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Do not engage with illegal claims, says MoJ - 11/09/2009
Collections professionals should refuse to deal with claims management companies that purport to have purchased debts from consumers.
Jan Farenden, deputy head of claims management regulation at the Ministry of Justice, yesterday told Credit Services Association conference delegates that debtors are not allowed to sell on their accounts despite the increasing suggestion from certain claims companies that this is legitimate. "The sale of debts by the debtor is something that is not provided for in law and any business doing that is breaking the law," she said.
Farenden asked collection agencies to report any businesses trying this tactic to the MoJ. In July it removed the authorisation for company Credit Card Killer to operate following this practice. The company is appealing the decision.
If agencies do receive letters, she said: "I think you should write back to them and say you’re reporting them to us. Send the letters back and do not engage in any of this with them."
However, delegates raised concerns that consumers will suffer if they believe they have appointed a third party to handle their debts. "We also have very grave concerns about consumers," said Farenden. "It is consumers that are going to lose out here and they are facing a very difficult situation."
It was suggested that collection agencies write to debtors in this situation giving them a list of free debt advice agencies to contact for help.
Collections professionals should refuse to deal with claims management companies that purport to have purchased debts from consumers.
Jan Farenden, deputy head of claims management regulation at the Ministry of Justice, yesterday told Credit Services Association conference delegates that debtors are not allowed to sell on their accounts despite the increasing suggestion from certain claims companies that this is legitimate. "The sale of debts by the debtor is something that is not provided for in law and any business doing that is breaking the law," she said.
Farenden asked collection agencies to report any businesses trying this tactic to the MoJ. In July it removed the authorisation for company Credit Card Killer to operate following this practice. The company is appealing the decision.
If agencies do receive letters, she said: "I think you should write back to them and say you’re reporting them to us. Send the letters back and do not engage in any of this with them."
However, delegates raised concerns that consumers will suffer if they believe they have appointed a third party to handle their debts. "We also have very grave concerns about consumers," said Farenden. "It is consumers that are going to lose out here and they are facing a very difficult situation."
It was suggested that collection agencies write to debtors in this situation giving them a list of free debt advice agencies to contact for help.
