OFT announces 'neighbour tracer' debt crackdown

18/05/2009

The Office of Fair Trading (OFT) has announced that debt collectors are sometimes "breaching the spirit" of industry rules.

Tracing firms were under the spotlight in a new report from the organisation, which was put together after action was taken against London-based Link Financial.

The collector has now agreed to change its practices, after the OFT found that it had been using information gathered from the neighbours of debtors to trace their whereabouts.

This practice can cause embarrassment to those who owe money - as in many cases others won't know about their financial problems.

The OFT suggested that this technique was commonly employed among some collectors.

Nigel Cates, deputy director for consumer credit at the organisation, added: "Using neighbours to pass on messages to trace subjects is an unacceptable practice that contravenes our debt collection guidance.

"It has the potential, whether unintentional or not, to lead to the disclosure of private financial affairs and to cause distress and embarrassment … We are pleased that Link has acted responsibly and taken positive steps to change its policies and procedures."

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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