OFT calls for debt collector curbs

The Department of Trade and Industry yesterday responded to demands for tougher curbs on debt collectors by pledging to publish a White Paper on consumer credit in the autumn.

This followed a call earlier in the day from the Office of Fair Trading for a stronger law to restrain debt collectors, as there was little it could do to enforce its latest guidance on unfair debt collecting practices.

Ray Hall, the head of the OFT's credit branch, said: "Next year we shall review the degree of compliance with this guidance, but lenders and collectors are not obliged to respond, and we cannot carry out compliance visits. Indeed, after a firm has been licensed by the OFT it does not have to tell us anything, so we would like the law to be strengthened."

This confession weakens the OFT's claim that debt collectors who do not deal fairly with debtors under the new code face losing their licence. The OFT last year received 187 complaints about debt collectors, a figure which it admits is no more than "the tip of the iceberg".

The OFT guidance lists a range of unfair behaviour, including failure to check records when a debt is disputed, failure to deal with Citizens Advice Bureaux, contacting debtors at unreasonable times or intervals and falsely claiming to be a court official or having court authority. But debt collectors told the OFT that any debt dispute was "purely a delaying/avoidance tactic". Debtors should be able to prove that they do not owe the debt.