OFT 664 Debt collection guidance review consultation

[Nibbler]

Re: OFT 664 Debt collection guidance review consultation

I've been meaning to have a careful look through, but every time I even think about it, something crops up. :o

Hopefully I will be the weekend.

[Amethyst]

Re: OFT 664 Debt collection guidance review consultation

Thanks Nibbler, be appreciated, I can respond with my views, but I think I tend to be rather too tolerant.

[jebedee]

Re: OFT 664 Debt collection guidance review consultation

Having taken a little time to look at this, as well as the day job, there are many good things in there. My issue with this, and I think this is born out by the number of people referring to other documents in this thread, is that there is too much advice in too many places. I believe a response should highlight this "scattergun" approach to consumer protection in relation debt/debt collection. You might find what you are looking for if you know the number 664/1299 or whatever, but it would be better (in my opinion) to have all of this in one easily accesible place. This now feels like a rant, maybe it is.

[Nibbler]

Re: OFT 664 Debt collection guidance review consultation

Thanks Nibbler, be appreciated, I can respond with my views, but I think I tend to be rather too tolerant.

I will get around to it. Promise.

How long have we got? 12 weeks wasn't it? :o :lol:

[Crispybacon]

Re: OFT 664 Debt collection guidance review consultation

Hi Amethyst

Sorry its taken a while to reply, been busy at work and wanted to read this thoroughly. Just some of my thoughts below so far. I may be getting a little 'too into the detail' as I know the document is not meant to be exhaustive!

First thoughts are it is a VAST improvement on the previous guidelines. While I understand Jebedees comment, I think this new version of the guidelines provides far more information on the other documentation/policies/procedures that are in place to protect consumers.

This allows the consumer much more ability to 'join up' this information in pushing back on creditors when they breach multiple guidelines.

Section 1

The first big omission for me is that the guidelines are only intended for consumer debt, and rightly so.

However what the guidelines don't seem to recognise is that many DCA's hold a consumer credit license to pursue consumer and commercial B2B debt.

It is my experience that these DCA's then use threats of action that are only relevant, and intended, for commercial debt when pursuing a consumer debt.

This is even more threatening should that consumer also happen to be a sole trader/trademan as there is a deliberate vagueness in actions that can be taken against them to recover a consumer debt.

This possibly may be the result of many DCA's sending out standard 'threat-o-grams' and not distinguishing between commercial and consumer customers but in my view this simply shouldn't happen at all.

Section 2

There is mention that creditors should:

"establish and implement clear, effective and appropriate

policies and procedures for dealing with debtors and other parties"

Personally what I would like to see is creditors actually publishing what these policies and procedures are. I have been told by too many creditors/DCA's on various matters "That this is their internal policy and procedure" yet they won't actually expand on what those policies are exactly, meaning a lack of transparancy as to whether you are being dealt with truthfully/fairly etc.

2.6 If licensees choose to do business (or continue to do business with) third parties whose conduct is inconsistent with fitness to hold a licence, then their own fitness may be called into question

May?! May be called into question?! If licensees chose to continue to do business with 3rd parties whose conduct is inconsistent with fitness to hold a license then there should be no 'may' about it.

This is just a big get out clause for original creditors to throw accounts to other businesses who they know are dodgy and unethical and wash their hands of it. Personally I think this should be amended so that if it can be demonstrated that a licensee would have reasonably known that a 3rd parties conduct was questionable then their own fitness WILL be called into question.

I also think that if an OC engages a 3rd party then the complaint procedure against that 3rd party should be made clear (i.e. do you go to the third party, OC or both etc). OC's and 3rd party complaints procedures should also be consistent as should their policies and procedures on debt recovery (see point above).

Section 3

"failing to properly advise

the consequences for the debtor, under
circumstances in which he has offered a settlement payment lower than

the total amount owing"

Unfortunately I could see many DCA's/creditors using this as a get out clause for continuing to make threats of court, walking possession orders, charging orders etc.

For me this is a bit of a contradiction as later on in the guidelines it mentions that these sort of threats should not be made before it is possible to to know whether such actions are possible.

But a DCA/creditor could claim that by not making such threats they would 'failing to properly advise the consequences'.

"threatening to refer the debt to a third party debt collection business, with potential cost implications for the debtor, when the creditor has no

current intention of doing so"

I do think this not a good example. How is a creditor, or the OFT, going to prove that the creditor 'has no current intention of doing so'.

"We intended to do it at the time your honour honest, we just never quite got round to it".

Personally I think if a creditor threatens this, and has an intention of referal to a 3rd party then some sort of timeframe should be indicated, and then it MUST take place after this timeframe.

asking or instructing debtors to make contact on premium rate or other

special rate telephone numbers.

