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Debt collection London (UK)
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The debt collection process in London and generally in the UK is performed by professional DCAs (Debt Collection Agencies), providing various recovery services for creditors and acting on behalf of the same creditors. Their main function is to collect delinquent amounts & bad debts from debtors. A debtor is generally an individual or an organisation, which has failed to settle certain amount owed, for a specific period of time (until a deadline period). The debt collection in UK include different tracing services, credit checks, pre-legal and legal actions, court actions and continuous monitoring of former debtors and potential default accounts. UK laws regulate all debt collection London actions and processes. Debt collection in London can vary between local and international service plans. Logically it can trace both UK and nationwide debtors. If the DCA operates on nationwide level, it complies not only with local, but also with international regulations as well. Such debt collection operators generally target unsecured consumer (individual) and commercial (B2B, “business-to-business”) bad debts and delinquent payments.
Regulated range of actions in debt collection (UK)
The whole recovery process is strictly regulated by: the Late Payment of Commercial Debts Act; the former Office of Fair Trading, from April 2014 divided into the CMA (Competition and Markets Authority) and the Financial Conduct Authority; also the international Late Payment in Commercial Transactions EU regulation; the Consumer Credit Regulations (EU directive); Late Payment of Commercial Debt Regulations; Fair Trading Act; the Financial Conduct Authority, etc. At http://www.findlaw.co.uk/law/bankruptcy/ information about different UK laws can be found.
According to UK and international laws and regulations, debt recovery agencies have the legal right to contact debtors on behalf of the original creditor and collect bad debt amounts. They can communicate with the subject of debt by emails, phone calls (within the accepted time frame, and without weekends and bank holidays); send official letters (including friendly reminders, letters of demand and letters before action). Default collection London agencies are also allowed to perform in-house personal visits and to offer the debtor different payment plans to settle the bad debt in full. Such negotiation plans can vary from weekly to monthly payments until the default amount is cleared. UK debt collection companies can send bailiffs and debt legal attorneys, and to transfer the case to court, if litigation process is required.
Debt collection London agencies can contact debtor’s relatives, colleagues and employers, as long as they keep the matter of the call completely confidential. The purpose of contact has to remain classified and should be familiar only to the subject of debt.
Common types of debt collection in UK
UK agencies mainly target debtors who owe unsecured commercial and consumer debts. “Unsecured” means that the debt is not followed by any form of collateral. Such debts can be student loans, medical debts, purchase default payments, credit card debts, unpaid healthcare bills, etc.
Individual debt collection London means debt recovery of consumer debts. Here the debtor is an individual and the creditor is a company or an organisation. Debt recovery agencies, which collect consumer debts, are under the regulation of the OFT (Office of Fair Trading), Competition and Markets Authority, the EU directive for Consumer Credit Regulations law, and others.
B2B debt recovery London includes all types of commercial, business-to-business debts and delinquent amounts. Both debtor and creditor are business organisations. B2B default collection London acts under the EU Directive for Late Payment in Commercial Transactions , the Late Payment of Commercial Debt Regulations (LPCDR), etc.
Debt collection in London can also be divided into first-party or third-party. First-party agencies act in creditor’s company and are part of its subdivisions. The collection methods are the same as for third-party debt recovery, but the collection process starts earlier. Third-party debt collection London is represented by private DCAs. They are not involved in the original contract between creditor and debtor. Such agencies are hired by the lender and act on his behalf, but they are not members of creditor’s organisation. They usually operate in return of a commission fee, which is paid by the creditor. Some third-party collection agencies can require their interest to be paid by the debtor instead. Their percentage is a fixed rate from the whole debt amount.
All types debt collection agencies in London generally have the same authorities, but are regulated by different UK acts and institutions. Different UK laws state that a first-party debt collection agency is authorised to recover its debts, but is not allowed to charge the debtor a DCA’s commission fee, if the first-party agency acts under the same name as the creditor. Other chapters of UK laws announce that the original lender has the right to claim late payment fee from the subject of debt. However, this is possible only if such clause for additional late payment fees is mentioned in the terms and conditions of the contract between debtor and creditor.
Used literature & external links
http://www.crfonline.org/orc/cro/cro-5.html
http://www.bizhelp24.com/money/debt-collection
https://www.gov.uk/your-rights-bailiffs/what-you-can-do-when-a-bailiff-visits
http://www.mylawyer.co.uk/restrictions-of-debt-collectors-england-and-wales-only-a-A76055D35207/
http://www.mylawyer.co.uk/bailiffs-and-debt-collectors-england-and-wales-only-a-A76055D34340/