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The debt collection process

Covid-19 - Member Information

It is important to note that a priority for debt collection and debt purchase companies is to find the right solution for everyone. Our members deal with over six million households in the UK on a daily basis so they are in an ideal position to help.

The following is a simplified guide to the debt collection process.


The debt collection process - a simple guide

When an individual has an outstanding balance on such things as loans, store cards or bills, a debt collection agency (DCA) may be used by a creditor (a bank, a utility company, a phone company) to attempt to find a solution. There may also be cases where a debt is sold by the creditor to another company called a debt purchase company. When this happens, the same process applies, the debt purchase company will get in touch with the customer to try and set up a repayment plan – you can find out a bit more about that process below.



The first step may be that you are contacted by a DCA or debt purchase company in writing, where they introduce themselves and encourage prompt contact with the aim of setting up an affordable repayment plan.



Attempts may also be made by the DCA or debt purchase company to contact you by phone with the aim of discussing the situation.



Please do not be alarmed if you believe that the debt does not belong to you - just explain this to the advisor on the phone or in writing. It may also help to take the advisor's name for future reference.



What is important is that you do not ignore the attempts of communication. You can always seek free and independent advice regarding your circumstances – the details of a number of organisations can be found in our Help with your Finances section. Help and support are always available so it is important you know where you can find it. By contacting the DCA or debt purchase company and discussing your situation you are taking the right first steps to resolving the situation. 



Through these steps the DCA or debt purchase company is often able to assist you with repaying your debt, or, if you have been involved in a mis-trace (you are not the person the DCA or debt purchase company are trying to contact), the company will update the records on their database and stop contacting you.


The debt purchase process

If a creditor (a bank, utility company or phone company for example) sells a customer's account to a debt purchase company, the first communication you can expect to receive is a letter from the debt purchase company letting you know that they are now responsible for your account and what that means. This letter is commonly known as a ‘notice of assignment’.

When they buy an account, the debt purchasing company is then entitled to repayment of the full, original outstanding balance. However, it also means that they have to take over some responsibilities. 

For example, if the bank/utility company/phone company was reporting information about a customer's account to the Credit Reference Agencies (CRAs), the debt purchasing company will now be responsible for that. If you regularly check your credit file, this means that you might see a change in your file because the debt purchasing company will be the one reporting information about the account. Each of the Credit Reference Agencies can tell you more about your credit file and they can help you if you think something is incorrect. All Credit Reference Agencies are listed in our Help with your Finances section.

The debt purchase company would also be responsible for providing you with information about your account, if you need it. However, they might need to speak to the original bank/utility company/phone company for this information, depending on what it is, so it is worth being aware that this may take some time. 

Following a 'notice of assignment', the debt purchase company may begin to make contact with you in writing or by telephone to discuss repayment of the outstanding balance. Alternatively, they might ask a DCA to act on their behalf. 

When it comes to contacting you to discuss your account, whether it is the debt purchasing company or a DCA, you can expect a similar process to the one outlined above. You should not be afraid to ask questions or highlight issues – DCAs and debt purchasing companies are not going to penalise you for wanting to know more.

Credit Services Association,
2 Esh Plaza, Sir Bobby Robson Way,
Great Park, Newcastle upon Tyne,
NE13 9BA Map

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T: 0191 217 0775


Credit Services Association Limited 
Registered in England and Wales No. 00089614

CSA (Services) Ltd
Registered in England and Wales No. 05055685

Registered address:
2 Esh Plaza, Sir Bobby Robson Way, Great Park, Newcastle upon Tyne, NE13 9BA