FCA and PRA licenses (authorisations) and ongoing compliance support, training, recruitment. Contact us 7 days a week, 8am-11pm. Free consultations. Phone / Whatsapp: +4478 3368 4449  Email: hirett.co.uk@gmail.com

← Return to the Table of Content for all MCOB pages

Debt Recovery Policy & Procedures

1) Policy Statement

The company considers the interests of its customers in all instances and aims to provide a fair, clear and appropriate service at all times. In situations where an account is in arrears or default, we always refer to our strict and compliant arrears procedures and controls to bring an account back up to date.

However, on the rare occasions that the resolution of an account has not been possible, the company will proceed with collection measures to recover the monies owed. We define debt on an account as the inability to resolve accounts in arrears and/or the breakdown of amicable communications with the customer to bring missed payments up to date.

The company only activates our debt recovery processes as a last resort, where all other means of arrears resolution have been explored. We ensure continued and clear communication with the customer and present recovery consequences in an easy to understand, durable medium.

2) Purpose

This policy follows on from our Arrears and Defaults policy and procedures and is used in conjunction with the controls and measures set out in that document. The purpose of this policy is to provide our objectives and a framework for in-house debt recovery and the use of external debt collection agents where applicable.

The company resort to the formal collection of a debt only after our arrears and default processes have been exhausted and we see no path to an amicable resolution with the customer. All attempts to recover monies owed, whether internal or external, comply with the CONC 7 regulations as set out in the FCA Handbook. The company complies with its obligations under the FCA and acts in a fair, transparent and consistent way with regards to accounts and customers that are at risk from, or who have already accumulated arrears in their payments.

This policy details our objectives and processes for recovering a debt and provides our staff and third parties with clear guidance on our policies and protocols.

3) Scope

The policy relates to all staff (meaning permanent, fixed term, and temporary staff, any third-party representatives or sub-contractors, agency workers, volunteers, interns and agents engaged with the company in the UK or overseas) within the organisation and has been created to ensure that staff deal with the area that this policy relates to in accordance with legal, regulatory, contractual and business expectations and requirements.

4) Regulated Debt Collection

The FCA defines debt collecting as taking steps to procure payment of a debt under a credit agreement, irrespective of whether that agreement is regulated or exempt. The regulations do not apply to the collection of debts under agreements which are not credit agreements (or consumer hire agreements or regulated peer-to-peer loans), such as utility bill debts, or debts owed by companies, as these are not defined as credit agreements.

However, as a regulated firm, the company ensures that all debt recovery actions are compliant and are carried out in the best interests of the customer. We therefore follow the objectives and procedures set out in this document for all debt recovery actions. It is our aim to ensure the fair treatment of customers at all times, but especially during efforts that may cause increased stress or added financial difficulties, such as the collection of arrears or the referral of the full outstanding amount on an account being passed to a collection agency.

In relation to debt collecting and debt administration, we define the customer as the individual from whom the payment of a debt is sought. There are cases where the customer and the borrowers are separate individuals, such as a person providing a guarantee or indemnity under a credit agreement.

5) Objectives

Where an account has entered into arrears for whatever reason and the company has been unsuccessful with attempts to bring the account back up to date, we aim is to meet the below policy objectives in the recovery of the any debt: –

  • Ensure that reasonable time and opportunity to repay the debt has been given and that the customer has been informed that free and impartial debt advice is available from not-for-profit debt advice bodies, prior to starting the debt recovery process
  • Communicate with the customer in an easy to understand and durable medium, the process, consequences and reasons for debt recovery actions
  • Where a third-party recovery agent is used, advise the customer of the intent to pass the account to that agent and a timeframe for doing so
  • Monitor and audit any third-party debt recovery agent to ensure compliance with the regulations and our objectives
  • For in-house debt recovery, we will follow our recovery procedures and use only those letters/materials that have been authorised by the Compliance Officer
  • For in-house debt recovery, we will refer to the Common Financial Statement or equivalent guidance when assessing a disposable income
  • We will suspend the active pursuit of recovery of a debt from a customer for a reasonable period where the customer informs us that a debt counsellor or other person acting on their behalf, is developing a repayment plan
  • We will treat all customers in with forbearance and due consideration
  • Complete the full recovery procedures within the regulated timeframes and ensure that all proportionate actions have been taken/considered, prior to taking any court and/or enforcement actions
  • Ensure that we have clear, robust and adequate debt recovery policies and procedures in place and that all staff have been trained and are knowledgeable about these processes
  • Treat any customer with a mental health issue as a vulnerable customer and follow the appropriate procedures and regulations
  • Make provisions for other customer vulnerabilities and ensure that where debt recovery is the only option, vulnerabilities are still considered
  • Comply with Principle 6 of the FCA regulations and adhere to the TCF principles and our own policy and procedures in this area
  • Handle each customer based on their own merits and ensure that no further undue stress or financial burden is placed on the customer
  • Prior to and throughout the duration of debt recovery, we will always provide the customer or person/company acting on their behalf, with information on the amount of any arrears and the full balance owing
  • When contacting customers, we will never misrepresent our authority or legal position with regards to the debt or debt recovery process

