Creditors are the persons to whom you owe money. They are allowed to take actions to chase after you to recover their due money if you avoid paying. However, they have to conduct their debt collection practices under certain guidelines and regulations placed by legal monitory bodies in the UK.
Yet, there are cases where some creditors use unethical practices to collect their due debts from their debtors. In order to face these challenges from these creditors, you need to be aware of your rights and the limitations that they need to adhere to while conducting debt collection practices.
Don’t worry. With this article, you’ll also learn about unacceptable behaviour and ways to recognise creditor harassment, which involves actions causing distress, humiliation, or feelings of threat.
So, without further ado, let’s get started…
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What Counts as Harassment by a Creditor
In the UK, harassment by creditors is taken very seriously, and there are laws in place to protect consumers from such behaviour. The Financial Conduct Authority (FCA) keeps a close watch on these practices within the UK.
Harassment by a creditor can take many forms, including:
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What Doesn’t Count as Harassment by a Creditor
In debt recovery, not all creditor actions are sorted as harassment. Therefore, you need to be aware of their actions and separate aggressive tactics from legitimate attempts to reclaim owed funds.
Below is a list of actions that don’t count as harassment by a creditor.
- Polite Reminders: Picture a gentle nudge, a letter, or an email kindly reminding you of your debt obligations. These are not considered harassment but simple reminders of what’s due.
- Timely Calls: Imagine receiving a call, but at a time that respects your daily routine. These calls are not only reasonable but are often aimed at finding a solution that benefits both parties.
- Respectful Visits: Now, think of someone standing at your doorstep, but with respect, at a time that doesn’t disrupt your day. They’re there to talk, not to intimidate.
- Taking Legal Actions: Your creditors will take your debt issue to court in order to take legal actions, such as County Court Judgement(CCJ), if you keep ignoring their reachouts.
Who Is Harassing You
You need to know precisely who is harassing you while conducting the debt collection process. It’s because sometimes there are instances where the creditor might hire a debt collection agency to chase after you to recover due debts on behalf of them. Keep in mind your creditors are required by law to notify you if they have passed your debts to a debt collection agency.
In those situations, the debt collection agent assigned by the collection agency might be the person who has conducted unethical debt collection practices. If that’s the case, then further actions are required to be taken against the unlawful debt collection agent, not against the creditor.
Likewise, below is a list of individuals who will interact with you throughout the debt collection process.
- The Original Creditor: Often, the first character in our story, the one who lent you the funds in the first place.
- Debt Collection Agency: Sometimes, the original lender passes the baton to these agencies to follow up on the debt. They’re like the messengers in this tale.
- Third-Party Buyers: Sometimes, your creditor might get tired of trying to collect debts from you. Thus he might sell your debt to another debt collection agency for a fraction of the total debt.
- Bailiffs in England or Sheriff Officers in Scotland: When the story takes a legal turn, these characters step in, representing the law’s involvement in debt collection.
What Can You Do About Harassment by a Creditor?
If you’re facing harassment from a creditor in the UK, you have rights and options to address the situation. Harassment by creditors is not only distressing but also illegal.
Here’s a step-by-step guide on what you can do to deal with creditor harassment effectively:
Collecting evidence is crucial when dealing with creditor harassment as it strengthens your case and provides proof of the harassment you’ve experienced.
Here’s a breakdown of what evidence you should gather:
By gathering this evidence, you provide tangible proof of the creditor’s harassment, which strengthens your position when lodging a complaint or seeking assistance from regulatory bodies or professional associations.
Plus, it’s essential to keep this evidence organised and readily accessible for reference when needed.
In the initial step, it’s advisable to lodge your complaint with the Creditor itself. It will give them an opportunity to address the issue internally.
Here’s a more detailed explanation of the steps involved:
By following these steps, you communicate your grievances to the creditor in a formal and documented manner, setting clear expectations for future interactions and demonstrating your willingness to address the issue responsibly.
If direct communication with the creditor fails to resolve the issue of harassment, you have recourse to escalate your complaint to professional bodies or associations, as well as regulatory authorities.
Here’s how you can take further action by complaining to Professional Bodies or Trade Associations:
You have further options for recourse if your initial complaints to the creditor, professional bodies, or trade associations do not lead to a resolution:
If a solicitor representing the creditor engages in harassment, follow the firm’s internal complaints procedure. If unresolved, complaints can be made to professional associations based on the solicitor’s registration location.
- England or Wales: Complaints can be made to the Solicitors’ Regulation Authority (SRA).
- Scotland: Complaints can be lodged with the Scottish Legal Complaints Commission (SLCC).
- Northern Ireland: Complaints can be directed to the Law Society.
