How to Dispute a Bogus Debt Collected by a Collection Agency in England and Wales

Have a collection agency bugging you for a debt you believe might be fake or invalid? Follow these steps to handle the situation effectively.

Understanding Your Rights and the Legal Framework

If you live in England or Wales, you have several options to dispute a bogus debt. The first step is to raise a formal complaint. This approach leverages your rights under the Consumer Credit Act 1974.

Raising a Complaint with the Debt Collector

When dealing with a malicious or questionable debt, start by challenging the legitimacy of the debt itself. You can request a copy of the credit agreement under section 77 of the Consumer Credit Act. Importantly, you want a copy of the contract that includes your signature. The debt collection agency must provide this despite the letter seeming redundant.

Requesting Documentation

Additionally, ask for a copy of the Section 87 default notice. This notice is essential as it confirms that the debt collection agency had valid grounds and notified you before proceeding with any enforcement actions, including assigning the debt to a collection agency. If the agency fails to provide this documentation, they must drop the matter.

Compliance and Enforcement Actions

Upon receiving the required documents, you should check them against the original agreement. The collection agency is required to hold the recovery action on hold for up to eight weeks while they investigate your complaint. This period is critical as it provides an opportunity to challenge the collection process legally.

Deadlock and Referral to the Financial Ombudsman Service (FOS)

If the debt collection agency fails to resolve the issue to your satisfaction, you can issue a letter stating that the dispute is deadlocked. This signifies a failure to reach an agreement internally. With this in hand, you can then refer the case to the Financial Ombudsman Service (FOS).

The FOS is an independent, non-profit body that resolves disputes between consumers and financial services providers. They will independently review the case, check for compliance with financial regulations, and determine whether you are liable for the debt. Their decision is binding, ensuring a standardized and fair approach to resolving the dispute.

Conclusion

Dealing with a collection agency for a bogus debt can be a complex process, but by understanding your rights and the legal framework, you can effectively negotiate and resolve the issue. If you're unsure about the specifics or need further assistance, legal advice or the support of a financial advisor may be necessary.

Good luck in your dispute and remember: raising a formal complaint and requesting valid documentation are your first critical steps.

Craig