A guide to disputing unfair debt in the UK

The idea of disputing a debt can feel daunting, but if you genuinely believe you do not owe what a creditor is asking you to pay, it’s worth querying this. There are a few things to note though before you consider disputing a debt:

  1. Make sure you have not accepted liability in the past – If you have agreed to repay the debt in the past or set up a debt solution and included the debt within it, this means you have accepted the debt is yours to pay and agreed you are liable for it. There is no way you can dispute the debt once you have done this.
  2. Check you have any paperwork linked to the debt – If the creditor is asking for more than they are owed, make sure you have evidence of exactly what you owe. You can then use this as proof of what you agreed to borrow and then dispute the amount your creditor is chasing you for.
  3. Check another company has not bought your debt – Sometimes, creditors will sell your debt to private debt collection companies. If you receive a call or letter chasing for payment but don’t recognise the company, check this has not happened first before disputing. Ask them to confirm the amount and who they bought the debt from first. You could also contact the original creditor to confirm who the debt was sold to.

When can you dispute a debt?

Check if any of these reasons for disputing a debt apply to you:

  1. You did not sign a credit agreement – All creditors must ask you to sign a credit agreement. This is a legally binding document which means you are agreeing to repay what you have borrowed. If there was no credit agreement in the first place, you can dispute the debt.
  2. You were under 18 when you signed the credit agreement – You must be over 18 to sign a credit agreement. If you can provide proof you were under this age when the debt was set up then you can dispute it.
  3. You didn’t understand what you were signing – Financial companies offering credit agreements have a duty to provide you with clear information when you sign up with them – explaining how much you are borrowing and what the terms of the agreement are. If the language used could be considered confusing or misleading in your credit agreement – meaning you did not get what you signed for – you can dispute the debt amount. It’s worth noting however that you may need to seek legal advice to do this.
  4. You felt pressured into signing up for the debt – Some sales representatives can coerce people into signing up for financial credit agreements, if you felt this was the case when things were set up, you can use this as a reason for your dispute.
  5. Your name is not listed on the credit agreement – If you are not listed on the credit agreement, you are not responsible for the debt and so can dispute if the creditor is chasing you personally.
  6. The debt you are being chased for is not what you agreed – If what you are being chased for does not match the original credit agreement you have grounds to dispute the debt. If you signed the credit agreement in the last 14 days and have discovered that what you are getting is not what you agreed, you can cancel within this period without giving a reason.
  7. Any information on your credit agreement is incorrect – If there is any wrong or missing information on your credit agreement, you may be able to dispute the debt.

What to look for on your credit agreement

Your credit agreement should give you all the information regarding the debt you need to repay and is a good starting point if you feel you need to dispute. It should clearly tell you:

  • How much you have borrowed.
  • How many payments you need to make, how much these are and when they will be made.
  • The full amount you need to repay.
  • The APR and interest rate.
  • Details of the credit agreement’s terms and conditions.
  • How to cancel the agreement and if you have to pay any fees to do this.
  • It should also feature clear signatures by yourself and the creditor.

If any of these things are missing from your credit agreement or are incorrect, you could have reason to dispute the debt.

It’s best to speak to an impartial financial advisor to confirm if you have a valid case for disputing your debt before you go ahead. We have a team of experts here at PayPlan who can help with this – you’ll find their contact details at the end of this guide.

How to dispute a debt

If you feel that any of the examples above apply to you, you can look to dispute the debts that you are being chased for. To do this, first, you need to contact your creditor.

We recommend contacting them in writing, via letter or email, to explain why you think you should not have to repay the debt. It’s also a good idea to send any evidence along with this initial first contact – such as a copy of your credit agreement if it is your main reason for your dispute.

Contacting a creditor directly can be daunting, which is why we’ve provided an easy to follow template below on how to put together a dispute letter:

[Name of creditor organisation]    [Your name and address]

[Write out creditor’s address]   


Account Number: [insert the account number cited by the creditor chasing payment]

Dear Sir/Madam,

I have received a [insert letter or telephone call] regarding the above account, which you claim I owe.

I have no knowledge nor do I accept that I owe money to [insert creditor name] and wish to dispute this debt.

I have evidence that I do not owe money to [insert creditor name and then go on to explain what evidence you are offering]

I wish to point you towards the Financial Conduct Authority’s Consumer Credit sourcebook which states that:

“A firm must not ignore or disregard a customer’s claim that a debt has been settled or is disputed and must not continue to make demands for payment without providing clear justification and/or evidence as to why the customer’s claim is not valid.” 7.5.3

“Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner.” 7.14.3

I ask therefore that you cease all payment collection methods until this dispute has been investigated.

Failure to stop collection activity means you will be breaking the FCA’s rules and guidance and ignoring my request while making unjustified payment demands is harassment.

Please provide sufficient evidence that I am liable for this debt if applicable, if not take into account the evidence I have supplied that states I do not need to pay.

If this matter is not resolved I will make a complaint to my local trading standards and the FCA.

I look forward to your reply.

Yours faithfully,

[Your full name]

The creditor should respond to this letter or email, stating that they are going to investigate your issue. Keep any correspondence safe, to refer to later if you need to.

If after investigation the creditor does not agree to your dispute but you feel that there are still grounds for the debt to not be paid by you then you can reach out to the Financial Ombudsman Service to take things further.

For further information on how to dispute a debt, speak to a member of our team here at PayPlan on 0800 280 2816or fill in our contact form to receive a free call back.