When bank debt collection departments, their agents and solicitors systematically overstep the mark


 
Our work involves, for the most part, developing a relationship with finance institutions, and other organisations that pursue personal guarantees, in addition to debt collection departments, collection agents and solicitors to achieve a settlement that is affordable or reflects any weakness in the claim.

The ability to work with these parties can be dependent on how each department and case manager approaches the process; over many years of experience we have seen countless variations in their approaches.

However, one of the biggest concerns is when an organisation or department systematically oversteps the mark to flout the rules they are regulated by.

Fortunately we have only had issues such as this a handful of times, in over 8 years, but it is a recurring issue that arises from time to time.

Where we identify such issues we bring them to the attention of the organisations involved but, if we get to a position where we have 20 cases and the organisation has not addressed the issue, we refer the matter to senior management in the organisation and, if necessary, to their respective regulatory bodies and, in the case of solicitors and debt collection agents, to their clients.

The (few) issues we have had to deal with so far in this regard:-
 

  • Solicitors, acting on behalf of banks, refusing offers without referring to their client and taking disproportionate court action.


We have only had 2 incidents in 8 years with different solicitor firms and in both cases the banks discontinued giving work to those firms. The good news with these is that we are able to identify this behaviour early on and consequently do not have to wait for the 20 cases to report the matter.
 

  • Ineffective debt collection communication and approval systems.


Most banks, and many debt collection departments, have had particular issues with this at some time over the years but two continue to do so. However, their ineffectiveness often results in causing more problems for them rather than our clients.
 

  • Systematic flouting of court and regulatory rules.


This has occurred only twice in 8 years but on a major scale.

One bank debt collection department's abuse was so systematic that the head of department actually responded to complaints levelled at him and his team personally rather than refer them onto the bank's formal complaint process and you can guess what the outcome of those complaints were!
After reporting the matter to a senior manager within the bank the head of that department was removed within a month and three years later that team is still tough but they do play by the rules.

The second example is in process as we write this article and relates to a debt collection agency (acting on behalf of a bank) who’s computerised debt collection systems appear to be geared to instigating court action at the earliest opportunity.

They could be in particular trouble because their bank client is almost unique in being threatened with the removal of their consumer credit licence if they did not alter their debt collection practices; banks have a duty of care to ensure that such agents acting on their behalf are compliant.
We are at a point of bringing this particular issue to a head because we know, in all of these instances, that if we can pick up these systematic abuses then they will be widespread across all that organisation's debt collection activities and not just with our cases.

28 October By Mel Loades

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