Innocent people are being targeted by debt collectors over loans they have no responsibility for or any knowledge of. Collection agencies are currently chasing £21bn of debt and being contacted about someone else's borrowing is becoming common practice.

Very often lenders sell bad debts onto third parties at knock-down prices. These agencies then go after the debtor knowing that every penny they recover above what they paid the lender is profit. When the debtor is elusive the debt collection agency may contact ex-partners of debtors or simply someone who has a similar name. When people go into the red and then change address there is no legal obligation for debtors to tell their creditors when they move and it is hard for the collection agencies to trace the person responsible for the debt.

Debt recovery agencies are paid to pursue you, even if they have the incorrect details and simply telling the agency you are not responsible for the debt may not be enough. You need to ask for proof that you owe the money as it is up to the person claiming the debt to show that you owe it. It is worth checking your credit rating too in case arrears or debts show up. This can be done through the main credit agencies, Equifax or Experian.

If you find yourself having problems with a debt-collection firm or feel that they are harassing you check first that the company is a member of the Credit Services Association as you can report it for bad practice. You can contact the Office of Fair Trading as anyone collecting debts must have a credit licence issued by the OFT which also has the power to revoke it.

Rules surrounding debts from the past are complex. For unsecured debts such as credit cards and personal loans there is an expiry date of six years but this is counted from the last communication, not when the debt first occurred. At the end of six years unpaid debts do fall from your credit record but whilst you can't be taken to court for the unpaid debt collection agencies can keep asking you for the money.

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Article referenced from http://www.independent.co.uk/money/loans-credit/borrowing-you-dont-owe-a-penny-but-theyre-after-you-796449.html