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i The advice on this page applies to anyone with personal debts taken out in the UK.

What to do if your debt has been passed to a debt collection agency (DCA)

Debt collectors contact you if you have missed payments or you are getting default notices.

This is a normal stage in the debt collection process.

They act either as:

  • On behalf of your creditors, or
  • For a company that has bought the debt

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What is a DCA?

DCAs specialise in collecting debts that the original creditors could not get paid. There are many DCAs in the UK.

Some are small and only deal with certain types of debt. Others are very large and operate across many countries.

Debt collectors usually work in one of two ways:

1. They are hired by your creditor to contact you

The DCA is often paid a percentage of the money they collect.

They sell the debt at a reduced amount so they get a lump sum of money.

2. Your creditor sells or ‘assigns’ your debt to the DCA

Your contract allows the original creditor to do this after your account defaults.

They do this either because:

  • They want more money back than you can pay, or
  • They do not want to wait to get back what you owe

Creditors sell debt at a lower price for a lump sum of money.

The collection agency becomes the legal owner of your debt. They make their profit by collecting the full amount you owe.

Check where letters from the DCA ask you to send payment.This will tell you if your debt has been sold.

If they say to continue paying the original creditor, the debt is still owned by them.

What can a debt collector do?

DCAs have no special legal powers.

They cannot make changes to your original contract.

They may contact you by:

  • Post
  • Phone
  • Text
  • Email

Letters or phone calls from collection agencies can be worrying.

They may mention court action or sending someone to your home.

They cannot:

  • Lie or mislead you about their legal powers
  • Make an excessive amount of phone calls

They can:

  • Take court action if you do not pay

This is less likely if you tell them you are getting debt advice and want to pay what you can afford.

What should I do if a debt collector contacts me?

Do not ignore letters or calls from a debt collector.

They will take further action if you do not reply.

Some may ask you to pay back the debt in full or large instalments.

You should only offer to pay them what you can realistically afford.

If you have been contacted by a DCA, get in touch with us for free debt help.

We can help you build a budget and work out what you can afford to pay.

Make a complaint if you are not happy with the way a DCA is treating you.

Will debt collectors visit my house?

A DCA can send a ‘doorstop collector’ of ‘field agent’ to your house.

It is not common for debt collectors to visit you at home.

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What proof must a debt collector provide?

If a debt collection agent comes to your home, remember:

  • They must show proof of ID
  • They are not a bailiff (enforcement agent) or a sheriff officer
  • Pretending to be a bailiff or sheriff officer can be a criminal offence
  • You do not have to open the door
  • You do not have to let them in
  • They must leave if you ask them to
  • They cannot take anything from your house

Find out more about the differences between bailiffs and debt collectors.

Should I pay a DCA?

You do not have to give cash to a collection agent who visits you at home.

Call the company to set up a standing order if you can afford payments.

If you do make payments to a collection agent, make sure you:

  • See their ID first
  • Get a receipt
  • Do not pay more than you can afford

I'm in a vulnerable situation - should I let the DCA know?

Both sudden shocks and chronic conditions can make people vulnerable.

Make sure your creditors know if this is you.

Vulnerability can mean:

Your creditors can offer support if they know what your situation is.

Will a DCA add more interest and charges?

Your original creditor may stop interest and charges when your account defaults.

Interest and charges also often stop when a debt is sold to a DCA. But not always.

Sometimes a DCA will continue adding interest and charges as allowed in your original contract.

If the original creditor still owns the debt, they may add more interest and charges too.

I have more than one DCA contacting me about the same debt – which one do I pay?

Only one company should contact you about a debt.

Tell the original creditor that more than one company is contacting you for the same debt.

Be aware:

  • Some DCAs have many trading names. This makes it look like more than one company is contacting you
  • Check the letters you receive. If the return addresses are the same, it is probably the same company
  • You can ask the collection agency to contact you using only one trading name. This can help avoid confusion

A DCA is contacting me about a debt that is not mine

This can happen if a DCA is looking for someone with a similar name to yours.

Read more about being chased for a debt not in your name.

How do I know the DCA is real?

Most debt collection agencies in the UK are:

  • Regulated by the Financial Conduct Authority (FCA)
  • Hold a valid consumer credit licence
  • Are also members of trade bodies such as the Credit Services Association

To find out, you can:

  • Contact the FCA to check if a collection agency is licensed
  • Check the FCA register.
  • Check letters for the logo of a trade body and contact them
  • Ask us. We know all major UK DCAs and can tell you who is real

Can you help with DCAs?

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