People who have taken out a loan and unable to pay back on time often live with the fear that they will be threatened by the creditors and debt collection agencies. They believe that the Debt Collection Agencies are scrupulous and will go to any extent to extract money from them. But this is not true. The fact remains that unless you have borrowed money from criminal or person having underworld connection, you have very little to worry about.
Debt Collection Agencies
Debt Collection Agencies are organisations that are hired by other companies to collect unpaid debts. These agencies collect debts from the creditors on behalf of the companies. The companies feel convenient and tension free after hiring a debt collection agency. Some larger companies actually have their own debt collection departments as part of their businesses, but most will farm such work out to specialist collection agencies.
Guidelines for Debt Collection Agencies
Some ruthless debt collection agencies intimidate people and lead them to believe that they have greater powers than they actually do. But there are many regulations and guidelines set for them which they have to strictly follow. Debt collection protection laws exist in many countries and most certainly in the UK. This law actually gives very little power to the debt collector and a lot of protection to the debtor.
These include:
* You can be contacted by the debt collection agencies only at sensible hours. No collection agency can contact you late at night or while you’re at your work place.
* They even cannot contact your friends if you have clearly mentioned not to call them in your absence.
* They cannot engage in any kind of cruelty, abusiveness, impolite use of language or in acts that would be considered unprofessional.
* Debt collectors cannot enter your home or take away your possessions.
* They are not allowed to make false claims about the amount you owe.
* They cannot lie about their official status or legal rights, threaten to take your property or have you arrested or have your wages garnished (known as attachment of earnings in UK).
* They can never collect more than the amount which you owe to the company they are working for.
The debt collectors who are sensible will try to establish positive relations with the debtors. They behave in a polite manner and convince the debtors to pay back the money.
In the UK, debt collection agencies are covered by the Office of Fair Trading, who set out guidelines on how they should operate, and list examples of unfair practices, such as harassment or pretending they have more powers and rights than they do.
Some of the debt collection agencies also discuss with their debtors how the debt might be repaid. Such an agreement can even involve agreeing to write off a proportion of the debt. Fair debt collection practices are desirable and the debt collection agencies are entrusted to work in accordance to the clearly laid down instructions and agencies collect the unpaid debts based on the instructions.
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