Harassment

Here at Wonga Wallah, we understand what its like when your debts are out of control. To be afraid to answer the telephone or open the post. While it is not unreasonable for your creditors to want to know when you are going to repay the money you owe, it is not reasonable and in fact it is illegal for them to harass you as defined in law.

Debt collection companies rely on the people they chase not knowing the law. They can often sail close to the wind even if they do not actually flout the law. Knowing your rights and being able to state them clearly and confidently will prevent them from using those tactics with you and will force them to deal with your case fairly and appropriately.

What Debt collection agencies are allowed to do

• Contact you if you default on your debts, loan repayments or credit agreements
• Call you at home or at work

What Debt collection agencies are not allowed to do

• Harass you
• Call you repeatedly at work or during unsociable hours
• Discuss your debt situation with work colleagues or neighbours
• Pretend they have more powers than they do

The laws that protect people in debt from unreasonable behaviour from creditors or their agents are: Section 40 of the Administration of Justice Act 1970 and specifically, The Protection from Harassment Act 1997. These state that it is a CRIMINAL OFFENCE if a creditor or their agent makes demands for payment in such a way that it causes alarm, distress or humiliation to a debtor or their family.

The methods that debt collection agencies use are normally based around fear. They attempt to scare you, the creditor, into handing over money you don’t have to prevent something dreadful happening. Often that prompts people to borrow more money to cover the payments, robbing Peter to pay Paul, as the debt spiral pulls you down. Once you understand how to deflect their tactics, you take control of the situation and your debts.

Most phone-calls demanding payment come from a call-centre. They employ people to read out a script, not to listen. Their script tells them to stop only when you agree to their demands. Here's the Wonga Wallah guide to dealing with debt and loan collection agency scare tactics

Common Scare Tactics

1. Call-centre bunny says "We won't accept your payment offer of £20 per month. We want £57 each month and if you don't comply, we'll take you to court."

Reality: This is normally an empty threat. This step is reserved only for people who don't make any offer of payment or ignore the debt collection company completely. But if it did go to court, is that actually so bad? Despite the scary sound, courts are there to give a fair hearing to both sides.

What would actually happen if you went to court? Well if you have contacted your creditor, made a reasonable offer of payment based on your current circumstances as backed up by your Statement of Affairs, the judge would most likely reject the case immediately for wasting court time, would insist that the company bringing the case pay all the costs, and would check that what you've offered to pay isn't TOO MUCH! The courts will not permit your income to be lowered to a level below which you cannot subsist. So as you can see, it is an empty threat. The debt collection company has nothing to gain by taking you to court. It's a scare tactic to make you pay more. If you negotiate directly with them and stick to your guns, you will get a reasonable outcome. They know this, so they move onto scare tactic 2:

2. Call-centre bunny says "If you don't pay us £57 per month, we'll send a debt collector round to your house."

Reality: Its another scare tactic. Yes, they can send an agent to your door to discuss matters with you (within sociable hours only). However it costs them a lot of money, they have no right of entry, they have no right to take anything from you and you are under no obligation to discuss anything with them. You might get more sense out of them than the call-centre bunny, but don't feel pressured. If you don't want to talk, stay cool and ask them to leave. If they do not, tell them they are trespassing and you will call the police. If they still don't go, call the police, tell them a stranger is trespassing on your property and there is likely to be a breach of the peace.

3. Call-centre bunny says "If you don't pay me now, we will send a bailiff round to seize your goods next week."

Reality: The timescale is nonsense. They have to have a County Court Judgement against you before they can instruct a bailiff. Even then, you do not have to allow a bailiff into your house and they cannot force access (but don't leave any doors or windows open).

4. Call-centre bunny is ignoring your letters containing reasonable offers to pay and is still ringing you 4 or 5 times a day, at home or work.

Response: If you have written to them enclosing a copy of your SoA and a reasonable offer to pay, they just put the phone down next to the cradle and make yourself a nice cup of tea. Its their phone bill!

However, if you have reached the end of your tether or the calls are disturbing other members of your household, use a threat tactic of your own (and its not an empty one!) Tell them that you are taping the conversation and that you intend to report them to the Office of Fair Trading, under Section 40 of the Administration of Justice Act 1970, for Harassment. Tell them that from this point on you will only communicate with them in writing and any further calls from their organisation will be cause to instigate criminal proceedings under Section 2 of The Protection from Harassment Act 1997, and that their consumer credit licence does not protect them from prosecution.

Use the stunned silence to put down the telephone, pick up a pen and write the following letter:

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Dear Sirs,

RE: Credit Card No xxxx xxxx xxxx xxxx

I refer to my correspondence of (date) regarding the debt that I owe to your above named client. A copy of this correspondence is enclosed herewith, for ease of reference.

Since making my financial position clear to you, I have been constantly harassed by your operatives, who have attempted to intimidate me into making payments that I simply cannot afford to make, under my present circumstances.

I wish you to know, that I am aware of my rights and that your constant telephone calls are a breach of Section 40 of The Administration of Justice Act 1970 and any further incidents of this nature constitute a course of conduct, which is a criminal offence under Section 2 of The Prevention from Harassment Act 1997.

Please note, that whilst I take my obligation to you seriously, I will not tolerate such abuse and if I receive any further telephone calls from your organisation, I will have no hesitation in reporting the matter to The Office of Fair Trading, whom you may be interested to know, are currently encouraging reports of this nature.

I would be obliged if you would kindly acknowledge receipt of this letter and confirm that there will be no further attempts to contact me by telephone. I am entirely happy to communicate with you in writing and would be obliged if you would give my proposals, serious consideration.

Yours faithfully

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This should be an end to the phone calls, but if it is not, follow through with your threat. Report them to the Office of Fair Trading and your local trading standards office. There is document issued by the Office of Fair Trading listing what is and is not acceptable behaviour by debt collection agencies and their representatives: OFT Debt Collection Guidance. Firms that flout this guidance can have their licence removed.

Use it, take control of your money with the Wonga Wallah and don't be a victim!

Here is a factsheet from the Insolvency helpline on harrassment.

"Discombobulated bankrupts"