Creditor Harassment In The United Kingdom (UK)


Are creditors or debt collectors harassing you?

It is a criminal offence for a creditor to harass you (bully or repeatedly annoy) to get you to repay.

Harassment includes:

a) threatening you with a criminal prosecution when you can't be prosecuted

b) pretending to be a court official

c) sending letters which look like court forms

d) telling other people, such as neighbors and your employer, about your debt to force you to pay.

More about unlawful debt collection business practices by topic:

Debt Collector Communication
False Representation Of Authority And/Or Legal Position
Physical/Psychological Harassment
Deceptive And/Or Unfair Methods
Charging For Debt Collection
Debt Collection Visits
Pursuit Of Debt After The Limitation Period

The above topics and to find advice and information on consumer rights can be found at the UK Government Office Of Fair Trading.

If you are being harassed, keep a record of exactly what has happened and when, and report it to your local trading standards department at your local council. A creditor or debt collection agency could have its credit licence taken away if it is found guilty of harassing you.

If a creditor takes court action against you without taking reasonable steps to come to a realistic payment arrangement with you, you could defend (argue that you should not have to pay) the part of the creditor's claim that is for the court fee and costs.

Other legal protection for people in debt

There are many laws and regulations designed to help make sure that any organizations you owe money to behave reasonably and that any credit deals you sign up for are fair.

Credit agreements that are fair

The Consumer Credit Act in the United Kingdom contain certain parts that permit a court to rewrite any agreement or credit (this includes a mortgage) if it believes that the agreement is an 'extortionate credit bargain'.

This means that it:

a) grossly contravenes the ordinary principles of fair dealing', for example, where you have been a victim of sharp practice; or

b) has payments which are 'grossly exorbitant' (being too high compared with agreements that are similar).

Courts have been using this law in the United Kingdom to reduce loans that have a very high interest rates, especially in cases where the person was pressured into signing the agreement. But this is not easy to prove, and if you think you have a case, you should get expert advice from the trading standards department at your local council or a adviser.

Unfair contract terms

When you buy something or sign a contract for credit, all the conditions and terms of the deal should be spelled out. The law states that a business can't enforce any part of a contract if it is not in plain English or if it is unfair (but this doesn't mean a price that you think is unfair).

These regulations in place prevent creditors from:

a) charging a much higher rate of interest to customers who have missed payments; and

b) taking customers by surprise with hidden or unexpected small print or agreements that contain unclear wording.

If you believe that there was a term in a agreement of credit that you were not made aware of when you took it out, contact an adviser or the trading standards department at your local council.

Credit licence

Anyone who offers credit or collects debts must have a licence from the Office of Fair Trading. Credit providers and debt collectors can legally enforce the terms of their credit agreements only if they had a licence when the agreement was signed.

Most credit agreements that consumers sign are 'regulated agreements' under the Consumer Credit Act. This means that they must be explained and in writing, among other things that include:

a) the rate of interest; and

b) the amount of money you are borrowing; and

c) how long you will be paying the debt back.

Creditors who use regulated agreements to arrange credit can't take court action against you, only if such agreement was not signed by you. Creditors cannot enforce payment if they haven't given you an agreement to sign.

You can get advice on other details of the Consumer Credit Act from:

a) an solicitor or adviser;

b) the trading standards department at your local council; or

c) a advice centre or a Citizens Advice Bureau.

Pressure to sign

A creditor may not be able to make you repay a loan if you have been put under a lot of pressure from someone you know to sign up for it. The most likely situation is if your wife, husband or partner persuaded you into signing a secured loan agreement (such as a mortgage loan, for example) which was entirely for their business. But you must also show that the lender didn't explain to you how the loan worked, and that they should have told you to get independent advice before signing.

If you are in this situation, you will need to get legal advice from a specialist because this law is complicated,.

Limitation period

The Limitations Act of 1980 gives creditors a maximum amount of time to start legal proceedings after the last payment or written acknowledgement (note or letter) from the debtor. For most debts, this is six years, or 12 years for mortgages. If you have not paid anything towards a debt or 'acknowledged the debt' in writing (for example, by writing to the creditor about the debt) for more than six years, you should get advice from a specialist before you speak to the creditor about an arrangement to pay what you owe.

The above information was written in good faith, but we cannot guarantee accuracy or credit approval.