Debt Collecting Merry-Go-Round

[Anthony Reeves]

Some of you will know that the harassment by large organisations of people who don't owe money or who genuinely have not got it is a pet subject of mine and have successfully sued a few banks recently. Anyway, I'm in the process of writing a book on this topic called "The Debt Collecting Merry-Go-Round. How to deal with harassment and unfair practice from debt collectors".

If anybody has any interesting stories, I would be pleased to receive them for possible use in the book. Also, if you need any assistance re this type of issue, please get in touch.

The book should be out next May.

Anthony Reeves

 

[Geoff T]

Anything in particular you're looking for?

(I've heard a few in my time)

 

[Alex C.]

Maybe you should put in your book, "Simple way to stop these letter is to pay your bills"

Anything but! Try nPower who passed me to a debt collector who sent me 13 letters demanding payment for a debt run up in the six years before I'd moved into the property. I did my best, I rang them, explained everything (multiple times) - eventually I rang up and asked them to take it to court (they did not like that), contacted consumer focus and never heard anything back.

(obvious exclusion of if the debt is yours then yes, paying your bills is the easiest way to resolve it )

 

[Alex C.]

If you don't owe the money don't even speak to the debt collectors write to them and keep a copy saying the debt has been disputed and should they contact you again you will take legal action against them.

The issue was that the debt the previous tenant had run up had been allocated to my nPower account (a new account!) so they were threatening to (and did at one point) put the debt on the meter as it was a prepayment meter. I would then have the hassle of contacting them or the company they were using to try and 'recover' the money even though it was an active account.

Admittedly, a confusing situation, but the hassles I had with them saying I owed it were ridiculous.

I've had a few letters before for ex tenants from debt recovery companies and rang them up - most of them wanted to see tenancy agreements etc, surprisingly when I offered to send them for an administrative fee of £10 (after all, the letter costs them £10 as a minimum to send), they weren't too happy. In the end I just stopped bothering - credit data isn't shared across credit files, so I've not really got much to worry about.

edit: My comments apply to business to consumer debt collection. I can't comment on B2B debt collection, I've not had need to use it before.

 

[Deleted member 59730]

Some of you will know that the harassment by large organisations of people who don't owe money or who genuinely have not got it is a pet subject of mine and have successfully sued a few banks recently. Anyway, I'm in the process of writing a book on this topic called "The Debt Collecting Merry-Go-Round. How to deal with harassment and unfair practice from debt collectors".

If anybody has any interesting stories, I would be pleased to receive them for possible use in the book. Also, if you need any assistance re this type of issue, please get in touch.

The book should be out next May.

Anthony Reeves

Dear Anthony

How do businesses know if their customer doesn't have the money? One business that went down on me appeared to be doing very well. Very flash cars outside their offices. They might have genuinely not got the money but they shouldn't have spent it on cars when they were heading down the pan.

I have noticed over many years that all the businesses owing me money who use the three classic excuses: 1/ Its the recession. 2/ My accountant's wife has cancer. and 3/ We had a flood, robbery, earthquake. Have turned out to be crooks.

Just what have these non-payers done to get your sympathy?

 

[Anthony Reeves]

First, let me say that people who have money and do not pay, do not have my sympathy.

I have been doing mainly claimant debt recovery litigation for many years with a high degree of success without resorting to harassment. What I want is the large organisations, such as banks and utility companies, to use the courts if there is a debt genuinely outstanding. I also want the courts to be more effective with more teeth to make those who have the money to be forced to pay up. Yes, court fees have risen in recent years and the standard of service is not always good, but these large organisations such as banks have the resources to use the courts and do not need to resort to harassment.

As to those individuals who hide behind limited liability (ie spend a lot of other people's money and then wind up the company etc) yes many of them are rogues. I have long argued for a reform to the law which would enable creditors (and not simply the Liquidator or Secretary of State as at present) to apply to the court for an order that the director contributes to the debts of the liquidated company where there has been wrongful and fraudulent trading. It's ironic when I make posts about this, there are replies about the damage it would do to the concept of limited liability. When a company is "going down the pan" but the directors do nothing and keep spending, then there needs to be an easier mechanism to hold these individuals to account. The present crop of insolvency laws are inadequate.

