What happens if I don't pay off a debt collector?

First, the firm must be authorised by the Financial Conduct Authority (FCA) to act as a debt collector.

How do you check if they are authorised, you might be thinking?

We got you covered; you can click here to access the FCA Register and follow the instructions.

There are two reasons why a debt may be passed to a Debt Collector or DCA.

1. The debt has been sold to the debt collector.
2. The debt collector has been employed to collect the debt on behalf of the debt owner.

In the first case, you must have received a debt sale letter from the debt owner stating that the debt has been sold to the debt collector. The letter should be on the debt owner’s letterhead and should clearly state details like:

• The exact amount of debt being sold to the debt collector – make sure you double-check this if you can. Go through any relevant paperwork you have and compare the figures. You can always request a statement from the debt collector to be sure.
• The date the debt was sold.
• The name of the debt collector to whom the debt was sold to.
• Any reference numbers or account numbers relating to the debt

This letter is usually referred to as a ‘Notice of Assignment’; without receiving this letter, you cannot be sure if the Debt Collector has any legal right to ‘demand’ payment from you.

In the second case (debt collector or DCA employed to collect the debt on behalf of the debt owner), just like the first, you should have received a letter again from the debt owner.

This should be on the debt owner’s letterhead and, in this case, must state that the debt has been passed to the named debt collector to collect the debt on behalf of the debt owner. This letter should state:

• The exact amount of debt being passed to the debt collector for collection—again, make sure you double-check this if you can by going through any relevant paperwork you have. As mentioned earlier, you can always request a statement from the debt collector to be sure.
• The name of the debt collector collecting on the debt owner's behalf.
• Any reference numbers or account numbers relating to the debt.

What you shouldn’t do is begin making payments to the debt collector.

This is not strictly because you don’t recognise the debt. Whether you recognise the debt or not is irrelevant. Why? If you pay them and the debt owner hasn’t instructed them, there's no guarantee the debt owner will receive your payments.

Errors do happen, so there is no guarantee that you haven’t received incorrect information. So don’t make assumptions. You need to have received a Notice of Assignment from the debt owner.

What you should do is send a letter or email to the Debt collector requesting confirmation from the debt owner that the debt collector’s claims are indeed correct (a Notice of Assignment). Until the debt collector has provided this, they must not continue to pursue you for the debt. It must be proven that the debt is yours to pay, and the debt collector is authorised to collect on it.

If you recognise the debt and are currently making payments to the debt owner, you can continue doing so until the debt owner contacts you to tell you otherwise.

Once the debt collector provides you with proof in the form of a letter from the debt owner on the debt owner’s letterhead, you can then transfer your payments to the debt collector. This is a clear indication that the debt collector is authorised to collect on the debt.

The Real Debt Guy is a qualified financial adviser and a UK debt expert. The information in this article is considered to be true and correct at the publication date.