What do I do if a debt collection agency contacts me?

Debt collection agencies are frequently confused with enforcement agents, and the distinction is the most useful thing to know. An agency collecting a consumer debt is asking; an enforcement agent acting on a court order has powers. Understanding which one is at your door changes what you should do.

Safety

Step by step

1. Work out who is contacting you.A collection agency acting for a creditor, a company that bought the debt, or an enforcement agent with a court order. Only the last has powers over your property.
2. Do not pay or acknowledge anything yet.Making a payment can restart the limitation clock on an old debt. Establish that the debt is yours and enforceable first.
3. Ask for proof in writing.For a regulated credit agreement you can request a copy of the agreement and a statement of account. Until they provide it, the agreement may be unenforceable — though the debt still exists.
4. Check whether it is actually yours.Mistaken identity and old addresses generate a large share of collection letters. If it is not yours, say so in writing and ask them to prove otherwise.
5. Check how old it is.Limitation periods apply to most consumer debts. If nothing has been paid or acknowledged for long enough, the debt may be statute barred and unenforceable through the courts.
6. Know what they cannot do.They cannot enter your home, take your possessions, pretend to be court officials, contact your employer about the debt, or harass you. There are FCA rules on collection conduct.
7. Put everything in writing.Ask them to communicate by letter or email only. You are entitled to ask, and it gives you a record.
8. Make an affordable offer if the debt is yours.Based on an income and expenditure statement. A free adviser will produce one in a standard format that collectors recognise and generally accept.
9. Never ignore a court claim form.A claim form from the County Court in England and Wales — or the sheriff court in Scotland, or the county court in Northern Ireland — is different from a collection letter. It has a response deadline and ignoring it results in a judgment by default.
10. Complain about conduct if it is out of line.Complain to the firm, then to the Financial Ombudsman Service. Debt collection is a regulated activity and conduct rules apply.

Tips

• The single sentence that changes the conversation is: 'please provide a copy of the credit agreement and a full statement of account'. Send it by email and keep the reply.
• A collection agency is not a bailiff. Enforcement agents act on a court order and you will have had court paperwork first.
• Never make a small payment 'to show willing' on a debt you dispute or that may be statute barred. It can restart the clock.

Common mistakes

• Making a token payment on an unverified debt — It can be treated as acknowledgement, which restarts the limitation period and can revive a debt that was no longer enforceable.
• Ignoring a court claim form because you ignored the letters — A claim form is a legal document with a deadline. Not responding produces a judgment against you without any of your arguments being heard.

If it doesn't work

Questions people ask