CCCS | InfoCentre | Northern Ireland | Debt collection agencies

Debt collection agencies

Many creditors do not want to deal with defaulted accounts in long-term arrears and they usually pass to collection agencies to collect.

Collection agencies are companies that specialise in buying and collecting debts. They can either buy the debt from the original creditor or are paid a percentage of the amount they collect.

Once a debt passes to a collection agency you pay them direct and in most cases, the agency can stop interest and charges. There is no guarantee that they will agree to suspend interest and charges.

You can still arrange an affordable monthly payment at this stage and you must stick to any offer you make.

Collection agencies are not bailiffs and they do not have any more legal powers than the original creditor. They can contact you by letter or telephone and in rare cases may call at your home. Collection agencies still have to follow Office of Fair Trading (OFT) guidelines on fair debt collection.

Free debt advice

If you are having problems with collection agencies, please call our Helpline for free debt advice or use CCCS Debt Remedy. In just a short space of time we can tell you what options you have, and what we can do to help your situation.

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FAQs

Why is a collection agency contacting me about a debt that is not mine?

If the debt relates to a previous occupier in your property, contact the creditor and tell them the person no longer lives there.

Sometimes debt collection agencies try to find debtors using public records such as the electoral roll. If you have similar details, they may try to contact you about someone else’s debts. Write to explain they have mistaken you for someone else and ask them to stop contacting you.

In both cases, creditors may expect some proof that you are not the person they are looking for. If you have any problems, make a complaint to the creditor.

Are debt collection agencies always a different company from the original creditor?

No. Sometimes creditors will send letters that seem to be from a debt collection agency, but are actually the same creditor using a different trading name.

If you receive any letters from an unfamiliar company relating to arrears or unpaid debts, check the small print on the bottom or rear of the letter. This may confirm that the company is a trading name of the original creditor.

Who can I speak to if I have a complaint about a debt collection agency?

To make a complaint about a debt collection agency you should complain to them directly in the first place.

You can also contact the original creditor to complain.

Collection agencies must have a consumer credit licence to trade, so if your complaint is not resolved within eight weeks it can be referred to the Financial Ombudsman Service who can investigate the matter on your behalf.

Many collection agencies are also members of the Credit Services Association who have their own complaints process.