Consumer rights and harassment issues are a subject that contains as many myths as there are facts. Harassment will usually take the form of credit or loan companies applying pressure to those that are unable to pay their debts. Problems occur when disreputable companies use underhanded methods to recover money designed to instill fear into the debtor.
Debt Collection Scare Tactics
Debt collection agencies will bank on the debtor’s lack of consumer rights knowledge when it comes to collecting debts. This is not to say that all debt collection agencies will use scare tactics to collect debts. There are reputable companies that know some methods cannot be used to recover debts. However, there are still a large number of companies that will use the “any means necessary” method to recover monies owed. These companies use methods designed to instill fear into the debtor with no thought of the stress caused to the debtor.
Consumer Rights and Debt
If a consumer has fallen behind or is unable to pay their debts then a strict process must be followed by the debt company. The debt recovery process is strictly controlled under the Consumer Credit Act and the first step taken must be a letter of default to the debtor. The default letter must contain details of any breach of contract and the steps that must be taken to rectify this breach. No further action can be taken by the collection agency unless the letter of default has been sent to the debtor.
Post Default Letter Process
If the default letter has been sent and no steps have been taken to remedy the breach of contract then the next step of the process will begin. This can either take the form of court action or a payment arrangement can be made with the debtor. An arrangement means that a satisfactory agreement has been reached regards repayments between the debtor and the collection agency. This is the point where harassment usually comes into play between debt collectors and debtors.
The Debt Collector’s Powers
Basically, debt collectors have no legal right whatsoever to use scare tactics to demand money that is owed to them. They are not court appointed bailiffs and do not have the same legal recover powers. This is where harassment methods usually begin; debt collectors know these methods are not permitted by law but will bank on the debtor’s lack of consumer rights knowledge. There are number of methods that debt collectors will use to instill fear in the hope of recovering money, nearly all of which are illegal.
Debt Collection Tactics
When it comes to recovering money disreputable debt collectors will use methods including:
- Continual phone calls to the debtor’s home or office
- Threats of taking the matter to a criminal court when the only court action can be the civil courts
- Arrange home visits without the debtor’s permission, this is not permitted
- Threaten to repossess the debtor’s goods without a court order, again this is not permitted
- Use threatening language either over the telephone, by letter or in person
- Threaten to publicly reveal debts
- Send letters that look as if they have been issued by the courts
- Contact the debtor’s employers with the intention of causing embarrassment
Illegal Harassment
All of the above methods used by some collection agencies are in fact not permitted under the Consumer Credit Act. However, disreputable collectors know that placing debtors in a state of fear or threatening to embarrass them will have the desired effect. Debtors that are being subjected to this kind of harassment do have a legal right to report these agencies and the consequences to the collectors can be severe. By standing up and enforcing consumer rights debtors can stop these types of underhanded scare tactics from continuing.
Who to Contact
Debtors that are being harassed should keep a diary of all contact between the debt collectors and themselves. They should then contact their local Trading Standards office with the diary of harassment and all letters sent by the collectors. The Trading Standards office will follow up the matter and do have the power to issue verbal warnings or proceed with criminal prosecutions against the debt collection agencies. Consequences can also include the debt collection agency having their credit licence revoked by the Office of Fair Trading.
Harassment by debt collection agencies can place debtors under severe mental strain. These types of debt collecting methods are against the law and should not be tolerated by consumers. This type of harassment will only end by the debtor standing up to the disreputable collectors and enforcing their consumer rights.
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