As to how you find out if people have the money or are taking you for a ride, well there are precautions that can be taken before contracting with customers. You would be surprised by the number of my clients who often do not even know the proper legal entity of the person they are supplying. Simple background checks and requiring guarantees from property owning individuals where the customer is a new company, can reduce the chances of being caught by a rogue company. I am happy to give some practical advice in this respect by private message.

Anyway, thanks for the interesting comments so far. Its good to get a range of views.

Anthony Reeves

 

[longleaf1]

I had a situation a few years back.

I had moved out of my flat back with my parents to buy the house I own now.

When I moved into my new house, within about 3 weeks I must have turned up on records again or something, I started to receive letters from a debt collection agency for about one hundred pounds I apparently owed to NPower for my electric from when I was in my flat.
I called them to explain that I didn't think I owed any money but if they could provide a bill, I would sure look into it. Advised by the Debt collection agency to call Npower. Lovely lady at Npower told me she didn't know what they were on about and that I was infact £45 in credit from the old property, had this in writing and duly forwarded a copy to the debt collectors. I was harrassed consistantly, phone calls daily, letters you name it, threatening the baliffs the lot, they just refused to acknowledge this letter.

In the end I was so worried some burly bloke was going to turn up, I called the consumer credit people, they told me exactly what to say in a letter, stating laws and what not, sent it recorded delivery and wa la within about a week I had a letter saying they had returned the debt to Npower and would no longer be pursuing me. No apology nothing!!

It took months to get to that stage and was very stressful, If I could ever get my hands on who trains the call centre staff at Westcot Credit, I would ring there necks!

Been over a year now and haven't heard anything since.

 

[Geoff T]

First, let me say that people who have money and do not pay, do not have my sympathy.

I have been doing mainly claimant debt recovery litigation for many years with a high degree of success without resorting to harassment. What I want is the large organisations, such as banks and utility companies, to use the courts if there is a debt genuinely outstanding. I also want the courts to be more effective with more teeth to make those who have the money to be forced to pay up. Yes, court fees have risen in recent years and the standard of service is not always good, but these large organisations such as banks have the resources to use the courts and do not need to resort to harassment.

As to those individuals who hide behind limited liability (ie spend a lot of other people's money and then wind up the company etc) yes many of them are rogues. I have long argued for a reform to the law which would enable creditors (and not simply the Liquidator or Secretary of State as at present) to apply to the court for an order that the director contributes to the debts of the liquidated company where there has been wrongful and fraudulent trading. It's ironic when I make posts about this, there are replies about the damage it would do to the concept of limited liability. When a company is "going down the pan" but the directors do nothing and keep spending, then there needs to be an easier mechanism to hold these individuals to account. The present crop of insolvency laws are inadequate.

As to how you find out if people have the money or are taking you for a ride, well there are precautions that can be taken before contracting with customers. You would be surprised by the number of my clients who often do not even know the proper legal entity of the person they are supplying. Simple background checks and requiring guarantees from property owning individuals where the customer is a new company, can reduce the chances of being caught by a rogue company. I am happy to give some practical advice in this respect by private message.

Anyway, thanks for the interesting comments so far. Its good to get a range of views.

Anthony Reeves

Totally agree

and I'm not surprised - in that order...

See it all the time, invoices with the name "Dave"... and IF you're lucky a mobile number!

 

[gibby]

I have come across a bit of a scam going on at the moment.
A certain firm of debt collectors seems to either buy very old debts, or create new ones.
They then really pester people until they pay up.
When I say pester we are talking about 60+ calls a month to any number they find associated with the debtor.
They even seem to be using facebook etc to track down people, where they work etc.

Ive recently had to help a friend who getting all this grief over a 9 year disputed debt of £90. The amount of calls to the home, parents, work etc was driving them mad but I don't see how they make money from it due to the amount of calls made.

