UK financial sector ombudsman issues fresh guidance on debt collection
20 Oct 2011
The Office of Fair Trading in the UK yesterday came down severely on debt collectors that use social network sites such as Facebook and Twitter to hound people.
In an update, to its debt collection guidance, the OFT branded such practices as "unfair or improper" and also criticised collectors that contact debtors at unreasonable times, or at inappropriate locations, such as in hospital.
According to David Fisher, the OFT's director of consumer credit, with many people, including those who may be particularly vulnerable, in financial difficulties, it was crucial they were treated fairly by companies recovering their debts.
The Financial Ombudsman Service has pointed to the growing problems with debt collectors with complaints about debt collecting rising by 59 per cent in the first half of the year. It added it had upheld one in three debt-collecting complaints.
The debt charity Consumer Credit Counselling Service called for a crackdown by the OFT on debt collectors who broke rules that barred them from using social media to track down debtors.
Only a "handful" of complaints about being chased for debts through social networking sites had been received, so far, the regulator said.
According to a spokesman of the OFT, the office was future-proofing the guidance. He added, the office would continue to monitor the market for that kind of communication.
Debt collectors that refuse to fall in line could be stripped of their consumer credit licences.
According to the new guidance, debtors should not suffer "undue pressure" from creditors. 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 are set out under the rules.
