Debt Recovery Guru - Debt Collection India Portal, Latest Indian Credit Industry News , Jobs, Events, Directory

Feb 18th
Text size
  • Increase font size
  • Default font size
  • Decrease font size
Home Legal


New OFT guide could become charter for debt avoidance

The OFT should highlight the obligations of consumers, as well as collectors, and not allow its new Guidance on debt collection to be used as a reference guide for debt avoidance.

The warning, from the Credit Services Association (CSA), follows concerns expressed by its Members that whilst it is correct for the industry and the OFT to work closely together in ensuring best practice – especially since it was the CSA that called for a review in the first place – the information and issues being raised were in a public document that could be used for nefarious means: 

“It is important that there is a statement from the OFT that clearly says how the Guidance is intended to be used, and how it is emphatically not a document for consumers and third party representatives to use as a debt avoidance tool,” says Claire Aynsley, Head of Membership, Compliance and Educational Services for the CSA and its sister body, the Debt Buyers and Sellers Group (DBSG).

“It is important also that everyone should work within the spirit of the Guidance, and it would be most helpful for that point to be stated clearly from the outset.”

In a 40-page response to the consultation, the CSA also expresses specific concerns over the need for tracing agencies to hold a consumer credit license (CCL): “The draft includes ‘tracing’ as a debt collection activity that therefore requires the tracing agent to hold the appropriate license and prove their competence according to current legislation,” Claire explains. 

“But this simply won’t work. The majority of tracing agents undertake no collection activities; no payments are received or negotiated, and as such how are they intended to prove their competence for an activity they do not do?”

The CSA also believes that specific mention should be made in the Guidance to the obligations of Credit Reference Agencies (CRAs) in terms of data accuracy: “We appreciate that CRAs are not responsible for the data which is uploaded to their systems,” Claire continues. 

“They should, however, have a responsibility for ensuring that the data then forwarded to a third party has undergone some form of ‘cleanse’ before supplying. This is crucial to avoiding ‘mis-trace’ issues further down the line, especially when a debt has been sold. It is not enough simply to state that some information supplied may not be accurate. That does not seem to be in the spirit of the new proposals.”

Members of the CSA account for more than 90 percent of the UK debt collection industry and are instructed to collect up to £20 billion each year. Its Members are also obliged to undertake more than 15 million ‘traces’ each year as a result of debtors who have ‘gone-away’.


New MFI Bill likely to make RBI the single regulator for the sector

The central government bill on microfinance companies is likely to make RBI the single regulator for the sector.

This new bill is quite a divergent from the old bill. The ...

RBI Operationalises Central Registry to prevent property loan frauds

The Reserve Bank of India (RBI) announced the operationalisation of a central registry that will have details of all properties against which loans have been taken.

SKS Microfinance Ltd filed a special leave petition in SC against MFI Act

Fearing massive defaults due to poor micro loan recoveries, city-based SKS Microfinance Ltd, the country’s largest Micro Finance Institution (MFI), on Thursday filed a sp...

Futile Central Registry Rules impose a heavy burden on banks

The SARFARESI Act does not fulfill the purpose of registration of security interests. For, the Central Registry does not guarantee reliability. Therefore, the law as it s...

Home Loans Frauds will be Checked by Central Registry

Reserve Bank of India has announced the operationalization of a central database that will contain details of all property against which loans have been advanced.

The Cent...

Banks’ profits to go up on RBI relaxing provisioning norms

The Reserve Bank’s recent decision to relax provisioning requirement for banks will improve the profitability of lenders in the short run, bank officials have said.


Cellphone users’ billing under scanner

Customers who default on their payment to cellphone companies will find it increasingly difficult to cheat other companies in the near future.

The Credit Information Burea...

Lawsuits Against ARM Firms Increased In Second Half of March

The number of lawsuits filed by consumers and their attorneys against ARM firms increased in the second half of March when compared to the first two weeks of the month.

Page 5 of 8


Advertise on Debt Recovery Guru. Check out options by clicking here!


Advertise on Debt Recovery Guru. Check out options by clicking here!


Follow DRG



How is the Debt Recovery Industry's Reputation in India?