Those being chased for debts are often told that if creditors cannot provide original copies of credit agreements they can avoid paying.
However, Nigel Cates, OFT deputy director for consumer credit, said that the duty on the creditor is to provide a ‘true copy’ – not necessarily a ‘photostat’ including signature.
He added: "If you don’t put together an agreement properly it may not be enforceable – we support that but it doesn’t mean everyone has a right to get out of debts that they owe. If you owe the debt, you owe the debt."
The OFT last month told the debt collection sector that using neighbours to pass messages to trace people breaches the spirit of its guidance as it has the potential to reveal to neighbours that individuals are being pursued. It said businesses that continue to do this face enforcement action and imposed requirements on debt buyer Link Financial for the practice. Link has addressed the OFT's concerns.
Cates said imposing requirements is a deterrent to the whole industry, but they are not designed to be punitive: "When we impose requirements we want that company to continue in business. We just don’t want them to do certain things."
The OFT is now focusing on the problem of data quality, particularly in the sale of utility and telecoms debts.
[source: Credit today]
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