UK watchdogs say they will take action against "threatening" debt collectors. A joint letter from regulators has revealed they will target the finance and utility sectors for volume and tone of correspondence to vulnerable customers.
They are warning they will take “robust action” against firms that are putting consumers’ mental health at risk by using threatening tones across letters, calls and emails. The letter is signed by the City watchdog, the Financial Conduct Authority, the energy regulator Ofgem, the water regulator Ofwat and the communications watchdog Ofcom.
“Customers subject to collections activity are highly likely to be in vulnerable circumstances due to financial difficulty – and may also have other, non-financial characteristics of vulnerability such as problems with their physical or mental health,” the regulators said.
READ MORE Kate Middleton spotted at favourite farm shop looking 'happy and healthy'
“Firms should be aware that customers in vulnerable circumstances may find it difficult to engage with creditors, and that their vulnerabilities may be exacerbated if creditors take an inappropriate approach to collections.”
“Where we find firms are falling short and delivering poor outcomes leading to consumer harm, we may take robust action,” the letter added. Their warning comes during debt awareness week, which is meant to highlight the support that is available to struggling borrowers.
Stuart Powell, managing director at Advice Guru Ltd, said: "“Finally, some joined up thinking. The barrage of calls, letters and emails is intimidating for anyone experiencing issues with repaying bills. Those who find themselves in this awful predicament rarely have issues with repaying one bill, instead the debt spiral affects all their commitments.
“I often visit clients who are experiencing mental health difficulties caused and exacerbated by individual firms chasing their money. A unified and coherent solution to support those in debt is long overdue.” Graham Cox, director at SEMH Self-Employed Mortgages, said: “As bankruptcies and arrears soar due to the cost-of-living crisis, it’s vital debt collectors and other bodies treat people fairly and with respect.
“It must be a horrible situation for anyone to feel overwhelmed by their debts, and it’s incumbent on the regulators to drive out bad practice and operators. There are still far too many horror stories of debt collectors bombarding debtors with home visits, calls and letters.”