6) Debt Recovery Procedures & Guidelines

[If you already have existing arrears procedures, insert them here]

6.1 Prevention

Where possible, it is the company’s aim to prevent an account from entering into a debt recovery status in the first instance. We have dedicated arrears, default and financial difficulty policies and procedures in place, with the aim of resolving arrears and working with the customer wherever possible.

Accounts in arrears have every reasonable and proportionate action taken prior to considering debt recovery. Details of the controls, measures and options used can be found in our Arrears and Default Policy & Procedure document.

6.2 Customer and Third-Party Communication

All customer and third-party communications in relation to debt recovery are conducted in writing on a durable medium. Where a customer specifically requests to communicate via an alternate format (e.g. email telephone, online etc), we will always follow up the communication in writing, covering the discussed points and providing a written summary.

Where debt recovery telephone calls are made, all staff conducting the calls are trained in our debt recovery process, the FCA regulations and any legal recovery requirements. Such staff will always ensure that when contacting a customer, the explain the following information: –

  • Who the person contacting the customer works for?
  • The person’s role in or relationship with the firm
  • The purpose of the contact (being that of debt recovery and/or discussing the customers defaulted account)

All written materials, scripts and content relating to our recovery processes are assessed and authorised by the Compliance Officer prior to being used and comply with any legal, contractual and regulatory requirements and expectations. All communications with the customer are clear, jargon-free and legible, ensuring that there are no misleading statements or misunderstandings regarding our reason for contacting the customer. We abide by the clear fair and not misleading rule in CONC 3.3.1 and understand that this also applies to us in relation to any communication with a customer in relation to a credit agreement or a consumer hire agreement.

Where contact is made by phone, we ensure that this is done at a reasonable time of the day and we pay due regard to customers who have advised of unsuitable times and/or made requests in respect of when, where and how they may be contacted.

When contacting a customer directly or via a third-party with regards to debt recovery, the company ensures that we: –

  • Do not unfairly disclose or threaten to disclose information relating to the customer’s debt to any third party
  • Never act in a way likely to be publicly embarrassing to the customer
  • Take reasonable steps to ensure that third parties do not become aware that the customer is being pursued in respect of a debt
  • Properly address all communications to the customer and mark the envelope as ‘Private and Confidential’
  • Where the name of our firm or any third-party firm used for debt recovery purposes has a name that may indicate the recovery of a debt or debt collection activities, we ensure that the name is not shown or made visible on any communication
  • Never disclose details of a debt to any individual without first establishing, by suitably appropriate means, that the individual is (or acts on behalf of) the customer
  • Do not misrepresent our authority or legal position with regards to the debt or debt recovery process
  • Never claim to work on instructions from the courts as bailiffs or, in Scotland, sheriff officers or messengers-at-arms, or in Northern Ireland, to work on instructions from the Enforcement of Judgements Office when this is untrue
  • Do not use official looking documents which are designed to, or are likely to, mislead a customer as to our status or the true nature of our firms and/or its services

In the interest of compliance, ethical practice and operating in a fair, clear and honest manner, the company will never: –

  • Falsely suggest or state that we are a member of a trade body or is accredited by a trade body
  • Never imply that we or a person working on our behalf, is entitled to carry on a reserved legal activity (i.e. to conduct litigation, appear before and address a court etc)
  • Suggest or state that action can or will be taken when legally it cannot
  • Suggest or state that we will commence proceedings for a warrant of execution or an attachment of earnings order when a court judgment has not been obtained
  • Suggest or state that we will take any other enforcement action before it is possible to know whether such action will be permissible
  • Suggest or state that an action has been taken when no such action has been taken

6.2.1 Call Charges

The company never ask customers to make contact on a premium rate or other special rate telephone number where the charge for which is higher than to a standard geographic telephone number. We utilise and adhere to the FCA guidance regarding call charges under GEN 7.2 when asking a customer to contact us regarding their debt.

