What are debt collectors?

Debt collectors may contact you about an unpaid debt, they will usually work for a debt collection agency (DCA). Whist having a DCA involved in collecting money you owe may be scary, you shouldn’t worry, they have limited powers to recover the debt. Debt collectors are not bailiffs; they have no additional powers and are unable to remove any of your items.

There are three main types of debt collector:

• Inhouse debt collectors are usually still be employed by the creditor that you owe the money to, the debt will just have been passed to an internal team to collect. The inhouse debt collectors may have a different name to the creditor, this is to make it seem like the debt has been passed onto someone else and so more intimidating.  
• Third party debt collectors are usually a different organisation to who you owe the money to. The debt collector will be paid by the creditor to recover the debt on their behalf.  
•  Debt purchase companies generally buy debts from creditors for a reduced amount. As they now own the debt, they will be trying to recover money for themselves.

For the collection of most types of debt, debt collection agencies should be registered with and regulated by the Financial Conduct Authority (FCA) as they will be collecting debts regulated by the Consumer credit Act (CCA). These include debts owed to most banks such as loans and credit cards. They should also hold a consumer license issued by the FCA.

If the debt being collected is not a Consumer Credit Act regulated debt, then a debt collection agency does not need to be regulated by the FCA. Debts that are not regulated by the CCA could be things like energy arrears, rent arrears, debts to friends or family or trade debts if you run a business.

You can check the FCA Financial Services Register to check if the DCA if registered.

How do debt collectors work?

Debts may get passed to debt collectors when the original creditor has not been able to recover the money owed and want to try another way of collecting the debt. If the creditor still thinks there is a realistic chance of recovering the money owed, then they are more likely to use inhouse or third-party debt collectors.  

If the creditor has decided that there is little benefit in continuing to collect the debt, they are more likely to sell it to a debt purchasing company. The debt purchasing company will then try to recover the debt through their own DCA.

It is not always clear what type of debt collector is being used. It would be useful to find this out so you know who you are dealing with, you can ask the DCA to clarify whether they are acting on behalf of the creditor or whether they have bought the debt themselves from the creditor.

It can be confusing, if you’re unsure call us on 0808 4000.  We can try and clarify who is collecting the debt and support you with how to deal with the debt collector.

What debt collectors can and cannot do

What can debt collectors do? 

If a debt collectors believes that the debt is owed, they can contact you and ask you for payment, this can be via the phone, letter, email or a home visit. However, it’s important to remember that they are not bailiffs and do not have the powers to remove any of your items. Some debt collectors may imply or pretend that they are going to remove items if you don’t pay them. This will be a tactic to try and scare you into paying the debt even if you can’t afford it.

A bailiff will usually only be involved in the recovery of the debt if you have already been taken to court for the debt and not paid as the court instructed. There are some debts where a court judgement is not needed such as debt owed to HMRC or council tax arrears. If you’re unsure whether it is a bailiff or a debt collector, please call us on 0808 808 400 so we can help. Our Dealing with bailiffs guide also has more useful information if you think it might be a bailiff that has contacted you.

If the collection agency is regulated by the FCA they need to follow debt collection guidelines issued by the FCA. The DCA must not:

• contact you at unreasonable times and should take account your requests of when, where and how to be contacted;
• act in a way that may publicly embarrass you;
• disclose details of the debt to anyone unless they have confirmed that person owes the money;
• act in a threatening manner;
• visit at an inappropriate location;
• enter a customer’s property without yourconsent or an appropriate court order; or
• refuse to leave your property when reasonably asked to do so.

If a debt collector does any of the above and refuses to stop, you can look to make a complaint. See the How to complain about debt collectors’ section for more information. Our Harassment by creditors guide also has more useful information.

In some cases, the debt collector may not be FCA regulated because the debt owed is not a consumer credit debt. In these cases, the debt collector may have different guidelines to follow depending on the type of debt. Call us on 0808 808 8000, one of our advisers can find out what rules the debt collector should follow.

