Consumer Minister Gareth Thomas is to meet debt collection industry representatives, amid concerns of practices employed by collection agencies and that a growing number of people are being wrongly pursued.
Minister Mr Thomas said:”"I am increasingly concerned about some of the practices that we are hearing about used by debt collection agencies. There is often psychological harassment effectively; constant phone calls, in some of the worst cases we’ve seen neighbours contacted, people’s work phoned.”
Collectors left one woman, who was wrongly pursued in 2007, so frightened she committed suicide.
The Credit Services Association, cites the limited access to the electoral register as partly to blame, saying cases of mistaken identity will continue to rise while it does not have access to the full version.
The number is already at alarming levels and is set to rise as the recession deepens. In 2007 the national association for debt recovery, the Credit Services Association, tried to locate one million people. In 2008 that rose to eight million, and predictions are that it could rise to 15 million this year.
To avoid the harassment and embarrassment of collection agencies contacting employers and knocking on your door, debt advice organisations recommend seeking impartial debt help if you are struggling with your debts.
Professional debt advice companies can recommend a suitable debt help solution, which will often entail dealing with creditors and collection agencies on a client’s behalf.
Their debt advice could see debts gathered into a single affordable payment, by means of a debt help solution – such as an IVA (individual Voluntary Arrangement) or a debt management plan.
An IVA is a formal debt help solution which involves a qualified Insolvency Practitioner to draft a legally binding contract with creditors, preventing them from changing their payment demands. Once the IVA has been agreed clients make payments over a set period – usually five years – after which time all of their unsecured balances are written-off.
A debt management plan is an informal debt help solution, and is flexible in that payments can be changed to suit the individual’s financial situation. Debt management is a good way of gathering credit cards, overdrafts, store cards and other unsecured balances together into one payment – thus making them more manageable.
When looking for debt help, it’s worth contacting a reputable debt advice company – as often their debt advice is free.
Reputable debt advice companies include Chiltern Debt Management, The Debt People and Hamilton Locke. Their debt advice is free and their debt help solutions are tailored to the individual.
Inevitably mistakes will be made by collectors under the current system. Industry experts call for a national address register, which would make it a criminal offence if creditors weren’t informed that a debtor had moved address – so would reduce the level of inaccuracies.