Debt collection rules update 'will come in 2009'

18/05/2009

Debt collectors are to face a shift in the rules later this year, a policymaker at the Office of Fair Trading (OFT) has confirmed.

David Philpott, a deputy director at the organisation, said that many firms would welcome the reforms.

In a speech in London, he suggested that a focus of the rule changes would be the accuracy of data on debtors from creditors and credit-checking firms.

Improving the quality of these documents would be a big help to debt collectors - who have to pursue people who owe the money in the first place.

Mr Philpott was quoted by the news source as saying: "Our aim is not to introduce unnecessary burdens on debt collection agencies.

"We will take effective action against businesses that harm or may harm consumers but we also want to establish close links with businesses and consumer representatives to ensure constructive dialogue."

Another common complaint related to the sector which Mr Philpott said would be dealt with was that disputes over specific debts were sometimes not looked into thoroughly enough.

EuroDebt director Kevin Still, commenting on the changes, added: "As a Debt Management Company, EuroDebt believe that it is very important that creditors properly update the credit reference agency files when a client enters a Debt Management Plan (DMP). This is currently undertaken on a very inconsistent basis, so that often when a case is passed out for collection or purchased by a debt buyer – they are totally unaware that the debtor is on a long-term DMP with a licensed Debt Management Company.

"This obviously causes the debtor unnecessary stress where there has already been meaningful dialogue with the creditor with their appointed debt advisor. Similarly, debt collectors should promptly notify the creditors that they are acting for when they are informed that a debtor is on a DMP."

The updated guidance is expected around the end of the year.

Tags; Housing Debt and Bills, Credit Card Lifestyle,

Regional Debt Advice; Debt Help London,

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