The Administration of Justice Act of 1970 states that creditors who harass their debtors are liable to be charged for their acts as a criminal offence. This report will tell you all you need to know about how to handle creditors whom you feel are giving you a difficult time. Here you will find out how to identify whether a creditor’s conduct towards you can be considered harassment, and how to deal with harassment when it happens. In addition, this report will tell you about:

1.) The Administration of Justice Act, and the related section that applies to situations of harassment
2.) A primer on harassment from The Office of Fair Trading (OFT) Debt Collection Guidelines
3.) Ways to deal with creditors who harass you.

THE ADMINISTRATION OF JUSTICE ACT, SECTION 40

“S40 Punishment for unlawful harassment of debtors.

1.) A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract he:

1. harasses the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;

2. falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;

3. falsely represents himself to be authorized in some official capacity to claim or enforce payment;

4. utters a documents falsely represented by him to have some official character, or purporting to have some official character which he know it has not.

2.) A person may be guilty of an offence by virtue of sub-section (1) (a) above if he concerts with others in taking of such actions as is described in that paragraph,

Not with standing that his own course of conduct does not by itself amount to harassment.”

CODE OF GUIDANCE FROM THE OFFICE OF FAIR TRADING

“Anything done by a person which is reasonable” to get a debtor to pay his debt is not regarded as harassment. But there are a lot of other types of activities which a creditor may use to harass a debtor. To be able to identify what makes up harassment, the Office of Fair Trading and the Trade Associations run by the credit industry put their heads together and came up with a set of guidelines which point out specific actions from creditors that can be considered as harassment. The new Debt Collection Guidance has a list for creditors who have consumer credit licenses.

The Office of Fair Trading and the Debt Collection Guidance has compiled a checklist of activities which are “considered unfair”:

“IT IS UNFAIR TO COMMJNICATE, IN WHATEVER FORM, WITH CONSUMERS IN AN UNCLEAR, INACCURATE OR MISLEADING MANNER.”

This includes:

Letters that look like court claims

Not making it clear who the company is or what their role is

Unhelpful legal language

Not giving balance statements about the debt when asked

Contacting you at unreasonable times even when asked not to

Asking you to contact them on premium rate phone numbers.

“THOSE CONTACTING DEBTORS MUST NOT BE DECEITFUL BY MISREPRESENTING THEIR AUTHORITY AND/OR THE CORRECT LEGAL POSITION.”

This includes:

Claiming to work for the court or be a bailiff

Implying action can be taken that is not legally possible such as implying they could take your property

Using a business name or logo that implies they are a government body

Implying that court action has been taken against you when it hasn’t

Implying not paying your debt is a criminal offence

Threatening to take court action in England if you live in Scotland or the other way around.

“PUTTING PRESSURE ON DEBTORS OR THIRD PARTIES IS CONSIDERED TO BE OPPRESSIVE.”

This includes:

Contacting you too frequently

Pressuring you to sell property or take out more debt

Using more than one collection company at the same time or not telling you when your debt has been passed to another company

Pressurising you to pay in full or in large instalments you cannot afford

Making threatening gestures or statements

Ignoring disputes about whether you owe the money

Trying to embarrass you in public or threatening to tell a third party about your debts such as a neighbour or your family.

“DEALINGS WITH DEBTORS ARE NOT TO BE DECEITFUL AND/OR UNFAIR.”

Examples include:

Sending letters addressed to “the occupier” or discussing the debt with someone without knowing if they are you

Refusing to deal with an advise acting on your behalf

Not accepting reasonable offers or passing on payments you make

Refusing to freeze action of you dispute the debt.

“CHARGES HOULD NOT BE LEVIED UNFAIRLY”.

Examples include:

Claiming collection costs when the original credit agreement didn’t allow this to happen and making you think you are legally liable for the costs

Not putting the specific amounts that can be added for collection costs in the original credit agreement

Adding unreasonable charges.

“THOSE VISITING DEBTORS MUST NOT ACT IN AN UNCLEAR OR THREATENING MANNER.”

Collectors should explain the reason for any visit and give you notice of the time and date they will call

They shouldn’t visit if they know you are ill or vulnerable and if they find you are unwell or distressed they should leave

They should not come in if you do not want them to and should leave when you ask them to

They shouldn’t visit you at work or somewhere like a hospital.

HOW TO HANDLE THE SITUATION WHEN YOUR CREDITORS HARASS YOU

When you feel you are being harassed by your creditor, the very first thing you should do is write a letter to your creditor’s company telling them that you are worried about the kind of actions they are taking to collect your debt. In the letter, let them know that you are aware of your rights under Section 40 of the Administration of Justice Act, and that the creditor should refrain from violating the Act whenever they deal with you. Put in writing the manner that you prefer to be contacted and try to get their agreement in to do the same. Writing them a letter may be all it takes to get them to stop any unlawful collection techniques.

To give your letter some teeth, inform them that you know the OFT Debt Collection Guidance, and all it takes is for you to file a complaint about how they are treating you.

The best way to make sure that your situation is given proper attention would be to bring your concerns to the trading standards and consumer protection department of your local council. It will be their job to look into any unlawful practices and activities, and determine whether the matter needs to be brought up to the courts. This is a better option for you to take because if you decide take your case to the local law enforcement, you may find it difficult to get them to take action because the police usually deal with more serious situations where violence, fraud or blackmail is used.

If the case is brought to the Magistrates Court, your creditor is likely to be fined an amount which may reach a maximum of £5,000, and if he is convicted, he is likely to lose his consumer credit license, as well.

If your local Trading Standards is not able to take any action, you may want to go straight to the Office of Fair Trading. At the bottom of this report, there is a list of contact information where you can get in touch with them. Normally the OFT does not investigate complaints from individual persons, but they have a Debt Collection Enforcement Team who will assist you by getting as much information as they can to be able to use against creditors who are practicing illegal means of debt collection. This action is one step that you can take to have your creditor’s consumer credit license taken away from them

SOME OTHER THINGS YOU CAN DO

To make sure all areas are covered, you may want to bring your case directly to the Magistrates Court. Be prepared to pay the costs that come with filing your complaint, and it would be a good idea to have the advice of your solicitor.

If you are in the situation where you are receiving a lot of unwarranted phone calls from an unfriendly creditor, you may want to decide to avail of your BT’s new service, “Choose to Refuse”. This option allows you to enter a certain pin number right after you get a call from your creditor.

If the creditor calls again, they will be greeted by a recorded message telling them that you do not wish to speak to them. This service will normally cost you around £8.00 every quarter.

If you are getting a new subscription with another telephone service provider, make sure to ask them if they have something similar to “Choose to Refuse”.

Another useful tool you can use is the Malicious Communications Act of 1988. This Act states that it is illegal and punishable under the law to send letters and other forms of communication to the debtor that may cause “distress or anxiety”. To qualify under this act, the letter or article will need to contain the following:

1.) A highly improper and extremely unpleasant message
2.) Threats
3.) Untrue information or facts which the sender knows are false

If this is proven in the Magistrates Court, the guilty person will be penalized with a fine.

You can also refer to the Criminal Justice Act & Public Order Act of 1994. Section 4A of this law states that it is criminal and unlawful for a person to use “threatening, abusive or insulting words or behaviour” to cause you “Harassment, alarm or distress” in a public area outside of your home. If this happens to you, inform the police immediately as this offence is punishable under the law.

CONTACT DETAILS OF CONCERNED AGENCIES

The Finance & Leasing Association (FLA)
2nd Floor, Imperial House
15-19 Kingsway
London WC2B 6UN
Tel. No. 020 7836 6511
www.fla.org.uk