If your credit account goes into default, your credit card company might turn your debt over to a collection agency. Collectors are required by law to abide by certain rules. Yet not all of them do -- and some might even pretend to have greater powers than they actually have. That's why it's a good idea to know when debt collectors cross the line.
Debt collectors versus bailiffs
Debt collectors are different from bailiffs and have less power. Bailiffs are allowed to take your goods away in certain circumstances -- although they will need a court order -- but debt collectors are not allowed to take away your possessions.
It's important to understand that debt collectors are not bailiffs and do not have bailiffs' legal powers, according to Matt Hartley, spokesman for the Consumer Credit Counselling Service (CCCS).
"All a debt collector is allowed to do is contact you to ask you to repay," Hartley says.
Even so, some debt collectors might exaggerate their powers (by threatening to take away your belongings, for example) to scare you into paying up.
"If a debt collector crosses the line, for example, by pretending that they are a bailiff, contacting you at unreasonable times or acting in a harassing way, then you should make a complaint to your local Trading Standards office," Hartley says.
You can also complain to the Financial Ombudsman Service if you feel a collector has treated you unfairly or misrepresented himself.
Knowing your rights
When debt collectors contact you, they should tell you who they are, who they work for and why they are contacting you. They should also explain the process they are legally allowed to take to get the money. If you ask, they should also provide you with more information about the debt, such as
your original agreement, and be able to prove the debt is yours and not someone else's.
Debt collectors are allowed to contact you only at reasonable times and should use language you understand. They can't force their way into your home and can only enter your property if you invite them. If you ask them to leave during a visit, they should leave straight away, according to watchdog group the Office of Fair Trading (OFT).
They're also not allowed to visit you at your workplace or in hospital, unless you agree to this. They are also not allowed to pressure you into selling possessions or borrowing money to repay your debt.
When arranging a repayment plan, debt collectors aren't allowed to pressure debtors into paying in full or in large instalments, or intimidate them into upping their payment amount. Collectors must also be very careful (by limiting home visits, for example) when dealing with someone who has a physical or mental illness.
Revised debt collection guidance issued by the OFT in October 2011 also outlawed the use of social networking sites such as Facebook and Twitter by debt collectors chasing debts. In a news release about the revised guidelines, the OFT said that contacting customers (or their friends) in this public way caused "stress and embarrassment".
David Fisher, the OFT's director of Consumer Credit, says the guidelines make clear the standards the OFT has for debt companies, banks and law firms when it comes debt collection.
"In the present economic climate, with many people, including those who may be particularly vulnerable, in financial difficulties, it is crucial they are treated fairly by companies recovering their debts," Fisher said in a release.
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