Debt Collection Agencies
Once you fall into arrears, regardless of whether you are making a negotiated repayment plan or not, it is very likely that your debt will be passed on to a debt collection agency at some point. For most debts this is a normal process that is carried out. Some collection agencies are only small, specialising in specific debts only and others are large companies operating inside and outside of the UK.
The creditor you owe the debt to, will either:
- Instruct a collection agency to contact you, but remain the owner of the debt; or
- Assign the debt to a collection agency, by selling the debt to them for a reduced lump sum. The assigned agency will become the legal owner of the debt.
The collection agencies will contact you by telephone, letter and sometimes by text or email. They are likely to threaten court action and may say that they are sending someone to your home to discuss the debt. This can be very frightening, but the agencies don’t have any more power than the creditor in terms of what they can do.
Are their powers the same as a bailiff?
A collection agency may send someone, known as a ‘doorstep collector’ or ‘field agent’ to your home, but in practice this is rare. Telephone calls and letters are more common. If however you do receive a visit from a collection agency, it will be useful to know the following:
- A field agent (or doorstep collector) is not a bailiff (enforcement officer) and does not have their legal powers
- It is a criminal offence for a field agent (or doorstep collector) to pretend to be a bailiff
- The field agent (or doorstep collector) must show you proof of ID
- If you ask the field agent (or doorstep collector) to leave your home, they must oblige
- The field agent (or doorstep collector) cannot remove goods or take anything from your home
- You do not have to make cash payments to the field agent (or doorstep collector).
- You can always contact them later and set up a standing order allowing you enough time to work out what you can realistically afford or after seeking advice from a debt adviser/advice agency
- If you do decide to give payments to a field agent (or doorstep collector) who calls at your home, make sure you ask to see their ID and that they give you a receipt. Make sure you are not put under any pressure to pay more than you can afford.
Interest and charges
Most debt collection agencies in the UK are regulated by the Financial Conduct Authority (FCA) and will hold a valid consumer credit licence. If you need to check that an agency who has contacted you is licensed you should contact the FCA for confirmation. In addition most agencies belong to trade bodies such as the Credit Services Association. The trade body logo should be on any letters they send, so you also have the option to contact them to confirm they’re a legitimate agency.