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Dear Occupier, pay up now - even if this debt is nothing to do with you
'Fishing' expeditions to trace defaulters cause fear and confusion, says Allison Dickinson
There was a time when you could disregard an envelope addressed to "The Occupier", knowing it contained a mailshot offering you a fitted kitchen or home insurance. But the contents could well be a letter from a debt collection agency - wanting you to dish the dirt on your neighbours.
An increasing number of banks and other lenders are selling old debts to unscrupulous debt collection agencies who aren't afraid of shaming you into paying up, using a technique known as fishing.
This involves sending letters to everybody in an area with a similar name to the person they are trying to trace, if they don't know that person's address. The letters demand money from the person with that name, regardless of whether the recipient is the person intended or not.
Cash spoke to Peter Brown, (not his real name), who recently received such a letter. "It was addressed to 'The Occupier', but when I opened it the letter was asking for information about me - or at least somebody with the same name as me," he said.
"A few days later my next-door neighbour showed me an identical letter he had got in the post, asking for information about me. He was confused and didn't understand it. He thought it had been posted to the wrong house and that it was asking for information about him.
"I did a search on the internet and saw it was from a debt collection company. I checked my credit record and there was nothing on there that corresponded to it at all. I shredded it and my neighbour threw his away."
Beccy Boden Wilks, debt adviser with the Money Advice Trust, says: "Debt collection agencies should not discuss personal details with anyone other than the debtor. Anyone that feels they have been a victim of this practice needs to make a complaint via the company's own internal procedures or to the OFT."
But the practice of writing to neighbours isn't condemned by all.
A spokeswoman for the Information Commissioner's Office (ICO) said it is an acceptable way to trace debtors. "In this situation, it is reasonable under the Data Protection Act for the debt collector to write to the last-known address or neighbouring addresses. But to remain compliant with the act, no personal details related to the debtor should be revealed in the letter.
"Individuals concerned that personal information has not been processed in line with the Data Protection Act can complain to the ICO."
According to the Credit Services Association (CSA), the representative body of the UK collections industry, the majority of complaints stem from incidents of mistracing - where a consumer has been wrongly identified as owing a debt, typically because he or she shares a name with the debtor.
CSA executive director Kurt Obermaier thinks collection agencies are being unfairly blamed for the problem.
"We recognise that tracing is an issue and that access to quality data holds the key to dramatically reducing the likelihood of something going wrong," he says. "The credit reference agencies that provide the data blame the lenders, and the lenders blame the credit reference agencies for the way in which they process the data and execute the matching process. Unfortunately, it is usually the debt collection agency using the information that ends up in the front line."
Some debt collection agencies are using threatening tactics to chase age-old debts that they are not legally allowed to pursue in court.
There is no limit to the amount of time a collection company can ask for repayment of a debt, but they cannot enforce disputed or statute-barred debts through the courts.
Dear Occupier, pay up now - even if this debt is nothing to do with you
'Fishing' expeditions to trace defaulters cause fear and confusion, says Allison Dickinson
There was a time when you could disregard an envelope addressed to "The Occupier", knowing it contained a mailshot offering you a fitted kitchen or home insurance. But the contents could well be a letter from a debt collection agency - wanting you to dish the dirt on your neighbours.
An increasing number of banks and other lenders are selling old debts to unscrupulous debt collection agencies who aren't afraid of shaming you into paying up, using a technique known as fishing.
This involves sending letters to everybody in an area with a similar name to the person they are trying to trace, if they don't know that person's address. The letters demand money from the person with that name, regardless of whether the recipient is the person intended or not.
Cash spoke to Peter Brown, (not his real name), who recently received such a letter. "It was addressed to 'The Occupier', but when I opened it the letter was asking for information about me - or at least somebody with the same name as me," he said.
"A few days later my next-door neighbour showed me an identical letter he had got in the post, asking for information about me. He was confused and didn't understand it. He thought it had been posted to the wrong house and that it was asking for information about him.
"I did a search on the internet and saw it was from a debt collection company. I checked my credit record and there was nothing on there that corresponded to it at all. I shredded it and my neighbour threw his away."
Beccy Boden Wilks, debt adviser with the Money Advice Trust, says: "Debt collection agencies should not discuss personal details with anyone other than the debtor. Anyone that feels they have been a victim of this practice needs to make a complaint via the company's own internal procedures or to the OFT."
But the practice of writing to neighbours isn't condemned by all.
A spokeswoman for the Information Commissioner's Office (ICO) said it is an acceptable way to trace debtors. "In this situation, it is reasonable under the Data Protection Act for the debt collector to write to the last-known address or neighbouring addresses. But to remain compliant with the act, no personal details related to the debtor should be revealed in the letter.
"Individuals concerned that personal information has not been processed in line with the Data Protection Act can complain to the ICO."
According to the Credit Services Association (CSA), the representative body of the UK collections industry, the majority of complaints stem from incidents of mistracing - where a consumer has been wrongly identified as owing a debt, typically because he or she shares a name with the debtor.
CSA executive director Kurt Obermaier thinks collection agencies are being unfairly blamed for the problem.
"We recognise that tracing is an issue and that access to quality data holds the key to dramatically reducing the likelihood of something going wrong," he says. "The credit reference agencies that provide the data blame the lenders, and the lenders blame the credit reference agencies for the way in which they process the data and execute the matching process. Unfortunately, it is usually the debt collection agency using the information that ends up in the front line."
Some debt collection agencies are using threatening tactics to chase age-old debts that they are not legally allowed to pursue in court.
There is no limit to the amount of time a collection company can ask for repayment of a debt, but they cannot enforce disputed or statute-barred debts through the courts.
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