What Can Debt Collectors Do UK? 

In the UK, debt collectors have the right to chase you for the money you owe. If you’ve received a letter from a debt collector, you might be feeling concerned and unsure about what to do next.

Don’t worry – we’re here to help. Each month, over 170,000 people visit our website for advice on dealing with debt.

This article will explain:

•  What UK debt collectors can do under the 2023 laws.
•  The process of debt collection.
•  The impact of debt on your credit score.
•  Your rights when dealing with debt collectors.

We understand how stressful it can be to deal with debt collectors, especially considering that nearly half of the individuals who deal with debt collection agencies have experienced harassment or aggression¹. Some of us have been in your shoes. With our expertise, we’ll help you figure things out.

Let’s get started!

What are Debt Collectors and Creditors Allowed to Do? 

I’ll break down and list all of the actions that a debt collector is allowed to do when they are contacting you regarding a debt. 

Remember, all debt collection agencies must respect UK debt recovery laws.

In short, there are creditors rights UK too. Here’s a table summarizing the key aspects.

Debt Collectors Can	But They Can’t
Contact you by phone or mail.	Call you after 9pm or before 8am.
Conduct home visits (on rare occasions) and knock on your door.	Forbily enter your home, or stay if you ask them to leave.
Threaten to take you to court by suing you for payment on a debt.	Harrass you, including threats of violence, repeated calls and visits, or abusive language.
Negotiate a debt settlement. Tip: make sure to get this new arrangement in writing.	Visit your workplace.
Access your bank account, but only after a court judgment has been made.	Take anything from your home or threaten to do so.
Sell your debt.	Speak to other people about your debt without your permission.
Contact you frequently.	Keep doing so if you request that they reduce communications.

They can Chase You Regarding Your Debts

If your debt is legitimate, the debt collection agency hired by your creditor has every right to keep contacting you about it.

But they must follow FCA rules on debt collection when they do.

They can either contact you via phone, mail or house visits. While you cannot stop them from contacting you entirely, you CAN control how they contact you.

If you don’t want them visiting your home or contacting you via phone, write them a letter informing them that you only prefer to be contacted in writing.

As per guidelines authorised and regulated by the Financial Conduct Authority in the UK, debt collectors must oblige.

If they keep contacting you regarding your debt via phone after you have specifically asked them not to, you can report them to the Financial Conduct Authority (FCA).

They Can Show Up at Your Home 

As I mentioned above, debt collectors have the right to show up at your residence to ask you about debts.

But they should let you know when they are coming which is good practice.

While they can show up at your residence, you must keep in mind that a debt collection agent does not have any extra-legal powers.

They do not have the right to force entry into your home by kicking your door in or by pushing you aside when you open the door.

You do not even have to open the door for them if you don’t want to.

In fact, you should not let a debt collector into your house. Instead, speak to them through the door.

Janine, our financial expert, explained that while debt collectors can visit your home for payments, they cannot come to your workplace, act threateningly, force payment, or discuss your finances with others. If they violate these rules, you can complain.

» TAKE ACTION NOW: Fill out the short debt form

They Can Add Interest and/or Additional Charges on Your Debt 

This is something that a creditor or creditors may decide to do. The debt collection agencies registered in England act on behalf of their clients.

If the debt collection agency has purchased the debt, they can add fees and interest to the debt if a clause is included in the purchase note from the original creditor.

Research suggests that the average unsecured debt has increased by 25% year-on-year, rising to £13,941², and a big chunk of that number comes from interest.

I suggest that you try to settle debts with debt collectors as soon as possible because if you don’t, there’s a chance your debt may keep growing.

You can send your creditor a letter requesting them to freeze charges while you get your financial situation in order so that you can start paying them back.

They must respect your request.

If you’re transparent and sincere with the explanation of your situation, it’s likely that your creditor will understand and agree to freeze interest on a defaulted account.

They Can Take Money from Your Accounts 

Taking money from your connected accounts may seem like an infringement but it’s completely legal according to UK law.

As an example, suppose you have credit card debt and a current account with the same bank. The credit card provider has the right to dip into your account and take the money you owe from it.

Keep in mind that while they do not require your permission to do this, they must warn you in advance.

Your Creditors can Apply for a Court Order or a County Court Judgement (CCJ) 

You may receive a letter informing you of a court order from your creditor in relation to a debt.

You must fill in any court forms you receive and make a reasonable offer of repayment as soon as you can.

The court will then decide how much money you have to pay back in the form of repayment.

You must stick to whatever the court decides because if you don’t, your creditor has the right to take further action against you. 

Your Creditors Can Issue a Default Notice 

You may receive a letter regarding a default notice from either your creditor or the debt collection agency they hired.

These are normally sent to debtors after they miss 3 – 6 scheduled payments.

They are a warning that your account is about to default. You normally have about two weeks to get your account back on track.

If you feel like you need more time, you can write to your creditor and give him the information they need and they can cut you some slack.

If the default is granted by the courts, it appears on your credit file and stays there for six years unless you clear what’s owed within 30 days.

What are Debt Collectors UK and Creditors Not Allowed to Do? 

They are Not Allowed to Harass You 

It’s your responsibility to be communicative with your creditors regarding information related to your plan to pay off your debt.

However, that does not mean that your creditors or any debt collector they hired can call you every hour of every single day.

There are UK debt recovery laws that debt collectors must follow.

Keep in mind that a debt collector is allowed to call you only within reasonable hours on weekdays and not on weekends, although there are exceptions.

