Creditor Harassment & Mental Health
Disclaimer: This site primarily focuses on residents in the UK, however, it’s okay if you are from another part of the world as we try to help everyone. One thing you must take into consideration is this article has links to UK Government Official Bodies. Should you be reading this in the USA for example please contact your local legal office for advice. Furthermore, if you are experiencing financial difficulty and you are in debt, tell someone, you should not suffer in silence. Write down all your income and outgoings and let your creditors know you are finding things difficult. Ask them for extra time. They may give you an option to pay reasonable amounts without you losing sleep. No one should get themselves so worked up that it affects their mental health.
Who is a Creditor?
A creditor could be a bank, a credit card company, a business, a loan company, or a utility provider.
The creditor usually provides property, services, or lends out money, including but not limited to anything you have taken out on finance such as a car, white goods, or even phone/broadband providers.
A creditor is basically a person, a business, or an institution you own money to.
All creditors should give you the option to pay off the debt in installments even going as far as capping interest rates.
It will take the creditor a lot longer to get his/her money if he/she has to pay a credit agency or if you agree on an IVA where most of your debt is written off.
Most creditors are reasonable but there are a few that are not.
Explain how the debt is affecting your mental health and if you are unable to function properly or go to work, (after all they want you to continue getting a wage, in order to pay them). Most will be understanding and show empathy but there will be a few that may not care.
Remember to document everything including saving emails/text messages and letters which all count as evidence of your communication.
The Protection from Harassment Act 1997
A creditor that continually phones and texts on your business number causing you to turn it off consequently causing you to lose business is causing a criminal offense.
Debt collecting agencies and creditors, especially credit card companies use multiple telephone and mobile numbers and even if you block them they will still get through, even if you have blocked all notifications and incoming calls.
They after getting their money back by any means possible. Some have no regard for your circumstances or your mental health and may become patronizing, judgemental, and condescending when you finally contact them.
Engaging in harassment during the debt collection process is also deemed a criminal offense.
“The harassment may be verbal or written, either via letter, email or text and includes making repeated calls and texts during non-social times or to the workplace of the debtor”.
The Protection from Harassment Act 1997 considers it a criminal offense for a person to take any action that is known or should be known, to be harassing another person.
DEBT COLLECTION GUIDELINES
The Office of Fair Trading (OFT) specifies unfair practices regarding debt collection in its Debt Collection and Debt Management Guidelines. These include accounts in arrears or those having missed payments.
The Guidelines focus on a section about “contacting debtors at unreasonable times and intervals.”
Hours for contact regarding intervals and times that may be considered unfair are outlined. Making multiple calls during working hours, using the business number, phoning at unsociable hours, contacting neighbors and informing them of the purpose of the call, and contacting a debtor at his or her workplace are included in the whitepaper.
HOW TO HANDLE A HARASSING CREDITOR
If you think a creditor has violated one of the above laws or is not in compliance with the OFT Guidelines, you should discuss the issue with the creditor or a collection company representing it. Always reach out to the creditor with the initial complaint and then escalate it with the professional body if you feel your complaint is not taken seriously. Tell your creditor how you want to be contacted in the future and ask them to confirm this in writing.
Your letter should state that harassment is a criminal offense and you can take further action if your creditor doesn’t stop. Initially, you could write to them by email, usually, they have autoresponders confirming receipt of your email. Give them a few days to reply. Follow up by a snail mail postal letter and remember to send all letters by recorded delivery and keep copies so that you have a record of your complaint.
Prior to making contact, gather all your evidence including calls/texts (screenshot the message and capture the phone number and date) and visit times, and any emails or letters that you consider threatening or menacing.
The letter should include a request that the party immediately stop the behavior. You should also provide a preferred method of contact and acceptable times to make contact.
Once your complaint have be received and acknowledged, your creditor has 3 business days to respond informally. This could be by phone or email (This depends on your preferred method of communication as outlined in your letter of complaint). A final response letter might take longer. Your creditor also has to report your complaint to the Financial Conduct Authority (FCA), even if they respond within 3 business days.
