Unfortunately, the debt collection agency industry still has it’s fair share of rogue operators. Fortunately for all of us, this will shortly be coming to an end due to much more stringent rules and regulations that will be applied by the Financial Conduct Authority (FCA).
As from April 2014, all debt collection agencies who hold consumer credit licenses will have to apply to the FCA for authorisation and will have to demonstrate that they are fit to hold a license for their activities and they will have to report any complaints that they receive to the FCA. As a consequence, a lot of these rogue companies will be put out of business and that is something that we endorse entirely.
There are many debt collection agencies who exist merely to take money from businesses and who charge large signing on fees or ‘lifetime membership’ fees and subsequently do nothing for the money paid to them. We very often hear stories that once the money is paid, the customer can’t even get hold of anyone at the company and sometimes these fees are hundreds and sometimes thousands of pounds.
The typical approach from these companies is to use telesales operatives to call to see if you have problems with debt. They will often tell you that there is ‘new legislation’ that will enable you to retrieve monies from the directors of liquidated companies and that they have a ‘legal representative’ in your area this week. This ‘legal representative’ is merely a salesman with no legal qualification whatsoever, with a mandate to tell you whatever you want to hear and they will convince you that if you just pay your lifetime membership of £xxxx then they will have your money back in no time. In some cases the front page of the contract will offer a money back guarantee – but check the terms and conditions on the back and they will always negate everything stated on the front of the contract.
Thankfully, not all debt collection agencies operate like this but what do you do if you have been caught out? Following is a link to the FCA guidance on how to make a complaint. Note that the complaint should not be made to the FCA but the Financial Ombudsman in the first place, but if the company has misrepresented it’s services to you, you can sue them for the return of your money. If you are in this position, then we would be delighted to assist you, just give us a call.