G

 

[E Storey]

I particularly like the way they "sell" unlisted phone numbers of people living at the same address at the debtor, but don't bother to check that it's a block of flats!

Since they were chasing someone at my address, and they got my phone number and both the debtor and I are female.... clearly they had the right person!

Happened more than once!

 

[gibby]

Im not sure the forum owners would want me to put the name of the firm here. However I do think most debt collecting firms do break the law.

I have helped more than a few friends with debt collectors & in most cases, the debts that are sold on to collection firms that take actions that are illegal.

Its very normal for these firms to make false claims. As an example I was helping a friend who was being chased for a debt that had clearly been paid to a firm that had since gone bust. This Scottish firm of collectors told her that for the sake of £145 they would take her to the high court, kick her out of her home & ensure she never got credit again.
Luckily she recorded the call & they dropped calling her to then sell the debt onto yet another firm of rogues.

Another example is that they pester with alot of calls, saying its a very important financial matter, clogging up answering machines & calling work numbers. They then tell you its gone to the baliffs & if money by card hasn't been paid today the baliff will be there the next day with a warrant.

These firms often chase debts more than 6 years old, which they have no right to chase. They also bully people into paying & adding on extra illegal charges.

Usually once a firm sells the debt on to a collector it will not be taken to court as the original firm has given up on it.


G

 

[colin_mckellar]

I work part time as a debt collector and not one of the horror stories ring true with me and the company that I work for.

For a start we have to be vetted at our own cost and also credit checked.

A lot of calls are for rented flats where tenents have moved out with unpaid power bills. A copy of the lease or council tax paperwork and the debt goes away.

Where I tend to get a bit tougher is the companies that run up debts then dissolve the company only to reappear in the same place with the same staff but there has been a minor change in name and there has been a game of musical chairs with the directors. The companies will now not write off the debt if the directors are the same.

I will work with someone to get them the longest payback period I can if I think that they are in genuine hardship as well as the power companies allowing debt to be repaid at £3.30 a week for welfare claimants. Some of those people owe thousands so the companies are unlikely to ever see their money back.

What really annoys me is to go to a very posh area with new BMW cars in the driveway and find out that they haven't paid a bill in almost 2 years!! Then they get annoyed when a debt collector turns up!!

 

[Williams lester]

Where I tend to get a bit tougher is the companies that run up debts then dissolve the company only to reappear in the same place with the same staff but there has been a minor change in name and there has been a game of musical chairs with the directors. The companies will now not write off the debt if the directors are the same.

But what you and the 'companies' think in not relevant, if it is a new company and the old one has been dissolved or liquidated, then the debt is dead no matter how much you dislike it! There are legal options available to you such as asking Companies House to reinstate the company to the register, but you don't seem to appreciate that this is the correct way to move forward.

 

[Rhodes100]

If someone owes me money and refuses to pay then I obtain a CCJ against them, and then enforce the debt.

It seems that most of these larger debt collection agencies constantly threaten to take someone to court but never do so, you can imagine how much paperwork it would involve for all those thousands of debts they have bought?

What they do is to rely on scaring people into paying but apart from being a nuisance never actually do anything about it.

It can actually affect your life though, I know someone who moved house, some time afterwards someone had ordered goods using her name from a catalogue, and did not pay for them.

As a result a debt was placed on her credit file, which she only knew about when she appled for a new mortgage. There was a lot of paperwork proving that the debt did not belong to her before the company would remove the details from her file, so she could obtain the mortgage.

 

[gibby]

A few years back a debt collector knocked on my door for £11.50 from a telecoms firm who had gone bust but restarted, wiping out their debts.
I had paid the bill & proved this to the poor guy.

I did get chatting to him & felt very sorry for him as he was telling me all about the crap he goes through & how little money he makes.

They were getting 25% commission of anything they collected but his main job was chasing up former debt collectors for the company - who had quit without paying the money to the firm that they had collected.

I was quite shocked to hear you could pay money to the debt collector who then would not pay it to the company. You could be paying money out & its not being credited to your debt.

The advice I give people is never to deal with debt collectors.
You have the legal right not to deal with them & you should never speak to them on the phone.