For the purposes of this policy, we define the basic rate as the simple cost of connection, with no form of contribution towards our costs or revenues.

The following numbers are used by the company for customers to make contact on: –

  • Geographic numbers or numbers which are always set at the same rate, which usually begin with the prefix 01, 02 or 03
  • Calls which can be free of charge to call, for example 0800 and 0808 numbers
  • Standard mobile numbers, which usually begin with the prefix 07, but only where we ordinarily use a mobile number to receive telephone calls

The following numbers are not used by the company: –

  • Premium rate numbers that begin with the prefix 09
  • Other revenue sharing numbers in which a portion of the call charge is used to provide a service or make a small payment to us. Such numbers include those that begin with the prefix 084 or 0871, 0872 or 0873
  • Telephone numbers that begin with the prefix 0870 as the cost of making a telephone call on such numbers can be higher than a geographic cost and will vary depending on the consumer’s telephone tariff

6.3 In-House Debt Recovery

Where an account remains in arrears and no action has been taken by the customer to bring the account back up-to-date and no adequate explanation exists for continued defaults, we will enter the customer into our debt recovery process, ensuring that they have been clearly and adequately advised of the possible legal and contractual consequences of defaulting on the account and the potential negative effect on their credit score.

Overdue and arrears reminders letters are sent to the customer as part of our Arrears and Default procedures and therefore do not constitute part of our debt recovery cycle. The last letter to be sent as part of the arrears process is our Final General Reminder Letter, at which point the account is referred to our debt recovery cycle after 7 days of no contact/successful resolution.

[Ensure that where your internal debt recovery process differs from the below, you insert the actual steps taken and refer to exact letter/message templates and content used.]

The steps we take once an account enters our debt recovery cycle are as follows: –

Day 1 – Send Default Notice* to the customer advising that their account has been in arrears for x months and that having missed x payments [term to be dictated by contractual agreement], their account is now in default. A copy of the original signed contract/agreement is also sent to the customer with the default notice where applicable.

Day 7 – Send Formal Debt Recovery Letter to the customer advising of our failed attempts to contact them/resolve the arrears on the account and advising that the (where applicable) full balance of the account is now due and that any statutory/legal/contractual/debt recovery fees/interest will now be charges and may accrue from this date until the debt is paid. It also details any consequences of the account having defaulted and entering a debt recovery cycle.

Day 10 – Phone call to customer to follow up with the receipt of the Formal Debt Recovery Letter, with a view towards setting up a debt collection repayment plan with an affordability assessment and to reiterate the contents of the letter and the possibility of further actions and consequences as the account is now in default.

Day 17 – Send Final Reminder Debt Recovery Letter to the customer advising of intent to [Delete as applicable *Outsource the account to an external debt collection agency/*Instruct a solicitor to begin legal proceedings]. Advising their final notice to make contact and pay the account balance or set up an affordable repayment plan.

Day 20 – Phone call to customer to follow up with the receipt of the Final Reminder Debt Recovery Letter, with a view towards setting up a debt collection repayment plan with an affordability assessment and to reiterate the contents of the letter and the referral of the account to a third-party for collection.

Day 25 – Action where no contact has been made or customer refusal to settle the account: –

a. ) Account Closed – customer advised in a clear written format of the continued existence of the debt and the possibility of them being pursued by us or another firm (where debt purchase takes place) in the future

b.) Write Off – Account closed as not applicable, cost effective or viable to pursue further. Customer is advised in writing of any write off action.

c.) Outsource to External Debt Collection Agency – Terms of recovery as per separate SLA and agreement with agency. Customer is informed in writing that the account has now been passed to a third-party collection agency for recovery and/or further actions.

d.) Instruct Solicitor to Begin Legal Proceedings – Terms of instruction as per separate SLA and agreement with Solicitor firm. Customer is informed in writing that the account has now been passed to a Solicitor for legal action to be taken and are made aware of the potential court and/or enforcement actions that could result.

