Rogue debt collectors face tough new rules in a Government bid to improve consumer protection in this contentious area. This is because of changes to the Consumer Credit Act 2006 (CCA) which have recently come into effect.
Chief among the new powers given to the Office of Fair Trading (OFT) is the ability to fine debt collectors up to £50,000 for infractions and to impose limitations on the licences under which they operate.
Another major change is the removal of the limit of £25,000 above which the CCA did not previously apply. This means that even large loans (including those currently in existence) are now governed by its provisions.
The OFT has also imposed more stringent criteria for the granting of a licence to operate as a debt collector.
In October, further changes to the CCA will require lenders to provide borrowers with additional information, including annual statements.
Pinder Reaux & Associates