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.
Do think about whether you might owe this money!
If your name is James Parker they may have got the wrong person; if your name is Edwina 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.
When not to send a Prove It! letter
Before you send a Prove It letter, check if any of the following circumstances applies, as there are better options for you in these situations.
The letter is addressed to someone else
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.
Even if the letter has your address, it is not intended for you. This page explains what to do.
You know what the debt is and it is old
If it is 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;
You are sure the debt was settled with the original creditor
This could commonly be for a utility bill for a previous address, or a mobile bill from a previous provider. There is no point in arguing with a debt collector about whether you have been billed for water after you left the property, they won’t have the details.
Instead you need to dispute the debt with the original creditor and tell the debt collector that you are doing this.
The letter has no details about the debt at all
Sometimes debt tracing firms send out a very vague letter, just inviting you to get in contact. See Reunite or Prime Location Services – contacting you about a debt for an example.
In this case you could decide to just ignore it. But if letters continue to come, write and ask for details of the alleged creditor.
You have received court papers
Here 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, or you will get a CCJ.
If the letter says there is already a CCJ
Perhaps the court papers went to a previous address or you ignored them? Here 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.
There are two options in the following template.
One says that you have no knowledge that there is a debt. This would be appropriate if you once had a phone contract with X or a credit card from Y but you think the accounts were settled and you don’t owe anything.
The second one is a stronger version if you are sure that you have never dealt with that firm. Only use this if you are absolutely convinced about this.
I suggest that you don’t include your telephone number in this letter – dealing with this sort of thing by mail or email is less stressful.
If you send a letter, 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 some of these, they may jog your memory. Not all the items on the list may be available or relevant.
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 anymore – 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 TransUnion. 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.
Can you get compensation for this?
Possibly, but it will depend on how the creditor responded to your Prove It letter.
You usually won’t get any compensation just for being sent a letter about a debt that wasn’t owed if this is soon resolved. It is seen as part of everyday life that sometimes mistakes are made.
But if the creditor ignores your letter and bombards you with letters or texts or emails, or dismisses your complaint when they haven’t provided any proof the debt was yours, or starts court action, then you may be able to get some compensation.
This example from the Finacial Ombudsman looks at some of the points FOS considers when deciding whether to award compensation.