OFT warns debt collectors as complaints soar

Thirteen debt collection firms and financial institutions have been warned by the Office of Fair Trading (OFT) for a series of errors as complaints rocket.

Over the last year, Consumer Direct received 6,824 complaints about debt collectors, a rise of 38 per cent, and the OFT has now singled out 13 firms.

For legal reasons the firms cannot be named but they were found to be failing to meet minimum standards.

Serious complaints and failures included chasing consumers for debts they did not owe, not investigating disputes, and contacting debtors at unreasonable times and intervals, and threatening home visits when debts were disputed.

Further problems included agencies refusing to deal with third party consumer representatives such as Citizens Advice, and not carrying out sufficient accuracy checks on data received from creditor clients.

Citizens Advice credit and debt policy officer Peter Tutton said: "We see far too much evidence reported by our bureau network of the sorts of unfair debt collection practices.

"We are very pleased that the OFT has started a new era of credit regulation with a clear message to firms on expected standards of conduct. This is a solid first step towards finally getting rid of unfair debt collection practices."

David Philpott, OFT deputy director of consumer credit, said: "It is unacceptable for debt collection businesses to engage in unfair practices and we will continue to take action where we find evidence of this.

"One of our main priorities is to protect consumers who may already be vulnerable as a consequence of serious debt problems."

The firms involved now have four weeks to respond to the OFT and prove they have turned their practices around, or the watchdog can take further action.