*Where the account relates to a P2P agreement, we ensure that we give notice to the borrower within 35 days of a default sum becoming payable by them. The Default Notice complies with CONC 7.19.4 R and contains: –

  • A form of wording to the effect that it relates to default sums and is given in compliance with FCA rules
  • The date of the notice
  • A description of the agreement sufficient to identify it
  • Details of the company’s: –
    • Full business name
    • Telephone number
    • Postal address
    • Registered address (if different)
    • Contact email address
    • FCA Authorisation Number
  • The amount and nature of each default sum payable under the agreement which has not been the subject of a previous notice of default sums
  • The date upon which each default sum referred to in the notice became payable under the agreement
  • The total amount of all the default sums included in the notice
  • A statement advising “This notice does not take account of default sums which we have already told you about in another default sum notice, whether or not those sums remain unpaid.”

All debt recovery letters sent directly by the company contain advice and directions for free debt help. More information on this content is provided under the Signpost heading in this document.

6.4 Data Accuracy

The company has strict Data Protection policies and procedures in place and abide by the 8 Data Protection Principles at all times. Whilst we are confident about the accuracy and validity of the data that we hold, as a quality assurance measure when considering debts for our debt collection cycle, we carry out additional verifications on the data that we obtain, record, hold and/or pass on.

Prior to carrying our debt recovery (internal or outsourced), each account is reviewed by a trained staff member, with emphasis on verifying: –

  • That the customer being contacted is the true borrower and should be pursued for the repayment of the debt
  • The correct amount of arrears/balance is noted on the account
  • Arrears protocol provisions were adhered to (e.g. interest/charges frozen, adequate and proportionate actions taken to resolve the account, flexible repayment solutions offered)
  • The customers address and contact details are valid, current and have been verified within the past 3 months
  • All contractual, legal and/or regulatory compliant letters were sent during the arrears period
  • Any key circumstances and/or vulnerabilities are clearly noted on the account
  • Specific customer requests are noted and have been adhered to

The company endeavours to ensure that data held on file regarding a customer, has been reviewed and verified as being accurate and adequate where that information is being passed to: –

  • An external debt collection agency
  • A tracing agent
  • A solicitor
  • Third-party agent
  • Credit reference agency
  • Another firm/individual recovering the debt

Where an account is being passed to any of the above third parties for collection/tracing, we provide detailed account notes and a full history, ensuring the provision of information pertinent to the account, including (but not limited to): –

  • Being in financial difficulties
  • Being particularly vulnerable
  • Disputing the debt
  • A repayment plan or forbearance being in place
  • Having a representative acting on the customer’s behalf
  • Previous payment made on account
  • Any noted reasons for non-payment (even where considered invalid)

6.5 Outsourcing Debt Recovery

Where any account is referred to a 3rd party for pursuing and recovery of repayments, the company request frequent updates on the account and carry out monitoring of the third-party’s recovery actions. We have robust service level agreements with any third-party debt collection agency to ensure that when an account is passed to them: –

  • They provide the customer with written notice that the account has been assigned to them for recovery
  • They do not pursue an individual who they know or believe might not be the borrower or hirer under a credit agreement or a consumer hire agreement
  • They do not ignore or disregard a customer’s claim that a debt has been settled or is disputed and do not continue to make demands for payment without providing clear justification and/or evidence as to why the customer’s claim is not valid
  • They always refer any reasonable offer made by the customer to pay by instalments, to us for consideration
  • They always pass on payments received from a customer and/or details of a customer’s outstanding balance to us in a timely manner or, provided the effect of the agreement does not impact adversely on the customer, in accordance with an agreement between us and the recovery firm
  • We stop any contact/recovery actions of our own so that the customer is not subject to multiple collection methods
  • We require any external agency associated with debt recovery and/or tracing on our behalf, to ensure its employees and agents comply with CONC and take reasonable steps to ensure other persons who act on their behalf do so as well
  • We ensure that a third party engaged by us, where required, has the appropriate Part 4A permission to engage in the regulated activities undertaken in the course of the third party’s business.
  • Where we receive any complaints or concerns regarding a third-party appointed on our behalf to recover debts or to trace customers, we will always investigate such complaints thoroughly and follow our internal Complaint Handling Procedures where applicable

Customers are advised via a written letter that whilst their contractual agreement remains with the company, their failure to reach a successful resolution to the arrears on their account has resulted in the debt being passed to and handled by an external debt collection agency.

