As more cases are brought against companies, banks and lenders for harassment, unfair fees and deceptive practices in debt collection, it raises the question of what are considered fair measures in debt recovery.

Massive consumer compensations are big news these days.  With banks paying out £millions to customers for mis-sold PPIs, late fees and charges, debt recovery processes are now being heavily scrutinized by the FCA.  Companies need to be very careful in how they go about recovering debts or they risk serious penalty.

If you’re unsure if your company is following a legal credit control process, this 12-point checklist serves as a handy guideline on what you should and shouldn’t do when pursuing debt. 

  1. Don’t call debtors by phone too early or late in the day to chase money.  If the time is inconvenient, you must allow the debtor to suggest another time.
  2. Don’t pester people by phone several times a day as this is considered harassment.
  3. You are not allowed to enter the home or place of work to pursue debts or act as a bailiff.
  4. You must not pursue the debtor through their social media sites.
  5. If the debtor requests information about the debt, you must provide it.
  6. You must not speak to anyone other than the debtor unless they have authorised someone else to speak to you on their behalf.
  7. You should not pressure the debtor to borrow from other sources to settle your debt, nor should you coerce them into selling their property.
  8. If the debtor can’t pay their debt in full, you must accept their willingness to pay in installments and arrange a suitable payment plan.
  9. You must never header your letters with names or logos that suggest your correspondence is from an external law firm or debt collection agency.  Misleading the recipient into thinking the letter is from anyone other than your company is illegal.
  10. You must never threaten the debtor physically or verbally.
  11. You must not imply that court action has started when it hasn’t.
  12. You must listen to the debtor if they claim the debt isn’t theirs and investigate further.

The smartest move in debt collection is to make sure you have a clear procedure in place from the start.  Make sure your payment terms are communicated at the beginning of the relationship and stay on top of late payers as soon as they become a problem.  If you are still struggling to recover debts after you have called and contacted your debtor at reasonable times and frequencies, employ a professional debt collection agency to take over.  To find out more about legal debt recovery practices, contact P&J Debt Services.