated with properly. Any charges that might be applicable must be explained from the outset.

Misrepresentation

It is not acceptable for a debt collection agency to threaten a debtor with action it does not intend to carry out or that is not legally possible. For example, bankruptcy cannot be threatened if the balance of the debt is too low, and a Charging Order is not possible unless the debtor owns property. There needs to be a genuine belief that a certain course of action will be granted before the possibility is suggested to a debtor.

If the correct procedures are not followed by a debt collection agency, the result can be penalties from regulators, often leading to damaging publicity, or even the loss of a credit license.

For more information, free initial advice or a general discussion, please contact AR Legal Collections on +44 (0)20 8202 0730.

 

Tags: Charging Order, Debt Collection, Credit License, Credit Services Association, Debt Recovery Letter, Debtor, Debt Collection Agency

 

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