How debt collectors find you

Debt collectors have a few ways of finding where you live. When you take out a credit debt such as a loan or credit card, you give the creditor consent to check your credit report to see whether they should lend to you. When a debt is passed to a DCA, this consent stays with the debt, so the DCA can check your credit report. The DCA can then use the information on the file, such as the latest address to find where you are living. Your credit file may also show linked addresses that you, or someone you are financially linked to has lived. Our Credit reference agencies guide also has lots more useful information.

You may have given your new ‘forwarding address’ when you left you previous property. The DCA may have employed a tracing agency to find you. Tracing agencies will use a variety of sources such as court records, credit reports, tax records and vehicle history.

How long can debt collectors chase you?

You may find that an old debt has been passed to a debt collector to recover the money owed. The Limitation Act 1980 sets out the rules on how long a creditor (who you owe money to) has to take certain action against you to recover a debt. If a debt is barred under statute, it means that by law (the Limitation Act), the lender has run out of time to use certain types of action to try and make you pay the debt

The limitation period can be different depending on the type of debt. For unsecured credit debt, such as a credit card or loan, the limitation period is 6 years. The six years will start running from the creditor was able to take court action against you, this will generally be when you first started to miss payments. For the debt to be statute barred the following would need to have happened:

• the creditor has not already started a county court claim for the debt; and
• you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years; and
• you have not written to the creditor admitting you owe the debt during the last six years.

If a county court judgment (CCJ) has already been obtained, then the debt can no longer be statute barred. If you think you are near the six-year limitation period or unsure what to do call us for guidance and support on 0808 808 4000.

If you find a debt is likely to be statute barred, this doesn’t mean that the money isn’t owed, it means that the creditor has ran out of time to take certain types of action against you as such as obtaining a CCJ. Financial Conduct Authority (FCA) guidance says that a creditor should not recover a debt which is statute barred,

You may find the debt collector suggest that they can still try to recover the money through the court and using bailiffs. This will generally be done to scare you into paying even though you don’t have to. A debt collector can still ask for money. However, you can choose whether to pay. If you unsure, call us for some free advice on 0808 808 4000.

Our Statute barred debts guide has more guidance on whether a debt may be statute barred. The guide also explains how The Limitation Act 1980 works for different types of debts if the money you owe is not an unsecured credit debt. The guide also a sample letter you can use to write to debt collector asking that they do not collect the debt as it is statute barred.

Common questions about debt collector behaviour

What time can debt collectors visit your home? 

Debt collectors don’t tend to have typical visiting hours. You may find that the debt collector will try and visit you when they think you are more likely to be in your property, this may be early morning or later in the evening. You have a right to refuse entry into your property or even to talk to them, despite this it can still an unpleasant experience.

The FCA guidance explains how debt collectors should behave, this includes, ‘not contacting customers at unreasonable times and taking account of the customer’s when, where and how to be contacted’. Whilst the guidance doesn’t give exact times that a debt collector can contact, you can, for example, argue that it is unreasonable to be contacted early in the morning or late at night, especially if you have requested this. You should write to the debt collection agency outlining when and where you would prefer to be contacted and explain why.

What do debt collectors look like? 

Debt collectors do not generally where a uniform, they must have ever carry ID badges for identification.

You can ask the debt collector for proof of identity by asking for their ID badge. You can then contact the DCA that the debt collector is working for. You are under no obligation to speak to the debt collector so if you are unsure, don’t speak to them.

How to deal with debt collectors safely

First steps when contacted 

It can be worrying when you are contacted by a debt collector. However, you can set the boundaries about how and when to be contacted. Here are some tips to try and help when you are first contacted

• Don’t let the debt collector in to your property, they have no right of entry.
• Try to stay calm, remember that they have no powers other than to ask you to pay which you can refuse.
• Ask for contact to be in writing only. Tell them that you are not going to discuss the debt face to face.
• Check which DCA the debt collector is working for and ask for ID.
• Ask for evidence of any alleged debt.

