If you get a letter saying you owe money on a debt you don’t recognise, or which you thought you had paid off, you need to challenge the creditor to prove that you do owe the money.
Sometimes debt collectors have simply got the wrong person. This is sometimes called a mis-trace.
This is what the Financial Ombudsman says about mis-traces:
We would ask a debt collector to provide evidence to show that they are seeking repayment from the correct person. It would not be enough to say, for example, that the person has the same name as the borrower or hirer, or even the same name and date of birth. We would look for some convincing reason to link the person to the debt.
First think about whether you might owe this money? If your name is James Lewis they may have got the wrong person; if your name is Edith Chicken that’s less likely. If it seems to be a debt to Orange and you have been with Vodafone for the last 15 years, it probably isn’t yours etc.
When not to send a Prove It! letter
Before you send a Prove It letter, check if any of the following circumstances applies:
- if the letter is addressed to someone else but has your address, this page explains what to do. (NB this is meant for when the letter clearly isn’t for you – not if it has your maiden name or the name is slightly mis-spelled);
- if the debt appears to be old, probably more than six years since you last made a payment to it, then you need to talk to a specialist debt advisor, not reply to the creditor. The time limit for recovering the debt may have run out, so you need to find out more about Statute-Barred Debt and talk to National Debtline;
- the letter has no details about the debt at all Sometimes debt tracing firms send out very vague letter, just inviting you to get in contact. See Prime Location Services – contacting you about a debt for an example. In this case you could decide to just ignore it. But if letter continue to come, take action!
- if you have received court papers, you don’t have time to send a Prove It letter as there are tight timescales to enter a defence. Don’t ignore court papers, otherwise you will get a CCJ. Read What to do if you get a Claim Form and contact National Debtline as soon as possible if you are unsure;
- if the letter says there is already a CCJ (perhaps the court papers went to a previous address?) then the Prove It letter below is not appropriate. You can see if there has been a CCJ issued in the last six years by checking the Trust Online database. If there is a CCJ for a debt you do not recognise, talk to National Debtline about applying for the CCJ to be “set aside”.
Send a Prove It letter
But if you don’t think the debt was ever yours, or you are unsure and it isn’t likely to be close to six years old, then you should write a “Prove it!” letter to the debt collector. Neither deny nor acknowledge the debt, just ask them to supply proof that the debt is yours as follows:
I suggest that you don’t include your telephone number in this letter – dealing with this sort of thing by mail is less stressful. Keep a copy of this letter and send it recorded delivery.
The proof, when and if it comes, should be enough of the following list to prove that you do (or did) owe the money, or indeed indicate that it is somebody else who is the Debtor:
- Credit Application; Loan Agreement;
- Statement of Account showing details and dates of debits and credits including payments, interest and charges to the account and the current amount outstanding;
- Copy of Default notice, copy of formal demand; and
- where the debt has been sold, copies of letters from original creditor stating that, plus letters from the current creditor stating that.
If they can produce these, they may jog your memory. Not all the items on the list may be available, but enough of them have to be to clarify the situation if they want to pursue you.
After you have sent a Prove It letter
You don’t get a reply
If it all goes quiet, then the debt collector may have been on a ‘fishing expedition’ and decided not to bother you any more – so if you don’t hear anything, just file the letters away somewhere and don’t worry.
But if this incorrect debt is showing on your credit records, you want that sorted. Write to the debt collector again after a few weeks, repeat that this debt is not yours and tell them to remove the entry from your credit records with Experian, Equifax and Call Credit. In this case you should also inform the Credit Reference Agencies that the debt is in dispute.
More demands arrive
If they don’t reply with any proof after a few weeks but letters demanding payment continue to arrive, then write a second letter with COMPLAINT in capital letters at the top.
I have looked at one reader’s case where the debt collector was sending very misleading letters here: “Debt collector can’t prove it’s my debt but wants payment”.
Going to the Ombudsman – which Ombudsman?
If the debt collector ignores this second letter, then I suggest you complain to the relevant Ombudsman after 8 weeks. During this time, make sure you keep a record of any more demands from the debt collector – by phone, text, email or letter.
This will be the Financial Ombudsman (FOS) if the debt appears to be a loan, credit card, catalogue or an overdraft. How to send FOS your complaint is described here.
For other types of debt (energy bills? mobile phones? etc) there are different Ombudsman. Sometimes one will be mentioned on the letter you have received. If not, phone National Debtline and ask who they think you should complain to.