A reader, Ms J, asked:
I sent a Prove It! letter to a debt collector as I have no recollection of debt they say I owe.
They replied saying that they cannot “provide specific details to your dispute” and we have marked your account as unenforceable meaning we will not pursue legal action and have informed our client to remove any reporting on your credit file. However the above account remains outstanding.
I have now received another letter asking me to get in touch to arrange a payment plan. What should I do?
The simple answer is that Ms J should not be paying anything until the debt collector produces some evidence that the debt is hers!
The creditor has to prove who the borrower is
Ms J has told the debt collector she does not recognise the debt by sending a Prove It! letter.
The rules for disputed consumer credit debts are in section 7.14 of the FCA’s CONC handbook. These include:
Where there is a dispute as to the identity of the borrower or hirer or as to the amount of the debt, it is for the firm (and not the customer) to establish, as the case may be, that the customer is the correct person in relation to the debt.
So Ms J does not have to prove that the debt isn’t hers – proving a negative is extremely difficult!
Instead the debt collector has to show the reasons why it thinks she was the borrower. For example, a copy of the CCA agreement for the debt would have had the name and address of the borrower.
The debt collector’s response gave the date that the debt collector acquired the debt and said what the balance is. But it said nothing about who the borrower was. The debt collector said it was unable to provide these details, so it said the debt was unenforceable.
The letter saying the debt was unenforceable is misleading. It refers to “your debt owed to us” and says the balance of the account is outstanding. But neither of these things has been proved.
If Ms J was the borrower, her debt would be unenforceable if the CCA cannot be produced. In that case the debt collector could still ask her to repay the debt even though it was unenforceable.
But here the debt collector hasn’t proved that Ms J took out this loan. So it has no right to ask Ms J to make any payment.
The last letter is also misleading
Here is a part of the most recent letter Ms J received:
This letter does not mention that the debt is unenforceable.
CONC 13.1.6 (4) says that when someone has made a request for a copy of their CCA agreement and it cannot be found, all future requests for payment from a creditor should make it clear that the debt is unenforceable.
Ms J technically didn’t ask for a copy of the CCA agreement. However as the debt collector has accepted the debt is unenforceable, I think it should follow 13.1.6 (4) and have said in this letter that the debt is unenforceable.
The letter made references to “further collections activity …. which could include… “. That is misleading and threatening as it suggests there are other sorts of collection activity that may happen. But with an unenforceable debt there aren’t!
Ms J should complain about this
If Ms J ignores this letter or replies refusing to pay, there is nothing the debt collector can do apart from repeat the requests for a payment arrangement.
But I don’t see why Ms J should have to put up with this. I think she should complain.
Most debt collectors will have an email address people can send complaints to. If she sends a letter, she should send it recorded delivery.
A complaint could look like this:
Taking a complaint to the Ombudsman
I hope this won’t be needed!
You have to give a firm 8 weeks to reply to a complaint. During this time, make sure you keep a record of any further letters, emails or phone calls from the debt collector.
If your complaint is rejected, it is simple to send your complaint to the Financial Ombudsman.
The Ombudsman Complain Online form asks you for all the information that is needed. The complaint itself can be a copy of what you sent the debt collector. And you can attach information, such as the letters between you and the debt collector.