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Creditor Harassment

Are you being harassed by your creditors for debts?

It is a criminal offence for creditors to harass you about your debts under the Administration of Justice act 1970. If you feel a creditor is bordering on harassment there are different ways to identify it. We have outlined these below.

  1. Section 40 of the Administration of Justice Act
  2. The Office of Fair Trading Code of Guidance
  3. How to deal with harassment by your creditors

Section 40 of the Administration of Justice Act

“S40 Punishment for unlawful harassment of debtors.

  1. A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract he-
    • harasses the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;
    • falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;
    • falsely represents himself to be authorised in some official capacity to claim or enforce payment; or
    • utters a document falsely represented by him to have some official character, or purporting to have some official character which he know it has not.
  2. A person may be guilty of an offence by virtue of sub-section (1) (a) above if he concerts with others in the taking of such actions as is described in that paragraph, notwithstanding that his own course of conduct does not by itself amount to harassment.”

Office of Fair Trading Code of Guidance

Many activities could count as harassment. It is important to note that “anything done by a person which is reasonable” when trying to recover a debt, is not considered to be harassment. Both the Office of Fair Trading and Trade Associations (run by the credit industry) have produced guidance on what activities may be considered harassment and should therefore be avoided by creditors. The following list is taken from the new Debt Collection Guidance for holders of consumer credit licences.

Creditors are warned by the Office of Fair Trading under the Debt Collection Guidance that the following practices are "considered unfair":

“IT IS UNFAIR TO COMMUNICATE, IN WHATEVER FORM, WITH CONSUMERS IN AN UNCLEAR, INACCURATE OR MISLEADING MANNER.”

This includes:

  • Letters that look like court claims
  • Not making it clear who the company is or what their role is
  • Unhelpful legal language
  • Not giving balance statements about the debt when asked
  • Contacting you at unreasonable times even when asked not to
  • Asking you to contact them on premium rate phone numbers.

“ THOSE CONTACTING DEBTORS MUST NOT BE DECEITFUL BY MISREPRESENTING THEIR AUTHORITY AND/OR THE CORRECT LEGAL POSITION.”

This includes:

  • Claiming to work for the court or be a bailiff
  • Implying action can be taken that is not legally possible such as implying they could take your property
  • Using a business name or logo that implies they are a government body
  • Implying that court action has been taken against you when it hasn’t
  • Implying not paying your debt is a criminal offence
  • Threatening to take court action in England if you live in Scotland or the other way round.

“ PUTTING PRESSURE ON DEBTORS OR THIRD PARTIES IS CONSIDERED TO BE OPPRESSIVE.”

This includes:

  • Contacting you too frequently
  • Pressurising you to sell property or take out more debt
  • Using more than one collection company at the same time or not telling you when your debt has been passed to another company
  • Pressurising you to pay in full or in large instalments you cannot afford
  • Making threatening gestures or statements
  • Ignoring disputes about whether you owe the money
  • Trying to embarrass you in public or threatening to tell a third party about your debts such as a neighbour or your family.

“ DEALINGS WITH DEBTORS ARE NOT TO BE DECEITFUL AND/OR UNFAIR.”

Examples include:

  • Sending letters addressed to “the occupier” or discussing the debt with someone without knowing if they are you
  • Refusing to deal with an adviser acting on your behalf
  • Not accepting reasonable offers or passing on payments you make
  • Refusing to freeze action if you dispute the debt.

“ CHARGES SHOULD NOT BE LEVIED UNFAIRLY”.

Examples include:

  • Claiming collection costs when the original credit agreement didn’t allow this to happen and making you think you are legally liable for the costs
  • Not putting the specific amounts that can be added for collection costs in the original credit agreement
  • Adding unreasonable charges.

“ THOSE VISITING DEBTORS MUST NOT ACT IN AN UNCLEAR OR THREATENING MANNER.”

  • Collectors should explain the reason for any visit and give you notice of the time and date they will call
  • They shouldn’t visit if they know you are ill or vulnerable and if they find you are unwell or distressed they should leave
  • They should not come in if you do not want them to and should leave when you ask them to
  • They shouldn’t visit you at work or somewhere like a hospital.

How to deal with Creditors who are harassing you

There are many different ways to deal with harassment from Creditors. If you are worried about your debts and your creditors you can contact us at Debt Advice for free help and information. We have also outlined some steps below that you can take to deal with creditor harassment.

  • You could write to them about your concerns with how they have been towards you. Mention your awareness of section 40 of Administration of Justice act and ask them to avoid any further harassment. Tell them how you prefer to be contacted and ask them to confirm agreement to it. A letter at this stage may avoid the need to take further action against the company.
  • You could tell them you are aware of the OFT Debt Collection Guidance and that you are considering making a complaint.
  • If trading standards will not act on your behalf you may want to contact the office of Fair Trading directly.
  • The creditor may be part of a trade association that has a code of practice. You could find out and write to them with your complaint. A code of practice is not legally enforceable, but they may take some sort of action against their members.
  • You could also pursue your own prosecution in the Magistrates Court. This could involve considerable cost so you need to obtain proper legal advice first.
  • If you are getting harassment calls from a creditor and you are with BT, you may want to take advantage of their "Choose to Refuse" service. If you are with a different provider, they may provide a similar telephone service.
  • You could refer to the "Malicious Communications Act 1988" which deals with the sending of letters or articles for the purpose of causing distress or anxiety. In order for prosecution in this way the letter would need to have:
    • A message which is indecent or grossly offensive
    • A threat; or
    • information which is false and known or believed to be false by the sender.

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