6.5.1 Agency Selection & Monitoring

Where an external debt collection agency is used, we carry out strict due diligence checks to ensure that they are authorised and competent to carry out the recovery of debts and that they comply with the legal, regulatory and contractual requirements and laws as applicable to the collection of debts and arrears. We use our internal Outsourcing and Due Diligence policy and procedures when selecting, reviewing and monitoring any supplier or third-party, including those associated with debt recovery.

We utilise audit checklists, due diligence questionnaires, training records, onsite audits and call monitoring to review any external agency and have robust agreements and service level agreements in place prior to commencing placement.

6.6 Continuous Payment Authority

Where an account has been in arrears and has now passed into our debt recovery process, we will not exercise our rights under a continuous payment authority or make suggestion to the customer that we intend to do so, unless it has been clearly explained to the customer that the continuous payment authority would be used in the way in question.

The company never unfairly inhibit or discourage a customer from cancelling a continuous payment authority or make any attempt to misleading the customer regarding their right to cancel. We always ensure that we cease to exercise our rights under the continuous payment authority once we have been notified that the continuous payment authority has been cancelled.

6.7 Debt Collection Visits

Where the company carries out doorstep collection visits to a customer’s home or utilises a third-party collection agency to do so, we will always ensure (where practicable to do so), that prior to the visit, the customer: –

  • Has clearly been explained to about the purpose and intended outcome of the visit
  • Is advised who will be visiting and what they relationship to the company is
  • Is given adequate notice of the date and likely time (at a reasonable time of day) of the visit
  • Is given reasonable time to prepare for the visit and is never coerced or pressurised into immediate discussions or decisions

The company ensures, by use of training, monitoring and audits, that all persons visiting a customer’s property on its behalf, act at all times in accordance with the requirements of CONC 7 and never: –

  • Act in a threatening manner towards a customer
  • Visit a customer at a time when they know or suspect that the customer is, or may be, particularly vulnerable
  • Visit at an inappropriate location unless the customer has expressly consented to the visit
  • Enter a customer’s property without the customer’s consent or an appropriate court order
  • Refuse to leave a customer’s property when it becomes apparent that the customer is unduly distressed or might not have the mental capacity to make an informed repayment decision or to engage in the debt recovery process
  • Refuse to leave a customer’s property when reasonably asked to do so
  • Visit or threaten to visit a customer without the customer’s prior agreement when a debt is deadlocked or reasonably queried or disputed

In the interests of best practice and customer fairness, we will never authorise a customer to receive a debt collection visit at their place of work or whilst they are in hospital, even if previously consented to by the customer.

6.8 Enforcement of Debts

Under the CONC 7 regulations, the company ensures that all actions comply with the regulatory requirements and are in the customers’ best interests. the company consider every possible and proportionate action where debt recovery is concerned, with a view to resolving the matter within the best interests of the customer. However, on occasions when all reasonable attempts to recover the debt have failed, we ensure that we never: –

  • Take steps to enforce a debt where we are aware that the customer is subject to: –
    • A bankruptcy order (or in Scotland where sequestration is awarded in relation to the customer)
    • A debt relief order
    • An individual voluntary arrangement (or, in Scotland, a protected trust deed or a Debt Arrangement Scheme)
  • Take steps to repossess a customer’s home other than as a last resort, having explored all other possible options first
  • Threaten to commence court action, including an application for a charging order or (in Scotland) an inhibition or an order for sale, in order to pressurise the customer to pay more than they can reasonably afford
  • Commence proceedings or threaten to commence proceedings in the wrong jurisdiction
  • Commence legal proceedings or enforcement action where we are aware that a customer has submitted a valid complaint to the Financial Ombudsman Service (FOS)

Where we are seeking to recover debts under regulated credit agreements secured on land in England and Wales, we always consider the requirements of the relevant pre-action protocol (PAP) issued by the Civil Justice Council. We actively work with the customer and try to find alternative courses than that of repossession.

6.9 Writing off Debt

It is the company’s aim to pursue the full collection of a debt in all instances, however there are certain circumstances when an account or its arrears can be written off. Such instances can include (but not limited to): –

  • Where the customer or a 3rd party acting on their behalf have met the requirements for exception circumstance (e.g. death, terminal illness, extreme financial hardship, vulnerable customer). In such cases, the customer should always be notified in writing that their account or the arrears has been written off and will no longer be pursued by the company.
  • Where the cost of recovering, the arrears exceeds the arrears itself.
  • Where the customer can no longer be contacted or their whereabouts is unknown and all efforts to trace them have been unsuccessful.
  • At the request of the client (in cases where the account is being collected on behalf on someone else).

