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

First, most firms that collect consumer credit debts must either be authorised by the Financial Conduct Authority (FCA) or act as an appointed representative of an authorised firm. This is not just a box‑ticking exercise – it is a legal requirement for regulated debt‑collection activity.

You might be wondering how to check if they are authorised.

We’ve got you covered. You can check the FCA Register and follow the steps. The register will show whether they’re legitimately authorised to collect debts.

Why does this matter? If a company is carrying out regulated debt‑collection work without the necessary FCA authorisation, it may have no legal right to do so. If you cannot find a firm on the FCA Register but it claims it can recover consumer credit debts from you, do not make any payments and consider reporting it to the FCA.

There are two main reasons why a debt might be transferred to a debt collector or DCA:

1. The debt has been sold to the debt collector (they now own your debt).
2. The debt collector has been employed to recover the debt on behalf of the debt owner (they're acting as an agent).

Understanding which situation applies to you is important because it determines who legally owns your debt and whom you should be paying.

When Your Debt Has Been Sold to a Collector

In the first case, you must have received a debt sale letter from the original debt owner stating that the debt has been sold to the debt collector. This is commonly known as a 'Notice of Assignment'.

Under Section 136 of the Law of Property Act 1925, this notice needs to be given in writing. There's no strict formatting rule, as long as the main information is clearly communicated. Make sure the letter is on the debt owner's letterhead and includes details such as:

• The exact amount of debt being sold to the debt collector – review all relevant paperwork and compare the figures. You can also request a detailed statement from the debt collector for confirmation.
• The date the debt was sold — this establishes when ownership transferred.
• The name of the debt collector to whom the debt was sold.
• Any reference numbers or account numbers related to the debt, so you can track it properly.

Until you receive a letter from your original creditor, you cannot be certain whether the debt collector has the legal authority to demand payment. The notice doesn't need to include the exact phrase "Notice of Assignment," but it must clearly indicate that the debt has been transferred to the new owner and is now payable to them.

Many people don't realise this: debt collectors may send letters claiming you owe money, but unless you have written confirmation from your original creditor that the debt has been transferred, you should not make payments to the collector until you have received proper confirmation of their authority.​

When a Debt Collector Is Acting as an Agent

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 from the debt owner, not the collector.

This should be on the debt owner's letterhead and must state that the debt has been transferred to the named debt collector to recover on behalf of the debt owner. This letter should include:

• The exact amount of debt being handed over to the debt collector for collection – again, ensure you double-check this if possible by reviewing any relevant paperwork you have. As mentioned earlier, you can always request a statement from the debt collector to be certain.
• The name of the debt collector acting on behalf of the debt owner.
• Any reference numbers or account numbers associated with the debt
• Confirmation that ownership remains unchanged – the original creditor still owns the debt; the collector is merely acting on their behalf.

This distinction is important because if the debt hasn't been sold, the original creditor still owns it and could potentially work directly with you if the collection agency's method isn't effective.

This is where many people make a costly mistake. Let's be clear about what you should and shouldn't do.

What You Shouldn't Do

Do not start making payments to the debt collector – even if you recognise the debt.

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

Consider this: if a company contacts you claiming they're entitled to collect money on someone else's behalf, but that "someone else" hasn't informed you about it, how do you know your payment will be correctly credited to your account? You don't.

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

What You Should Do Instead

Send a formal letter or email to the debt collector asking for confirmation from the debt owner that the collector's claims are accurate, and that a proper Notice of Assignment has been provided.

Your communication should:

• Be sent in writing (letter or email) to establish a paper trail.
• Clearly state that you're requesting proof of their authority to collect.
• Ask for a Notice of Assignment from the original creditor.
• Specify your preferred method and timing of contact.
• Mention that you're aware of the FCA Consumer Credit sourcebook (CONC) requirements.

If you raise a genuine dispute and ask for proof, the debt collector must investigate and provide clear information about the debt. While they are doing this, FCA rules say they should not keep demanding payment without justification or evidence. If they continue chasing you aggressively without addressing your dispute, you can treat this as unfair behaviour and make a formal complaint.

You are entitled to see evidence that the debt is yours and that the firm contacting you is properly authorised or instructed to collect it before you agree to pay.

If You're Currently Making Payments

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

Don't allow a debt collector to pressure you into changing your payments to them without proper authorisation from your original creditor. Remember, you're in control of the situation.​

Once you receive proof from the debt collector in the form of a letter on the debt owner's letterhead, you can proceed to make your payments to the debt collector. This confirms that the debt collector is authorised to collect the debt, ensuring your payments are correctly credited.​

Knowledge is power when dealing with debt collectors. Under UK law, you have strong protections that many people are unaware of.

You Have the Right to Dispute Debts

If you believe a debt isn't yours, the amount is incorrect, or you've already settled it, you have every right to dispute it. The Financial Ombudsman Service has handled cases where consumers successfully challenged debts because:

• Payments had not been properly recorded.
• Interest or charges were applied incorrectly​.
• Settlement figures previously agreed upon were not honoured.
• The collector couldn't prove they had the authority to collect.

Protection Against Harassment

The UK has no fixed limit on how many times a debt collector can contact you in a day, but FCA rules and UK consumer protection law are clear that contact must not be excessive or amount to harassment.​

If you find the number of calls or letters distressing or excessive, you can report this to the Financial Conduct Authority. Debt advice charities typically consider one call per week acceptable, but daily calls are clearly inappropriate.

The FCA's Consumer Credit Sourcebook (CONC) specifically prohibits debt collectors from:​

• Contacting you at unreasonable hours (usually before 8am or after 9pm).
• Using threatening, aggressive, or deceptive language​.
• Pressuring you to pay amounts you cannot afford.
• Discussing your debt with family, friends, or colleagues without your consent​.
• Continuing to pursue you after you've disputed 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.