If the creditor fails to change its practices following receipt of this letter, submit a formal complaint to the Citizens Advice Bureau, Trading Standards, or OFT.
If the behavior of a bailiff, creditor, or collection agency ever becomes extremely threatening or violent in nature, notify the police immediately.
Support Making A Complaint
If you need help complaining, writing letters, or phoning your creditors, you can phone the debt helpline on 0300 330 1313. Lines are open between 9 am and 8 pm, Monday to Friday. Calls cost the same as calls to landline numbers. Alternatively, You can also get help by contacting your nearest Citizens Advice.
You could also contact us and we could send you a template letter and you just need to fill in the blanks.
To escalate your complaint you should complain to a professional body too. Your debt collector may belong to a trade association or professional body with a code of practice (FCA) that sets out how they are supposed to behave towards you.
In Northern Ireland, you can contact the Consumer line at: www.consumerline.org.
If you are wondering if your lender belongs to a trade association that has a code of practice, then check out this link for Further Help. The trade association may also take action against its members who break the code of practice.
If your complaint is against a bank, building society, or credit card company, they may belong to the Standards of Lending Practice.
The Standards of Lending Practice have guidance for members which they should follow.
- Avoid putting pressure on a lender and not allowing harassment.
- Should advise to consolidate the debt or debt management.
- Should provide support if the lender is vulnerable, for example, if you have physical or mental health problems.
- Should use trustworthy debt collection agencies who must also follow the Standards of Lending Practice if the debt is passed on or sold.
You should complain to the bank, building society, or credit card company first, using their complaints procedure. If this does not sort out the problem, you can complain to the Financial Ombudsman Service, telling them that a debt collector or creditor has broken the terms of the Standards of Lending Practice. For more information about complaining to the Financial Ombudsman Service, go to the Financial Ombudsman’s website at: www.financial-ombudsman.org.uk.
Complaining about a solicitor acting for a creditor
There may be times when the debt is forwarded to a legal team and initially you get a letter from a solicitor notifying you that you have defaulted and a demand for a payment settlement. If a solicitor then starts to become harassing you on behalf of a creditor, this is considered to be professional misconduct.
To make a complaint about a solicitor, you will first need to use the firm’s internal complaints procedure. What this means is you will have to contact the law firm and lodge a complaint. If the complaint is ignored or handled unsuccessfully, you can then escalate to the Law Society. If this does not resolve the problem, you can complain to one of the professional associations. A bonafide solicitor will be a member of the Law Society and you can find their registration number in the footer section of their website. You can also check the Law Society website if the law firm or solicitor is a member.
If they are registered in England or Wales, you can complain to the Solicitors’ Regulation Authority (SRA) at www.sra.org.uk. If they are registered in Scotland, you can complain to the Scottish Legal Complaints Commission (SLCC) at www.scottishlegalcomplaints.org.uk. If they are registered in Northern Ireland, you can complain to the Law Society. Go to www.lawsoc-ni.org.
Complaining to the Citizens Advice Consumer Service
If you want to complain about a local firm, you can contact the Citizens Advice Consumer Service. They can put you in touch with your local Trading Standards Office, which can investigate whether an offense had been committed.
In Northern Ireland, you can contact the Consumer line at www.consumerline.org.
Complaining to the Financial Conduct Authority (FCA)
The FCA has rules and guidance about debt collection. Although the FCA cannot take up your individual case, they can refuse or revoke the firm’s authorization or, for example, fine the firm. It may be worth reminding the creditor that breaching the rules could affect their FCA authorization.
More about the FCA rules and guidance on debt collection in the FCA’s Consumer Credit Sourcebook at www.fca.org.uk.
Illegal money lending
In desperate times we sometimes do desperate things and we may come across companies offering us money dangling a golden carrot until the day come to pay our loan back, we may get into financial difficulty and this is where we end up in murky waters.
