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Creditors will use an array of different tactics to try and recover money if you owe a debt to them. Repeated phone calls, automated emails, endless letters reminding you of the consequences of not paying…the list goes on. If these don’t work, then another tactic they might use to get you to pay the debt is by using a debt collection agency.
Immediately, this can become very alarming. Programmes like Can’t Pay, We’ll Take it Away have popularised the idea of the scary bailiff forcing entry into a person’s home, seizing their goods and repossessing their property, sometimes leaving the person homeless if they can’t afford to pay the debt. They’ve also shown that bailiffs aren’t afraid to use scare tactics such as contacting family members in order to locate a debtor, or adding up the value of personal belongings in front of a debtor to try and intimidate them into action.
If you’re in debt and worried about this happening to you, it’s essential you know your rights and, more importantly, who a debt collector can call, what their powers are and what to do if one shows up at your door.
What are debt collectors?
A debt collection agency is a third party who will try to get you to pay the debt you owe on behalf of the creditor you owe it to. Your creditor can either:
- Sell the debt to the debt collection agency
If your creditor does this they’ll receive a reduced amount from the money you owe and leave the rest to the debt collection agency. The debt collection agency will then make a profit by collecting the money. You will be notified if your debt is sold.
- Use the agency to collect the money
In this case your creditor will remain as the legal owner of the debt. The debt collection agency will be paid a percentage of what they collect.
An essential point to know about debt collectors is that they are not bailiffs. Bailiffs, or enforcement agents as they’re also known, are the people you might have seen on Can’t Pay, We’ll Take it Away. They have special powers granted to them by the courts to enforce debts. This means that if you owe a debt, they can use peaceful entry to enter your home, take control of your goods and sell them at auction to recover what you owe. Debt collectors cannot do this.
Many people aren’t aware this is the case, and may think that debt collectors and bailiffs are one and the same. Some creditors may take advantage of this by threatening to send debt collectors to your home in an attempt to make you pay the debt. This may sound intimidating if you receive a letter, but the reality is there’s little that a debt collection agency can do.
What powers do debt collectors have?
The powers that debt collection agencies have are very limited compared to bailiffs. There are only a few things they can do in order to recover the money that you owe, including:
- Visiting you at home
This must be done in a calm, polite and professional manner. When a debt collector visits your home they must provide proof of who they are, state clearly why they’re there and leave if you ask them to. They can ask you to pay the debt, which you can refuse if you wish. They aren’t allowed to enter your home unless you ask them to come in, and they certainly aren’t allowed to take any goods from you.
- Contacting you via phone or post
Debt collectors are allowed to contact you through these channels, but you can ask them to stop by sending a cease and desist order. Once you’ve done this they’re allowed to contact you one final time and that’s it. If they do so again, this is a violation of Financial Conduct Authority (FCA) policy regarding debt collectors, and you can either sue the debt collection agency or raise a complaint through the Financial Ombudsman if you wish.
Can debt collectors contact my family members?
If debt collectors haven’t been able to get in touch with you, they may try to contact your family members. Calling your family might seem like an invasive move, but don’t worry; under FCA policy a debt collection agency has to abide by a set of rules when talking to your family members.
Firstly, they’re only allowed to call a family member once. If they’ve been given the wrong information they’re allowed to call again, but your family member doesn’t have to tell them anything if they don’t want to. After your family member makes this clear they have to stop calling them.
There’s also a strict criteria of what debt collectors are allowed to talk to your family about. FCA policy states that debt collectors are only allowed to ask for your location or phone number; they aren’t allowed to ask your family to pay the debt for you, or even tell your family that you’re in debt. Your family member may realise they’re in debt due to the debt collector stating who they work for (debt collection agencies are legally bound to do this if a family member asks) but they aren’t allowed to discuss any details of the debt whatsoever.
Doing any of the above counts as a violation of FCA policy, and is breaking the law. If any of this happens, you’ve got every right to sue the debt collection agency themselves or raise a complaint through the Financial Ombudsman. These rules are in place as they prohibit debt collectors from trying to get you to pay the debt through fear of embarrassment.
What if the family member is under 18?
If the debt collector speaks to a family member under the age of 18, such as a younger brother, sister or cousin, then they’re allowed to disclose the fact that you’re in debt. This doesn’t mean that they’re allowed to try and get them to pay the debt for you, intimidate or harass them the same as if the family member was over 18.
If the debt collectors already have your phone number, then they’re not allowed to contact your family members at all, regardless of their age or how much debt you owe.
How can I stop debt collectors speaking to my family?
Paying the debt is the easiest way to prevent debt collectors from calling your family. You should only do this, though, if the debt is genuinely yours and you can afford to pay what you owe without putting yourself into hardship. In the event that you haven’t got enough to pay in one go, then your debt collector (or creditor they’re working on behalf of) should be willing to set up a payment plan with you to ensure you can pay the debt within a reasonable timeframe.
You might dispute the debt, in which case a simple way to prevent them from contacting your family is to ensure they know where you live and have your correct mobile phone number.
Can debt collectors call my work?
Debt collectors are allowed to call you while you at work, but they’re not allowed to tell any of your colleagues that you’re in debt. They are not allowed to call your workplace directly. It’s also illegal for debt collectors to show up at your place of work, or carry on calling you at work once you’ve asked them to stop. Again, doing any of these counts as a violation of FCA policy and could result in action being taken against the debt collection agency.
Have a look at our debt collection pages for more information.
If you’re worried about your debts and would like to speak to someone confidentially, then please call our helpline on 0800 280 2816. Our opening hours are 8am to 8pm Monday to Friday, and 9am to 3pm on Saturday.