As I mentioned earlier, they also have to oblige if you request that you’d rather be in contact via letter rather than by phone. 

They are Not Allowed to Contact You at Your Workplace 

If a debt collector shows up at your workplace or even calls you at your workplace, these are grounds for you to report them to the FCA.

Provided you didn’t give them authorisation to do so.

This is simply a tactic that shady debt collection agencies employ in order to embarrass you in front of your colleagues.

Not only is it malicious, but it’s also illegal. You can report the debt collection agency/debt collector to the FCA or even sue them in court and be compensated.

They Cannot Threaten You with Legal Powers That They Don’t Have

A debt collector could threaten you by pretending to have more legal powers than they really have.

For example, a lot of debt collection agencies make their letters look like court documents and many debt collectors threaten to send bailiffs.

This type of action is unlawful and deemed a criminal act.

They Cannot Breach Data Protection Laws 

This essentially means that a debt collector is not allowed to share your financial information or any details regarding your debt with your family, friends, employer, or work colleagues.

They are only allowed to deal directly with you. 

They are Not Allowed to Increase Interest Because You Missed Payments 

Your creditors can send you a letter asking you missed payments. They can even issue a statutory demand if you miss too many of them.

However, they are not allowed to increase interest because you missed scheduled money payments. Also, they are not allowed to charge you more for any service that costs less to them.

For example, they cannot charge you £50 for sending you a letter if it cost them less than £50 to send it.

They Cannot Lie to You 

A lot of debt collectors can be very unpleasant but under no circumstances are they allowed to lie to you.

If they pressure you or lie about anything, you must lodge a complaint with their head office.

If the debt collection agency’s response is unsatisfactory, you can report them to the Financial Conduct Authority and the Financial Ombudsman Service complaints.

What Should I Do if a Debt Collector Violates FCA Guidelines? 

Dealing with debt collectors UK is often stressful. But if you feel that a debt collector has breached FCA guidelines, here’s what you can do: 

• Collect evidence against the debt collection agency. Evidence can be in the form of calls, letters, emails and recordings.
  
  Note down the times during which the calls were made to you and what was said during those calls. Be sure to also save and make copies of any letters or documents that were sent to you.
  
  Witness testimonies from neighbours or people who live with you can also work as evidence.  
  
• Complain to your creditors/debt collectors. Once you’ve gathered all of your evidence, you can send this in the form of a letter to whoever has been harassing you.
  
  Inform them that harassment is a criminal offence and a breach of FCA guidelines. They then have 3 days to respond to you informally. This could be via call or email.
  
  A formal written letter may take longer. Also, keep in mind that it’s their duty to inform the FCA about your complaint within 3 days of receiving it. 
  
• Complain to a professional, authoritative body. You should always complain to your creditors first but if that doesn’t work, you can complain to an authoritative body.
  
  This can be the Financial Ombudsman Service, the Citizens Advice Consumer Service or the Financial Conduct Authority.

There are many debt collection agencies in the UK and not all of them behave according to the law.

See what one person posted on a popular forum and the reply that was posted.

Source: Moneysavingexpert

The impact of debt on your credit score

If you get a County Court Judgement (CCJ) on your credit file, it will make borrowing money harder for six years.

In short, you won’t easily obtain a credit card, bank loan or a mortgage until the CCJ expires.

Your Creditors can Issue a Statutory Demand

You may receive a letter from your creditor informing you of a statutory demand.

A statutory demand is a document issued to debtors by creditors who are planning to make them bankrupt.

Keep in mind that a statutory demand is NOT a court document, it is issued by your creditor or creditors.

Plus, creditors can only send you a statutory demand if your debts exceed £5,000.

When you receive a statutory demand, you should never ignore it. You have to prove that you can afford to pay the debt owed to your creditors.

If you are unable to prove this, your creditors will use the statutory demand as well as your response to begin the process of making you bankrupt. 

What if I can’t pay my debts?

If you owe a lot of money to several creditors and struggling to keep on top of payments, consider other debt solutions which I’ve listed below.

Debt Management Plan (DMP)

This is an agreement you enter into with your creditors. A debt management plan (DMP) allows you to pay smaller amounts every month.

You can set a DMP up directly with creditors or you could opt to go through a leading UK charity or a debt management company.

Individual Voluntary Arrangement (IVA)

An IVA is an arrangement you make with creditors to pay off part of your debts or all of them.

You’d have to make the payment through an insolvency practitioner who then shares the money between the creditors you owe money to.

Administration Order

If you have a County Court claim or a High Court Judgement levied against you, an administration order could be the better option.

You make monthly payments directly to the court which is then divided between creditors.

However, you must meet specific criteria to be eligible.

Debt Relief Order (DRO)

If the money you owe is less than £30,000, you could consider a debt relief order (DRO).

However, there are specific criteria attached to DROs which shouldn’t be overlooked.

Bankruptcy Order

If you cannot pay off your debts, a bankruptcy order could be the only option open to you.

You’d need to make an application which an adjudicator assesses. They decide whether or not you can go down this route to be debt-free.

For 12 months of bankruptcy, any non-essential assets you own could be used to pay off creditors.

Declaring bankruptcy no longer has a stigma. But you should be aware that it will have a long-term impact on your credit rating.

As such, it’s a debt solution that needs careful consideration and expert advice should be sought first.

References

1. InDebted, Debt Collectors Survey
2. StepChange, Statistics Yearbook December 2022