In these instances, the customer or the third-party acting on their behalf will be informed that the debt has been written off and will no longer be pursued.

6.10 Settlements, Deadlocks & Disputed Debt

6.10.1 Disputes

The company have strict and effective procedures and controls in place for managing accounts in arrears and those customers who miss payments. We therefore fully expect to be aware of and resolve any disputed payment issues prior to reaching the debt recovery stage. However, we do understand that every customer is different, and the disputes can arise at any stage after arrears have accrued.

Where full payment of a contract/debt has been requested and the customer disputes either the debt itself or their liability for making payment, we: –

  • Place the recovery action on hold and fully investigate the customers dispute reasons
  • Communicate with the customer on our findings of the investigation and provide a decision of whether the dispute is valid or not within 5 working days form receipt of the dispute
  • Where the dispute is invalid, we allow the customer a 7-day waiting period before resuming recovery action, so that they can either make payment in full or agree a suitable debt repayment plan with us
  • Where the dispute is valid, actions are taken to resolve/correct the disputed issue and we work with the customer to agree a suitable repayment plan or contract termination (if applicable)

6.10.2 Deadlocks

The company considers a debt to be deadlocked when a customer accepts liability of the debt and offers a repayment sum or settlement figure that is unacceptable to us. We always consider any reasonable offer to repay a debt and will look at each case on its merits and the customers’ circumstances. When considering any repayment offer, we always use a current financial statement and affordability assessment to make any decision and we will never pressurise a customer into increasing an offer or increase/suggest an increase in interest/fees on the account.

However, where we feel that an offer is well below the capacity of the customer or is unreasonable in terms of the repayment period, we will always provide the customer with a clear and concise reason for the rejection and propose alternative, acceptable settlements/repayments that would be reasonable to us. Where a counteroffer is proposed by us, we place the account on a 7-day hold to allow the customer (or their representative) adequate time to consider the offer.

6.10.3 Settlements

The company considers all settlement offers; however, it is our aim to have a debt repaid in full and to set up reasonable and affordable repayment plans where possible. If we accept a customer’s offer to settle a debt as full and final payment, we always communicate formally and unequivocally that the offer accompanied by the relevant payment has been accepted as settlement of the customer’s liability.

Where the customer sends a settlement payment without prior agreement of a full and final acceptance, the payment will be processed on the account and the customer informed in writing with a clear explanation of the continued existence of the debt and the possibility of the customer being pursued by us or another firm (where debt purchase takes place).

6.11 Statute Barred Debts

the company considers a debt to be statute barred where the prescribed period within which a claim in relation to the debt may be brought expires. In England, Wales and Northern Ireland, we recognise the limitation period as generally being six years in relation to debt and five years in Scotland.

We acknowledge that in Scotland, a statute barred debt ceases to exist and is no longer recoverable if: –

  • A relevant claim by us or on our behalf, has not been made during the relevant limitation period; and
  • the debt has not been acknowledged by, or on behalf of, the customer during the relevant limitation period

Whilst we acknowledge that in England, Wales and Northern Ireland, a statute barred debt still exists and is recoverable, we ensure never to attempt to recover such a debt where we (or someone acting on our behalf) has not been in contact with the customer during the limitation period.

We will only seek to continue the recover and pursuit of an outstanding debt that is statute barred, where we (or someone acting on our behalf) has been in regular contact with the customer during the limitation period. In these instances, all recovery materials and communications make the customer’s rights and obligations clear.

Where a customer advises us or someone acting on our behalf, that they will not pay a debt because it is statute barred, we will not continue to demand payment from that customer.

Where the debt arises under credit agreements, consumer hire agreements or P2P agreements and is subject to a prospective debt purchaser. We always identify debts that we know are statute barred, to avoid any inappropriate action being taken against customers in relation to such debts.

  1. Information on Status of Debts

Prior to an account being placed in debt recovery and throughout the recovery process, the company will provide the customer or another person acting on behalf of the customer, with information on the amount of any arrears and the full balance owing.

