Debt Collectors: What is a Debt Collector?
Dealing with debt collectors can be stressful, but knowing your rights and how to manage them will help you find the best solution. Read on to learn what debt collectors can and can’t do, and the steps you can take when they contact you.
A debt collector is a person or agency responsible for collecting debts that you owe on behalf of your creditor or the debt collection agency.
What can a debt collector do?
Debt collectors are only allowed to contact you about the repayment of your debts. They don’t have any special legal powers and are not allowed to enter your home or take some possessions away from your home. But although they can’t enter your home, they can visit you to discuss your debt repayment terms.
Typically, debt collectors will contact you via letter, phone, text or email. Don’t be tempted to ignore a message from a debt collector as this may lead them to take further action.
What are debt collectors not allowed to do?
Debt collectors are not allowed to do the following:
- Enter your home: Debt collectors don’t have the right to enter your home and seize goods or demand money from you, but they can visit your home to discuss the repayments. However, they must show ID to prove who they are.
- Pretend they have extra legal powers: For example, debt collectors can’t send bailiffs or imply that they are from a solicitor or the courts.
- Speak to other people about your debt: Debt collectors can’t speak about your debts to anyone else without your permission, which includes family, friends, or your employer.
- Harass or threaten you: Debt collectors don’t have the power to threaten you with deadlines for repaying the debt or take legal action against you.
- Give you misleading or incorrect information: This includes making you pay excessive fees or leaving a calling card that makes it look like you’ve missed a delivery.
If you believe that a debt collector has broken any of these rules, it’s important to find out which company is collecting the debt and gather evidence to support your claim. Next, you’ll need to send a formal complaint to the creditor to ask them to stop.
If the debt collector continues breaking the rules, you should make a formal complaint to the Financial Ombudsman Service.
Debt charities, such as Citizens Advice and StepChange, offer free support to help you with dealing with unfair treatment from creditors and debt collectors.
What should I do if a debt collector contacts me?
Speaking to debt collectors can be a stressful experience, but using the steps below could help you deal with them:
Step 1: Check if the debt collection company is operating legally
First, it’s important to check whether the debt collection company contacting you is legitimate and authorised by the Financial Conduct Authority (FCA). All debt collection companies must be signed up to the Financial Services Register to legally operate in the UK. The register is free to use, and it’s easy to check a company online.
If the company contacting you does not appear on the register, it may be operating illegally, or it could be a scam. If you think an unauthorised debt collection company has contacted you, report them to the FCA immediately.
Step 2: Find out the details of your debt
Next, find out the following details about your debt before engaging in further conversation with the debt collectors:
- How much do they think you owe? This is the total amount of debt they believe you are due to pay to them.
- Where has the debt come from? Which creditors do they believe you owe money to?
You can ask the debt collection agency to confirm these details in writing and request a copy of the original credit agreement. You can also declare what form of communication you prefer, for example, only be contacted via post, to avoid persistent phone calls or home visits.
Be careful not to pay any money to a debt collector unless you have received the original copy of your credit agreement and are certain that the company is legitimate.
Step 3: Get debt help
Being contacted by a debt collection agency may signal that you need extra support managing your debts. You can ask the debt collectors to place a hold on your account while you get specialist help with your debt. Creditors will usually give you at least 28 days of no contact while you seek support. Borrowers in England and Wales may be able to apply for a longer break, to get their finances back on track through the Debt Respite Scheme (which is also known as the Breathing Space Scheme). A separate breathing space scheme also exists in Scotland.
Although borrowers in Northern Ireland can apply for breathing space for around 30 days, plans to develop a scheme with a longer break are being considered.
Contacting free debt charities can help you get expert advice on how to manage debt collectors depending on where you live in the UK. For example, Scotland has different debt collection rules than England, Wales and Northern Ireland. An adviser from a debt charity will be able to offer tailored advice based on your location. Your adviser can help you decide the best way of repaying what you owe to the debt collectors.
What is the difference between a debt collector and a bailiff?
Unlike debt collectors, bailiffs (also known as enforcement agents) have special legal powers to collect a debt.
Bailiffs are responsible for collecting debts, such as county court judgments (CCJs), council tax arrears and parking fines. They have the legal right to visit your property and take goods to pay off your debt.
Some bailiffs work on behalf of private companies, while others may be self-employed or work for the council.
Bailiffs work differently in Scotland and are known as Sheriff Officers. They can carry out court orders such as evictions, debt arrangements, property and family law.
Can debt collectors come to your house?
Debt collectors are not allowed to enter your home without your permission. So you don’t have to answer the door if you feel uncomfortable speaking to them face to face. They are also legally required to leave your property if you ask them to.
It’s important to note that any debt collector that comes to your home must show proof of ID.
What can I do if several debt collectors contact me about the same debt?
If multiple debt collectors contact you about the same debt, it’s worth speaking to your original creditor. They will be able to confirm which debt collection agency is responsible for the debt and prevent other companies from contacting you.
In some cases, debt collectors use different trading names. This means that although it may look like multiple companies are contacting you, it’s the same company using different names.
Checking the addresses on letters can help you identify whether the same company is contacting you. You can also ask the debt collection agency to contact you using one trading name only.
How much interest can a debt collector charge?
When debt is sold to a debt collection agency, the interest and charges stop because the original creditor stops adding more after an account default.
There are some cases, however, where a debt collection agency may continue adding interest and charges according to your original credit agreement.
If a debt collection agency is working on behalf of your creditor, they may continue adding interest and charges while the debt collection agency contacts you.
What can I do if I can’t repay the money I owe?
Dealing with debt can be stressful, but it’s important to remember that you are not alone. Contacting a free debt charity or specialist of expert advice can help you find the best next steps for managing your repayments and come to an agreement with your creditors.
Can debt collectors see your bank account balance in the UK?
Debt collectors can see your bank balance and other details about your bank account in the UK under certain circumstances. For example, a debt collector or your original creditor can get permission from the court to view your bank balance and sources of income if they suspect you have enough money coming in to pay off your debt but are choosing not to.
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Hannah is an award-winning journalist with a background in the trade press. She writes about finance, asset management and business for Shares, Citywire, FE Trustnet, and interactive investor. Read more