There is no mention of mobile phone numbers here. I have been asked by DCA's to call them on a mobile number, which for all intents and purposes are effectively premium rate numbers. Also a mobile number there is no guarantee you are calling someone in the UK, you could be calling someone in Jamaica!!

In this section there are references to the word 'judgement'. I have come across the DCA's using the word judgement as if this is something they already have. e.g. 'We have a judgement'.

Other things to note

There are may references to the common financial statement which is a great thing.

In my experience several creditors have completely disregarded the CFS and have produced their own I/E sheet (which does not conform to the CFS standard) and consequently works in their favour as it does not include key financial elements.

I think there should be something in here that states that if a debtor has provided a CFS containing all the elements the CFS requires then a creditor should respect this and not put pressure on a debtor to provide further information (e.g. valuable household items, car valuations, antiques etc).

Regards doorstep/home visits there is the statement:

not leaving a property when reasonably asked to do so

The word 'reasonably' shouldn't come into the equation. If a doorstep collector is asked to leave someones property then they should go whether they consider it 'reasonable' or not!! This is too subjective as one persons idea of reasonable is not the same as someone elses!

Tracing and trading styles

I have seen too many examples of DCA's sending out 'fishing' letters in trading styles (Capquest and DVSL as a prime example) where the sole intention is to decieve someone into calling them and not being transparent. I couldn't see anything really relating to this other than the vague purpose of intent examples (though I know the guidance is not meant to be exhaustive).

Best

Crispy

[Amethyst]

Re: OFT 664 Debt collection guidance review consultation

Thanks Crispy - very much appreciated.

On Section 1 - what types of threats are they making, I'm afraid I don't know very much about the commercial debt market and what they can do to consumers but not to businesses and vice versa.

Section 2 - I'd like to see WILL but there WILL be cases when it can only be a MAY, and like you argue further down, who is to say what is reasonable ?

Section 3 - I thought the same as you to begin with, but I think it means more in the way of credit file markers, ? So maybe that needs clarifiying further - what other effects might full and final settlements have on individual consumers? some sort of standard form wording, so they can't stick in bits irrelevant threats to try and get the settlemtns bumped up a bit through fear.

Passing to a third party if no intention etc - hmmm a difficult one - by giving deadlines are you forcing creditors to pass debts to third partys quicker giving the debtor less time to come to an arrangement with the OC ? I agree they shouldnt threaten if they don't intend to do it and as you say intention is hard to prove. Deadlines do though put pressure on debtors to sort things before accounts are moved so it could work in the creditors favour as well.

Mobile numbers - we get a few calls from MINT off mobile numbers - trying to pretend they arent a DCA. Fairness wise, we ask DCAs etc to call us on mobile numbers. Possibly something about how they shouldnt be unreognisable mobile numbers and any official calls from the DCA/OC should come from numbers from an accesible list published on their website ? I havent seen any issues with DCAs asking you to call them on mobiles ? if that does happen then maybe a part about how they must supply a formal landline number for return calls if they leave a message etc ?


Making claims they already have a judgment is already against 664 and should be complained about. That you are still getting these types of letters show just how little impact this has.

I agree with the point on the CFS sheet - it is great it is being pushed more, and yes I agree that a CFS financial statement summary should be sufficient information for creditors.

On the letter heading thing, its is tricky as they do have seperate (ish) company identites set up for debt collection and tracing - maybe there should be a rider on the headed paper (prominently!) that Scumbag Solicitors (a trading style of CAPQUEST) type thing ? They also shouldnt be allowed to use PO Box numbers for correspondance.


Jebedee I utterly agree, there are so many agencies and govt departments it is difficult for the average consumer to work out 1) what the rules and guidelines actually are and who they apply to and 2) who they are meant to contact and who they can actually ask to do something about it rather than just have a complaint logged.
There are changes planned in the consumer credit field - moving consumer credit over to the FSA (CPMA or whatever they are going to be called now) may help a little with those regulated by both FSA and OFT at the moment but I don't know how far it will go, or can go.

[Nibbler]

Re: OFT 664 Debt collection guidance review consultation

Just received this from the OFT.

Further to my previous emails relating to this consultation which closes on 2nd June 2011, we have now produced a colour-coded version of the document to assist people in seeing more easily what has changed from the previous version of the guidance. We decided not to opt for tracked changes as the document was not at all reader-friendly in that format, but have colour coded the changes in green and blue.

The full explanation of colour coding is on page 1 of the document.

We trust you find this of assistance Regards

The colour coded version is attached.

[Nibbler]

Re: OFT 664 Debt collection guidance review consultation

Also we now have this on the debt management side.

Revised debt management guidance published - The Office of Fair Trading