- Financial Conduct Authority (FCA): While the FCA cannot handle individual complaints, they regulate debt collection and can take action against firms for breaching rules. Reminding the creditor of FCA regulations may prompt them to reconsider their actions.
Be Aware of Illegal Money Lenders
It’s crucial to understand the risks and your rights if you’ve borrowed money from a lender who isn’t authorised by the Financial Conduct Authority (FCA), commonly known as a loan shark.
Be aware of,
If you are experiencing harassment or threats from a loan shark, it’s essential to take action:
- Report: Visit GOV.UK to find out how to report a loan shark. Reporting illegal money lending helps protect not only yourself but also others from falling victim to similar practices.
By being aware of the risks associated with illegal money lenders and understanding your rights, you can protect yourself from exploitation and seek assistance if needed.
Need To Find Alternative Ways To Deal With Your Unaffordable Debts With Your Creditors?
Sometimes, you may face difficulties in agreeing to the proposed payment plans from your creditors, especially if they are financially burdensome. Thus, your lenders may even turn towards sorting your unsolicited debts under default payments in your credit report.
In such situations, it is advisable to explore alternative debt solutions that can effectively address your debt-related concerns. In the UK, there are various alternative debt solutions to consider.
However, it’s crucial to keep in mind that each of these debt solutions has specific eligibility criteria. Selecting the right one can lead to debt resolution, while choosing the wrong one could worsen your financial circumstances.
Hence, seeking guidance from a professional debt advisor is a prudent step to take if you find it challenging to determine the most suitable debt solution on your own.
If you need personalised assistance based on your current financial situation, please feel free to complete our online form by clicking here to receive help from our Advice Team.
Final Thoughts
Dealing with aggressive creditors can be tough. However, if you know what they’re allowed to do and what crosses the line, then it can help you protect yourself. Harassment, like constant calls or threats, isn’t okay. But gentle reminders or calls at reasonable times are fine.
If you’re facing harassment, gather evidence like call logs and letters. Then, tell your creditor you want it to stop. If that doesn’t work, complain to a professional body or even the Financial Ombudsman Service(FOS).
Watch out for loan sharks, too. They’re illegal lenders who might use threats or charge crazy interest rates. Report them to protect yourself and others.
If you’re struggling with debt, there are options like payment plans or bankruptcy. Talk to a debt advisor to find what works best for you.
Key Points
- Understanding creditor rights and limits can help you navigate debt collection without facing harassment.
- Harassment from creditors, such as constant calls or intimidation, is illegal and should be reported.
- Gathering evidence of harassment, like call logs and letters, strengthens your case for complaint.
- Directly communicating your discomfort with creditor harassment is the first step towards resolution.
- If direct communication fails, escalating the complaint to professional bodies or regulatory authorities is the next step.
- Loan sharks pose a significant threat with their illegal lending practices, including threats and exorbitant interest rates.
- Reporting loan sharks not only protects yourself but also helps prevent others from falling victim to their schemes.
- Explore alternative debt solutions, like payment plans, IVA, DRO or bankruptcy, if you’re struggling to repay debts.
- Seeking advice from debt advisors can help you understand your options and find the best solution for your financial situation.
- Taking proactive steps to address creditor harassment and debt issues can lead to a more manageable financial future.
FAQs
Illegal money lenders or loan sharks are individuals or groups that lend money without the authorisation from the Financial Conduct Authority (FCA). They often use intimidation and threats for repayment and charge extremely high-interest rates.
Borrowing from a loan shark can lead to an unending cycle of debt due to exorbitantly high interest rates. Additionally, the methods used for repayment collection can be intimidating and threatening.
While borrowing money in itself isn’t illegal, loan sharks operate without FCA authorisation, making their lending practices illegal. Any agreement with a loan shark is not enforceable by law.
If you’ve borrowed money from a loan shark, you’re encouraged to report them to the proper authorities. You’re not legally bound to repay the inflated interest rates charged by these illegal lenders.
You can report loan sharks to the local authorities or the FCA. In some regions, there are dedicated hotlines and services for reporting these illegal activities.
Victims can seek support from various trade and professional associations, the Citizens Advice consumer service, and directly from the FCA. These organisations can offer guidance, support, and in some cases, legal assistance.
No, loan sharks cannot legally enforce the repayment of the loan or the exorbitant interest rates they charge because their lending practices are not authorised by the FCA.
The FCA’s website offers resources and guidance on dealing with illegal lending practices. Additionally, organisations like the Finance and Leasing Association, Credit Services Association, and Consumer Credit Trade Association provide valuable information and support.
While trade and professional associations primarily provide guidance and support, they can take disciplinary actions against their members who violate their codes of practice, including reporting them to regulatory bodies like the FCA.
Yes, many organisations allow you to report loan sharks and seek help anonymously to protect your identity and safety.