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The Credit Services Association (CSA)
Blog: Daily Mail article response: Abuse of CCJs? Litigation is a last resort in debt recovery
Peter Wallwork is CEO of the Credit Services Association (CSA), the UK trade body for the debt collection sector.
Last week (12 September 2016), the Daily Mail ran an article entitled ‘Lives ruined for the sake of a penny’. It was about an investigation into the use and possible abuse of County Court Judgements (CCJs) in which some of our debt collection agency members were mentioned.
As we detailed in our proactive response to the journalist’s enquiries during the investigation, we are unaware of any incidents and wholly reject the suggestion that any of our members would intentionally have a judgment passed without a customer’s knowledge.
Litigation is a legitimate method of debt recovery typically used when the customer has failed to engage with often numerous attempts at establishing a dialogue. What is essential in deciding to use the courts is whether the action is proportionate, appropriate, and in accordance with the principles of fair treatment, as determined by the Financial Conduct Authority (FCA) through which many CSA members are authorised and scrutinised.
All cases for litigation are carefully considered and assessed – including an assessment of any known vulnerability (e.g. illness) – before legal action is taken. This includes verification of the correct address for the customer, and is always preceded by further attempts to contact the customer, including a letter before action. There is no point in pursuing a customer through the courts when there is no reasonable chance of the judgment being enforceable; it is not in the members’ or their clients’ interests to do so.
Our members' first priority is to promote engagement with the customer and come to an affordable payment arrangement. Litigation is only commenced where this engagement cannot be achieved and CSA members go to great lengths to ensure account details are correct.
We have already spoken to our contacts at the Financial Conduct Authority (FCA) - and will be engaging with the politicians quoted in the Daily Mail piece - to assure them that our industry remains committed to supporting customers in managing their debt. We also believe that customers should help themselves by always informing their creditors of any change of address, and in taking advantage of any one of a number of new free credit score services to ensure that if an issue does occur, it can be swiftly identified and put right. Greater access to data and not less is what is required.
In the meantime, our advice is to urge anyone who believes they have not been treated fairly to contact the creditor in the first instance or whoever is collecting the debt. If not satisfied with the outcome, we would encourage them to contact the CSA, the appropriate regulator, or consumer advice body. See the help and guidance section of this website for more info: http://www.csa-uk.com/consumer/help-and-advice/