Now it's debt collection - by text
Some debt collection agencies are pushing at the boundaries of legal guidelines when it comes to tracking down those who owe them money and are often targeting the wrong people, claim debt charities.
They are increasingly turning to text messaging as a means of getting a response, but texts, voice messages and postcards sent out carelessly are causing distress to those who receive them.
Roger recently received a text message, converted to voicemail, saying: 'This is Sandra Johnson. Please contact Red urgently. You must call today' - followed by a reference number.
Roger was distressed that Sandra, his ex-wife, was texting him four years after a bitter divorce and wanted no contact with her. But he also had a friend nicknamed 'Red' so he wondered if he was in trouble.
After some deliberation, he rang the number with the intention of telling Sandra not to bother him again. His call was answered by a man who asked for the reference number. It transpired that Roger was talking to a call centre for RED, a debt collection agency based in Leeds acting on behalf of Capital One, to which Sandra owed money.
Every day, debt collection agencies mistakenly contact innocent people living at addresses where a debtor used to live. Roger has become used to the thrice-yearly cycle of these agencies calling at all hours and asking to speak to Sandra, or sending letters addressed to her. The letters go back in the post marked 'current whereabouts unknown'.
When an agency phones, he wearily explains yet again that no, Sandra doesn't live there any more and he doesn't know where she is. The agency, in turn, reports back in this case to Capital One that it can't locate Sandra, and Capital One hires another agency to find her. And the cycle starts all over again.
The message 'this is Sandra Johnson' in the text that Roger received by voicemail turned out to have been caused by a glitch. Andrew Bartle, chief operations officer for Lowell Group, which owns RED, says: 'This was the last known phone number and address we had for Mrs Johnson and in trying to contact her we sent a letter and a text message. The text message clearly stated "Mrs Sandra Johnson, please contact RED urgently". However, in response to Mr Johnson's concern we have listened to it when converted to a voice message and we appreciate it is difficult to tell what is being said. As a result we will be changing all our text messages to start "This is a message for".'
CIFAS, the UK fraud prevention service, says that texting is increasingly being used by agencies as a means of debt collection. Companies such as Esendex and Relaystation provide the necessary facilities. They claim that texting produces a higher response rate than traditional methods of contact, up to 38 per cent in some cases. Usually a debtor receives a text reminding them that a payment is due.
Typically, this states: 'Your next instalment of £20 is due on [date]. Please call [number] to arrange payment.'
A spokesman for the Institute of Credit Management, however, says that some agencies send more obscure texts to debtors as a way of tracking them down. The message sent might simply say, 'Please contact Susan on 0777 000000', with the recipient assuming that it is a Susan they know, or they might simply be intrigued and return the call.
Debt collection agencies are licensed and regulated by the Office of Fair Trading under the Consumer Credit Act. The OFT published revised guidelines in 2006 on ethical practice. These clearly state that a licence can be revoked where there is evidence that an agency has 'engaged in business practices appearing... to be deceitful, oppressive or otherwise unfair or improper (whether unlawful or not)'.
Examples of unfair practice include 'those contacting debtors not making clear who they are, who they work for, what their role is, what the purpose of the contact is'.
Debt counselling bodies say that they come across instances of malpractice on a daily basis.
The Consumer Credit Counselling Service (CCCS) has a case on its files of a woman who received a text from 'Gary' asking her to call urgently. When she rang, she got through to a debt collection agency which told her that no one called Gary worked there, but that they were very keen to discuss her debt.
This would appear to be a clear case of a breach of OFT guidelines, according to the CCCS.
Peter Tutton, national debt policy officer for Citizens Advice, says: 'We are aware of agencies sending texts that are threatening and aggressive, although it is clear who the sender is. Agencies have also resorted to sending anonymous postcards urging the recipient to call a number. We have a lot of evidence that some debt collection agencies are pushing the guidelines to the limits, or breaching them altogether.'
Meanwhile, Roger has discovered that, despite writing to Capital One several times to inform it that Sandra moved out four years ago, he can't force the company to amend its records as he is not a customer. None of the financial industry's codes of practice make provision for people like Roger to stop the debt collectors trying to make contact in pursuit of a debtor.
· Some names have been changed to protect identities.
Source: The Observer