On accounts where: –

  1. The customer offers a settlement payment lower than the total amount owing (notwithstanding the acceptance of the customer’s full and final offer)
  2. We take the decision to stop pursuing the customer in respect of a debt arising under an agreement

The company contact the customer and third-party in a written format and clearly explain the continued existence of the debt and the possibility of the customer being pursued by us or another firm (where debt purchase takes place) in the future.

8) Interest & Charges

Where an account has entered a default stage and is either being pursued by the company or by a 3rd party for recovery, we always ensure that: –

  • When levying charges for debt recovery on customers in default or arrears difficulties, we always consider what is in the customer’s best interests and work with the individual to ensure that a satisfactory outcome is achieved without causing further personal or financial distress
  • We (or any 3rd party acting on our behalf), never claim the costs of recovering a debt from a customer where we have no contractual right to do so
  • We (or any 3rd party acting on our behalf), never cause a customer to believe that they are legally liable to pay the costs of recovery where no such obligation exists
  • Where we have any contractual right to levy default charges, we always ensure that a regulated credit agreement has previously stated any such charges and the conditions for making the charge under, as the case may be, the Consumer Credit (Agreements) Regulations 2010 (SI 2010/1014) or the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553).
  • We (or any 3rd party acting on our behalf), never impose charges on customers in default or arrears difficulties unless the charges are no higher than necessary to cover the reasonable costs afforded to us

9) Vulnerable Customers

This policy is used in conjunction with our Arrears & Default Policy and Procedures and our Vulnerable Customers Policy. We are dedicated to the fair treatment of all customers and have specific measures and controls for assisting those who are or may be vulnerable. Whilst a vulnerable customer may still be liable for the repayment of any debt, the company ensures that effective and adequate vulnerability measures are used in the recovery and communication of these accounts.

Where we use a debt collection agency for the recovery of debt, we ensure that where we have an existing knowledge of a customer vulnerability, all attempts to resolve the account or recover the monies in-house will be used in the first instance. Where resolution has not been possible, the agency will be informed of the vulnerability and we will monitor the account progress and communications monthly to ensure compliance with our vulnerable customer objectives and the regulations.

9.1 Signposting & Advice for Customers

Arrears on an account is often the sign that the customer is experiencing financial hardship and as such, all arrears customers should be treated with courtesy and respect. Where a customer has notified us that they are experiencing financial difficulties (or in the case of debt recovery which by itself is an indicator of financial distress), we ensure that there are provisions within our arrears, default and debt recovery letter for detailing information and links of where they can gain advice and assistance. These include, but are not limited to: –

9.2 Mental Health and Debt

In accordance with CONC 7.2.3 of the FCA Handbook, we consider customers with mental health difficulties or mental capacity limitations as being particularly vulnerable customers and utilise the guidance and principles outlined in the Money Advice Liaison Group (MALG) Guidelines ‘Good Practice Awareness Guidelines for Consumers with Mental Health Problems and Debt’.

The company will always suspend the pursuit of recovery of a debt from a customer when we: –

  • Have been notified that the customer might not have the mental capacity to make relevant financial decisions about the management of their debt and/or to engage in the debt recovery process at the time
  • Understand or ought reasonably to be aware that the customer lacks mental capacity to make relevant financial decisions about the management of their debt and/or to engage in the debt recovery process at the time

We always provide customer’s or those acting on behalf of the customer, a reasonable period of time to provide evidence as to the likely impact of any mental capacity limitation on the customer’s ability to engage with us and use our strict Vulnerable Customer Policy and Procedures in all interactions and communications.

10) Staff Training

The company has a rolling and detailed training program for new starters and existing staff which incorporates handling arrears accounts, financial difficulties, the recovery of debt and dealing with vulnerable customers.

We are committed to ensuring that the regulatory requirements are met at all times with regards to the service that our staff provide and also support our staff to ensure competency and ongoing professional development.

11) Responsibilities

The company will ensure that all staff are provided with the time, training and support to learn, understand and implement our Debt Recovery Policy & Procedures and any associated measures, controls and processes. Management are responsible for a top down approach and in ensuring that all staff are included and have the support needed to meet the regulatory requirements in this area.

The Compliance Officer and Collections Manager are responsible for Debt Recovery and Vulnerable Customer audits and gap analysis monitoring and their subsequent reviews and action follow ups, with a view to ensuring that regulatory, contractual and legal requirements are being met and that business objectives are being achieved.