Keep everything in writing for legal reasons but remember most firms ar5e just there to scare you into paying up.
Only the original firm can take you to court - or solicitors on their behalf.
Many debt collection firms do have a 2nd firm or trading name with the word solicitor in it.

You also need to remember that debts are usually sold on as the firm has an insurance policy on people not paying. Once a debt is sold on they won't take legal action & if you havn't made a payment in 6 years they can not collect it.

I do agree people should be paying their bills but from what I have seen debt collections firms use very underhand tactics & some even chase made up debts.
Its big money for them & people are daft enough to pay them.

G

 

[colin_mckellar]

I cannot speak for the entire debt collecting industry but most of what I have read is complete nonsense.

The debt collection company does go to court to obtain a warrant to allow me to forceably enter premises to removed the meter for non payment of bills.

There is a set procedure in place where I will attempt to resolve the problem before the warrant is applied for. I do not go in with all guns blazing as I believe that a person is innocent until proven "giulty".

I will ensure that I am talking to the correct person, I will ensure that the meter serial numbers match what the power companies expect to be there. I will work with the person to get them the best deal possible.

some people are actually quite pleased to see me as I will resolve the problem for them. I have been handed boxfulls of unopened mail as the person has been unable to cope for various reasons, I can report back on venerable people and try and get government agencies involved in their wellbeing.

I could go on but it is not as black as some people are trying to paint although, like any industry, there will be cowboys out there.

Power companies do use Companies House when there is a convenient liquidation of a company. I was out on an isolation (disconnection) recently where the kebab shop has run up £6,000 of a gas bill and dissolved the company when the warrant was granted. The power company checked the records and found that the new company was essentially the old company so authorised the meter to be removed.

Only when I sent in the gas engineer to remove the meter did the smirk from the owner leave his face and he paid £3,000 cash on the spot.

 

[Charlie B ACS]

The point that was trying to be raised Colin is that you cannot pursue the New Company (NewCo) for the old company's (OldCo) debts.

On the energy provider field you may cut off the NewCo, but they are not legally liable for the OldCo's debts, so any CCJ warrants will be ineffective.

This is of course providing that they have used an insolvency practitioner, and the Newco has bought the assets of the Oldco.

If they haven't done it properly & are seeking to just have the OldCo struck off, then I would presume them fair game.

As it is, whilst morally, threatening to cut them off is getting money from the right people, legally, you are threatening an entity that doesn't owe you anything, and could be open to claims of harassment.

 

[colin_mckellar]

When I am on a job i am constantly in touch with the energy provider's legal team. They tell me what I can and cannot do.

With this particular kebab house then the owner was well known for running up debts then liquidating the company.

Companies House was checked and all the directors were the same as the old company and that is when it was decided to remove the meter.

Only then was the money forthcoming.

It was legalised fraud what the kebab shop was doing. I wonder how many of his customers he would allow the eat for a year without paying an then say that he is not going to pay.

 

[Charlie B ACS]

I agree, it is fraudulent, but if done through an IP, it's legal, though if they do it too often complain to Companies Investigations dept.

 

[Rhodes100]

It may be of interest that Lowell Finance one of the worst culprits are up for sale. Interesting that even though they say that business was booming during the recession, the company still made a loss in 2009.

This would indicate that they were not being successful in collecting enough debts.

http://www.business-sale.com/news/a...collector-put-up-for-sale-by-owner-33640.html

 

[blobbywall]

Have just yesterday successfully sued Npower in Small Claims Court for loss of income after they ignored all complaints (including the Ombudsnman), lost me a tenant and took me to court for disconnection (unsuccessfully).
Long -running saga over nearly 5 years finally over
Would look at participation in the book.

 

[Alan R Price]

Have just yesterday successfully sued Npower in Small Claims Court for loss of income after they ignored all complaints (including the Ombudsnman), lost me a tenant and took me to court for disconnection (unsuccessfully).
Long -running saga over nearly 5 years finally over
Would look at participation in the book.

Good for you! Well done|