It’s easy to borrow money but it’s not so easy to pay it back.
You may have borrowed money from a moneylender who is not FCA authorized. These lenders are for the better word often called loan sharks and they may physically or verbally threaten you if you can’t pay back the money.
They also charge extremely high rates of interest, which means you may end up owing much more money than you originally borrowed.
It’s important to remember that loan sharks are breaking the law by lending you money in this way. They can’t enforce the high rates of interest they are trying to charge. You can’t be legally made to pay back the money and you have not broken the law if you don’t pay it back.
If you are being harassed or threatened by a loan shark and you think your life is in danger you can phone the police. If loan sharks threaten you or your family they can be prosecuted. You should also report them on the GOV website to find out how to report a loan shark on GOV.UK.
Reporting a problem to Trade Standards
If you want to report a problem, you should contact the Citizens Advice consumer service, (citizens advice is a community of volunteer solicitors, usually found in every town/city in the UK). The citizen’s advice will then share the information reported with Trading Standards.
Creditors Are People
Some creditors and debt collecting agency may take their jobs too seriously and may become patronizing, judgmental and condescending, and even sometimes intimidating or threatening.
“You should not live in fear of another person or organization. It is not your fault that the powers that be have decided on price hikes and consequently got you into debt”.
Creditors are the people at the end of the day, either owners of businesses or employees trying to do their jobs.
If you owe money to a creditor and stop making payments, they can take action against you to get their money back. Therefore it is best to write to them, that way everything is documented, giving them a proposal on how you plan to pay the debt off.
“If you have more overheads than the income coming in tell them this. No one on the planet can get blood out of stone”.
Try to exhaust all avenues of getting extra money to pay your debt off before saying you have no money.
If you have reached out to everyone you know and have contacted organizations that may give you grants and been unsuccessful then by all means be truthful with yourself and with your creditors and do not try to brush the problem under the carpet because it will not go away and will only get worse if you do nothing over time.
You could save yourself money with postage simply by emailing them. Explain your incomings and outgoings and ask them for more time. Ask them to spread the cost of what you owe over a fixed term between 12 – 60 months.
“No One Should Live In Fear and pushing people into a corner may send them over the edge”
How Creditors Are Supposed To Behave.
Creditors are supposed to behave professionally, they should not express their personal opinions, or become, patronizing, judgmental or condescending towards you when they are trying to recover their money.
Harassment is any action that makes you feel emotionally distressed, stressed, anxious, humiliated, or threatened. It makes you live in fear and will consequently damage your mental health.
If you feel you are being harassed and becoming unwell because of a creditor, there are several things you can do to stop them from doing it.
If you need help talking to a creditor about their behavior, you can also phone the trading standards debt helpline on 0300 330 1313 if you are located in the UK. For all other countries find your local debt management agency that can assist you further.
Citizens Advice (UK) is open between 9 am and 8 pm, Monday to Friday. Calls cost the same as calls to landline numbers.
You can also get help by contacting your nearest Citizens Advice.
If you’re struggling to pay your debts because of coronavirus.
If the creditor tries to do any of the following things to try and get you to pay back the money you owe, this could be considered harassment. They include:
- If a creditor or debt collection agency contacts you several times a day (during working hours, whilst you are at work), or early in the morning or late at night.
- If a creditor or debt collection agency pursues you on social networking sites such as Twitter and Facebook, LinkedIn.
- If a creditor or debt collection agency puts pressure on you to sell your home or take out more credit.
- If a creditor or debt collection agency uses more than one debt collector to chase you for payment.
- If a creditor or debt collection agency does not inform you that your debt has been passed on to a debt collection agency.
- If a creditor or debt collection agency uses paperwork or business logos that appear to be official when they’re not, (this is fraud) for example sending you letters that look like court forms.
- If a creditor or debt collection agency puts pressure on you to pay all the money off, or in larger installments when you can’t afford to.
