The updated guidance sets out the standards expected of all businesses engaging in the recovery of consumer credit debts, including banks, law firms and tracing agents as well as traditional debt collectors.
It also sets out specific business practices that the OFT considers to be unfair or improper, such as using Facebook and Twitter and other social networking sites to contact debtors, as well as contacting debtors at unreasonable times, or at inappropriate locations, for example when they are a patient in hospital.
More generally, the guidance:
- warns against misuse of continuous payment authority to recover debts, such as making recurring attempts to recover a single repayment.
- highlights the responsibilities of all parties involved in the debt recovery process, including creditors, for the quality and level of information they maintain and exchange with others, in order to avoid the wrong person being pursued for a debt.
- provides greater clarity on the OFT's position on issues such as reasonably queried and disputed debt and statute barred debt.
- makes debt recovery businesses aware that they should adopt appropriate practices and procedures for dealing with particularly vulnerable debtors.
David Fisher, the OFT's Director of Consumer Credit, said:
"In the present economic climate, with many people, including those who may be particularly vulnerable, in financial difficulties, it is crucial they are treated fairly by companies recovering their debts.
"This updated guidance makes clear the standards the OFT expects of all businesses involved in debt recovery, including debt collectors, banks and law firms."
Gillian Guy, Chief Executive at Citizens Advice, said:
"Citizens Advice welcomes the OFT's revised guidance on debt collection. This well set out, clear and concise guidance has helped us advise people in unmanageable debt to challenge bad debt collection practices, such as the selling and buying of debts.
"We now expect all businesses involved in consumer credit debt recovery to follow this guidance, and if they don't, the OFT must take swift action."
