Office of Fair Trading warns debt agencies

Office of Fair Trading warns debt agencies

By Roland Gribben Last Updated: 1:22am BST 10/04/2008

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A group of 13 debt collection agencies and financial institutions have been told by the Office of Fair Trading to end practices that include harassing consumers or face the loss of their operating licence.

The consumer watchdog has intervened following a big increase in complaints from consumers about debt collection practices. The increased pressure is seen as another indication of the credit crunch and the build- up in consumer debt.

Some of the companies have been accused of chasing customers who did not owe them anything. Others were said to be failing to properly investigate disputed debts.

They were also said to be contacting debtors at unreasonable times and threatening home visits in disputed cases as well as failing to carry out sufficient checks on data from creditors or credit reference agencies.

David Philpott, OFT deputy director of consumer credit, said: "It is unacceptable for debt collection businesses to engage in unfair practices and we will take action where we find evidence of this."

The OFT has given the companies four weeks to respond before further action is considered. Since Sunday, it has been given new powers to impose fines of up to £50,000 for debt agencies breaching the terms of their licence.

None of the companies has been named because of legal restrictions on the release of information, says the OFT.

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