- If the creditor or debt collecting agency becomes threatening you physically or verbally abusive to you.
- If a creditor or debt collection agency ignores you if you say you don’t owe the money.
- If a creditor or debt collection agency tries to embarrass, humiliate or intimidate you in public.
- If a creditor or debt collection agency tells someone else about your debts or uses another person to pass on messages, such as a neighbor or family member.
- If a creditor or debt collection agency falsely claims to work for the court or be a bailiff in England and Wales or sheriff officer in Scotland (this is deemed as fraud).
- If a creditor or debt collection agency implies that legal action can be taken when it can’t. For example, implying that your home can be taken from you without a court order.
- If a creditor or debt collection agency gives the impression that court action has been taken against you when it hasn’t.
- If a creditor or debt collection agency gives the impression that not paying the debt is a criminal offense. For most debts, it is not a criminal offense if you don’t pay them.
What doesn’t count as harassment by a creditor?
Not all actions that a creditor takes can be called harassment. Creditors are allowed to take reasonable steps to get back the money they owe them. These include:
- Sending reminder letters, texts, or emails.
- Telephoning you to ask for payment (not during working hours and not on your business phone).
- Call at your home, as long as this is at a reasonable time of the day.
- Taking court action.
If you’re being harassed by a creditor it’s important to know who is chasing you for payment.
You may be surprised that the people in your case may not be the people you originally owed money to. This is because your original creditor may have sold the debt to someone else to collect. If your original creditor does this, they cannot come after you for money, instead, you will have someone else in their place. If your creditor decides to pass the debt on, they must tell you in writing before they do it.
Your debt may be collected by:
- Your original creditor
- A debt collection agency acting on behalf of your creditor
- A third party who has bought the debt from your creditor
- Bailiffs in England and Wales or sheriff officers in Scotland.
What can you do about harassment by a creditor?
You first need to find out who is actually collecting the debt. You then need to take the following steps:
- collect evidence of the harassment
- complain to the creditor
- complain to a professional body.
Things to consider before making a complaint, gather as much evidence as you can to support your claim.
Depending on the seriousness of the situation this could include (although not all compulsory) It makes sense to gather as much evidence as possible to build your case:
- Documenting the number of visits or calls with dates and times. Write down what was said to you each time and who you spoke to.
- Has the original correspondence been printed to include letters, documents, emails, and texts you have received?
- Witness statements from neighbors or other people who live with you.
- Evidence of your circumstances.
- Any medical evidence if you suffering from mental health issues.
Trade and professional associations
Your creditor may belong to one of the following trade or professional associations which have a code of practice that its members must follow. You can find a list of members on the organizations’ websites:
The Finance and Leasing Association
15 -19 Kingsway
Credit Services Association
2nd Floor East
Newcastle upon Tyne
Consumer Credit Trade Association (CCTA)
Suite 4 The Wave
1 View Croft Road
Financial Conduct Authority (FCA)
12 Endeavour Square
Other useful information
We also have a useful links page of resources such as Charities and Other Organizations.
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Renata is a businesswoman and published author. She primarily focuses on helping people with disabilities to startup businesses and offers Digital Marketing, Website Creation, SEO, and Domain Brokering.
Renata Is A Disabled Entrepreneur.
She Has A Condition Called Cerebellar Atrophy (Cognitive Impairment), and Also Suffers From OCD (Obsessive Compulsive Disorder).
She is an advocate for Mental Health, Motivational Empowerment, and Personal Development. She tries to find support for vulnerable men and women in all aspects of their health journey.
Renata is the Editor of Disabled Entrepreneur - Disability UK Online Journal and Cymru Marketing Business Journal (CMJUK) Online Magazine.
Renata has a large network of nearly 12K connections on LinkedIn, including Directors, CEOs, Millionaires, Billionaires, and Royalty. https://www.linkedin.com/in/renata-b-48025811/