OFT warns debt collectors
Debt collectors must stop using neighbours to trace people who are in debt, the Office of Fair Trading (OFT) has today warned.
Concerns had been raised following the discovery on firm, Link Financial, was using the practice; which saw debt collectors asking neighbours about who was living in a property when chasing debts.
The OFT says this is "unacceptable practice".
The watchdog also said it would be willing to take enforcement action if the practice did not stop - meaning firms could lose their credit licences and go out of business - saying it is a breach of the spirit of the OFT debt collection guidance.
Claims had been made that Link debt collectors were using neighbours to pass on messages about individuals who were being pursued for non-payment.
Nigel Cates, OFT deputy director for consumer credit, said: "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, and we have made this clear in discussions with the Credit Services Association."
The OFT has imposed requirements on Link to confirm it will no longer engage in this practice.
Following concerns raised by Lambeth Trading Standards, Link has now pledged to stop contacting neighbours about people's debt problems.
Mr Cates added: "We are pleased that Link has acted responsibly and taken positive steps to change its policies and procedures.
"If other businesses continue to engage in similar practices we will not hesitate to use our licensing and enforcement powers."
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