Our Credit agreements – getting information can help if you if you are unsure about an alleged credit debt and the DCA aren’t giving you evidence of the debt being owed. This won’t work for other types of debt though. if you find that that you are having difficulty getting the evince you need, call us on 0808 808 400.

How to complain about debt collectors

If our debt is being collected by an FCA regulated debt collector, you can make an initial complaint to the DCA regarding the behaviour of the debt collector. We would suggest putting the complaint in writing, outline the things that the debt collector has done which you class as harassment, you can use the FCA guidance we covered earlier to help. To help, you could keep a diary of the dates, times and action of the collector which you can then use to help make your complaint.

If the DCA do not respond to your satisfaction within eight weeks, then you can escalate a complaint to the Financial Ombudsman Service (FOS). Our Complaining about your lender guide is also relevant for DCA’s Regulated By the FCA. If the DCA is not FCA regulated, you can still complain but the process will depend on the type of debt. Call us on 0808 808 4000 and our advisers will help you find the best route for making a complaint

Special cases

How to deal with business debt collectors 

If you have debt collectors collecting business debt, it might be that debt is not CCA regulated and do not therefore have to follow FCA guidance. How to deal with the debt will depend on who the money is owed to. If you are still self-employed, call Business Debtline on 0800 197 6026 for help on what to do.

What happens if you ignore debt collectors

If you decide to ignore a debt collector, you may find that they increase their efforts to contact you initially. If you are choosing not to speak to the debt collector, then this is fine. However, it may be beneficial to contact the DCA, so they know you are trying to resolve the outstanding debt.

You should treat the debt the same as any other non-priority debt that you have, you can make them offers based on your ability using a budget sheet or explore other possible debt solutions. My Money Steps can help you work out what you can afford. Our Ways to deal clear you debt guide can help you find a debt solution.

If the DCA want to force you to pay, then their only option would be to obtain a County Court Judgement CCJ. If they did this, you would receive court papers where you are able to show your financial situation and make an offer of payment. A CCJ is marked on your credit file for six years and affect your ability to obtain credit. See our Court Action guide for more information.

To avoid any action, it’s best to try and deal with the debt as early as possible. Call us on 0808 808 4000 and we can help you find a solution to your debts.

How National Debtline can help

Dealing with debt collectors can be very stressful. If you need some support, we can reassure you that you are not alone. Call us on 0808 808 4000 for free, confidential advice from experts. 

FAQs

Can debt collectors enter my home without permission? 

No, debt collectors have no right of entry, you do not have to let them in.

What is the 11-word phrase to stop debt collectors?

The 11-word phrase often cited is ‘Please cease and desist all calls and contact with me immediately.’ However, this phrase is not legally recognised or supported by guidance in England or Wales.’

Do I have to pay if my debt was sold? 

If the debt is owed and a company has bought the debt from another creditor, you’ll need to repay it unless it is statute barred. See the How long can debt collectors try to collect in the UK? Section in the guide for more information.

Can I negotiate to pay less than the full amount? 

You can offer to less to clear the debt by offering a full and final settlement. Our Full and final settlement guide can explain if this might be an option for you.

What happens if my debt is over six years old? 

Depending on who the debt is owed to, if it’s been six years or more since you made a payment or acknowledged the debt in writing the debt may be statute barred. This means that they may not be able to enforce the debt through the court. Our Statute barred debts guide explains this in more detail or call us on 0808 808 4000, our adviser can help you find out if your debt might be statute barred.

Are debt collectors the same as bailiffs? 

No debt collectors are not the same as bailiffs. Bailiffs have the power to take and sell property that you own to repay the debt; debt collectors do not have this power. Debt collectors have no extra power to recover the debt beyond the original creditor.