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Dealing with harassment from lenders

If you are in debt you may be feeling stressed by the constant payment demands. Although lenders are entitled to pursue you for any outstanding money, there are set guidelines in law to prevent lenders from undue harassment.

These are in accordance with the Office of Fair Trading – Debt Collection Guidance and the Consumer Protection from Unfair Trading Regulations of 2008.

Office of Fair Trading – Debt Collection Guidance

Under this guidance certain types of behaviour are described as ‘unfair business practice’ and any lender acting in this way could risk losing his consumer credit licence. These types of behaviour are defined broadly as:

  • Using excessive pressure on customers, including making threats, or shaming customers into settling the debt by threatening to reveal their indebtedness to people such as employers and neighbours
  • Contacting customers in a deceitful way e.g. misrepresenting their position in law by pretending to be a court official
  • Misleading customers or communicating in an unclear manner e.g. issuing letters to customers that appear to be court forms, or using confusing legal language
  • Using unfair collection methods, such as refusing to deal through the customer’s representative and dealing direct with the customer instead
  • Applying unreasonable charges e.g. costs that bear no resemblance to the cost of recovering the debt
  • Acting in a threatening way when visiting customers; for this reason any visits should be by prior arrangement and with the customer’s agreement

Consumer Protection from Unfair Trading Regulations (2008)

These regulations offer additional protection to consumers. Under the rules any lender found guilty of ‘aggressive commercial practices’ can be prosecuted by the Office of Fair Trading (OFT) or the Trading Standards, which could mean a fine, or imprisonment in some circumstances. Under OFT guidelines behaviour that constitutes ‘aggressive commercial practices’ includes:

  • Contact from a debt collector at unreasonable times or unreasonable places, such as a place of work
  • A threat by a debt collector to take legal action for the collection of debts that are not enforceable i.e. that cannot be collected through the courts

What you should do

If you feel that a lender is harassing you, the first thing to do is to keep a record of what has happened and the dates of these occurrences. Next, contact the lender by letter outlining your concerns. Make sure that you send the letter by recorded delivery and point out that you understand the requirements of the Office of Fair Trading – Debt Collection Guidance and the Consumer Protection from Unfair Trading Regulations of 2008. The letter should state how you would like to be contacted and that you are considering making a complaint in accordance with the guidelines.

Often, a letter of this nature will be sufficient to ensure that the lender acts within the law in future. However, if you still need to make a complaint you should contact Consumer Direct at: www.consumerdirect.gov.uk. They can advise you over the phone or put you in contact with your local council’s trading standards department for further help and advice. The trading standards department will decide whether the lender has acted outside the guidelines and whether he should be prosecuted

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