Debt Management in the UK - The Proper Ways of Collecting Money The Office of Fair Trading (OFT) has just implemented a new set of rules on UK's debt management plan, specifically debt collection, last June.
The policies are meant to protect borrowers from suspicious activities of these companies.
As a government office, the OFT is an agency that regulates competition law and makes sure that consumers are protected.
Part of the office's responsibilities is taking care of customers' welfare when it comes to buying goods using credit cards.
What are the Existing Regulations on Debt Management in the UK? There's nothing wrong with debt collection, but it can be abusive or aggressive if they're conducted in an alarming frequency, during ungodly hours, or in a disrespectful manner.
The new policies don't lay down the right time for collecting debt payments, but it's intended to make companies enforce sound and acceptable ways of management and collection practices.
The OFT did, however, list down circumstances that are considered abusive.
These illegal practices include: 1.
Collecting payments after office hours.
2.
Violating privacy agreements and telling a borrower's neighbors, even secretly, about the reason of the visits.
3.
Calling borrowers in the workplace.
4.
Displaying any form of violence or harassment, whether verbal or non-verbal.
5.
Threatening borrowers into paying up and producing the money.
New Rules Imposed on Debt Management for UK Firms Another thing the new regulations covered is charging debtors an upfront fee - the initial fee companies charge customers even before doing business with the company.
In the United States alone, this "financial transaction" is considered illegal.
The guidelines state that lenders can only charge clients after an agreement has been signed between the debtor and the financial house.
If such management and collection services are doing any of these forms of abuse, borrowers have every right to protect themselves and actively take necessary action.
To prevent any form of these debt management and collection abuse, victims can do the following: 1.
Record every act of harassment, abuse and aggression that took place.
If debt collectors visit you at outrageous hours repeatedly, make a log of the time and date of those visits.
Include the debt collectors' names as much as possible.
2.
When you observe any form of harassment, the very next thing to do is to contact the company.
Submit a formal letter saying that the debt collection process is unethical and illegal.
As much as possible, also mention that you are protected by OFT's guidelines and that their abusive practices are a violation of the law.
Tell them that their violent practices are criminal offense and subject to legal consequences.
3.
Although these policies are here to protect borrowers, this doesn't mean that their debts can be absolved just as easily.
On that note, complainants should clearly tell how they prefer to meet debt collectors sent by companies.
4.
If the harassment goes on and escalates to more threatening acts and if the debt management company still hasn't replied to your complaint letter, victims shouldn't hesitate to contact the authorities.
The policies are meant to protect borrowers from suspicious activities of these companies.
As a government office, the OFT is an agency that regulates competition law and makes sure that consumers are protected.
Part of the office's responsibilities is taking care of customers' welfare when it comes to buying goods using credit cards.
What are the Existing Regulations on Debt Management in the UK? There's nothing wrong with debt collection, but it can be abusive or aggressive if they're conducted in an alarming frequency, during ungodly hours, or in a disrespectful manner.
The new policies don't lay down the right time for collecting debt payments, but it's intended to make companies enforce sound and acceptable ways of management and collection practices.
The OFT did, however, list down circumstances that are considered abusive.
These illegal practices include: 1.
Collecting payments after office hours.
2.
Violating privacy agreements and telling a borrower's neighbors, even secretly, about the reason of the visits.
3.
Calling borrowers in the workplace.
4.
Displaying any form of violence or harassment, whether verbal or non-verbal.
5.
Threatening borrowers into paying up and producing the money.
New Rules Imposed on Debt Management for UK Firms Another thing the new regulations covered is charging debtors an upfront fee - the initial fee companies charge customers even before doing business with the company.
In the United States alone, this "financial transaction" is considered illegal.
The guidelines state that lenders can only charge clients after an agreement has been signed between the debtor and the financial house.
If such management and collection services are doing any of these forms of abuse, borrowers have every right to protect themselves and actively take necessary action.
To prevent any form of these debt management and collection abuse, victims can do the following: 1.
Record every act of harassment, abuse and aggression that took place.
If debt collectors visit you at outrageous hours repeatedly, make a log of the time and date of those visits.
Include the debt collectors' names as much as possible.
2.
When you observe any form of harassment, the very next thing to do is to contact the company.
Submit a formal letter saying that the debt collection process is unethical and illegal.
As much as possible, also mention that you are protected by OFT's guidelines and that their abusive practices are a violation of the law.
Tell them that their violent practices are criminal offense and subject to legal consequences.
3.
Although these policies are here to protect borrowers, this doesn't mean that their debts can be absolved just as easily.
On that note, complainants should clearly tell how they prefer to meet debt collectors sent by companies.
4.
If the harassment goes on and escalates to more threatening acts and if the debt management company still hasn't replied to your complaint letter, victims shouldn't hesitate to contact the authorities.
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