Sending a request letter titled Prove It to your creditors or to the debt collection agency comes in really handy in situations where you are not sure whether you really owe them. But there are some initial actions you need to take from your end(before sending this letter to them) in order to get a good outcome out of it.
Through this comprehensive guide, you will learn the initial actions you need to take essential insights into crafting, sending, and responding to this crucial document. Plus, it delves into the importance of sending this ‘Prove It Debt Letter’ to your creditors.
Let us walk you through this guide…
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This article aims to empower you with the knowledge and confidence needed to manage your financial situation effectively. It will help you in understanding your legal rights to maintaining meticulous records, how to dispute a debt and how to seek professional advice if needed.
Why am I receiving a debt letter?
Surely, you might also get surprised if you receive a debt letter from a debt collection agency (regarding a debt issue) for the first time. There can be mainly 3 instances where your lenders or assigned debt collection agency may contact you.
- Your original creditors have hired a debt collection agency to chase after you to recover their debts on behalf of them.
- Your Original creditor has sold your debt’s ownership to a debt collection agency for a percentage of the total value. Hence, they are now chasing after you to recover the due amounts.
It’s common for individuals with outstanding debts to forget to inform their creditors when they change residences. As a result, you might still be receiving debt letters from a debt collection agency referencing to a debt that is owed by someone else.
You are not bound by law to take any action since the debt letter you received doesn’t impose any legal obligations on you. Plus, the referencing debt won’t impact your credit rating as well. It is because the credit reports are tied to individuals, not addresses.
However, the debt collection agency will keep trying to get in touch with you as they are not aware of their debtor’s home shift. Therefore, it’s in your best interest to inform them that the person in question no longer resides at your address. Additionally, it will help you in avoid facing further inconvenient actions from them.
The most straightforward way to convey this information is by notifying them via sending the following letter:
“
Dear Sir/Madam,
Subject: [Reference]
I acknowledge receipt of your letter dated [date] regarding the mentioned debt.
I relocated to this address on [date], and I can verify that [account holder] has not lived at this address from that point forward. Regrettably, I am unable to provide a forwarding address for [account holder].
If you continue to contact me about this debt you will be committing what amounts to psychological and/or physical harassment.
I kindly request you to update your records accordingly and confirm in writing that there will be no further communication with me concerning this debt.
Yours faithfully,
“
Keep in mind that you are not legally required to provide any evidence that shows the account holder has not been living at your address, even if the debt collection agency is persistently asking for it.
In fact, even if you possess a forwarding address, providing such information to the debt collection agency might expose you to potential risks. Therefore, it would be wise to refrain from providing that information.
There are mainly three common scenarios where you might get the feeling that you don’t owe money.
As we pointed out before, it is really common practice among creditors in the UK to hire a debt collection company to chase after their debtors or sell the ownership of the debts to a debt collection company for a portion of the total value of the debt.
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How to Deal with Debt Letters in the UK
The first letter that comes from a debt collection agency will contain all the information you need to know about why they are after you instead of your original creditor. Plus, they will notify you what will happen if you ignore their requests.
Therefore, Let’s discuss How to Deal with their debt Letters in 4 main steps as if your debts are true:
The first thing you should do is not get panicked just because you received a debt collection notice from a debt collection agency you never knew before.
- Be calm
- Check out all your credit history documents to find out how the debt originated in the first place and with whom.
Having these credit history documents in your hand comes in handy when checking the validity of debt with them.
Your debt becomes unenforceable if it fulfil the following 3 conditions simultaneously due to the Statute-Barred debt excuse.
Most debt types that fulfil all three facts mentioned above are sorted under the statute-barred debt category by the court. This means these types of debts cannot make you responsible for paying by the court. Thus you will not have to pay them.
However, this does not mean it will clear your credit history as well. Therefore, taking this statute-barred opportunity will negatively impact your credit history. As a result, you may find difficulty in getting a new credit card or loan in the future.
However, not all debts become statute-barred. HMRC debts and debts with a County Court Judgment (CCJ) remain enforceable for extended periods.
Let’s talk about what to do If your debts are true and they cannot be sorted under the statute-barred category.
The easiest way to verify your debt is by asking your lenders or creditors to Prove it. In that way, you can verify for sure whether you really owe them or not.
Upon receiving a debt letter notice, It is advisable to send a request letter titled ‘Prove it or Prove the Debt’ to the debt collection company asking to send you provable proof that shows you really owe them. They are bound by law to send you proof. And make sure to keep copies of the request letter as well.
This copy of the request letter will come in handy if things escalate to a court issue without replying to you with proof. You can show these copies as proof to the judge to verify your request and their failure to reply with proof.
Their reply should at least include a copy of the initial agreement you had with your creditor.
On the other hand, you are not required by law to settle a debt with a debt collection agency if they do not reply to you with proof that shows you really owe them. This approach also serves as a useful strategy if you suspect an error in the debt claim.
Based on our experience, many individuals in the UK overlook the importance of debt verification. Failing to request proof could potentially lead to unwarranted payments for a debt that may not have been your responsibility in the first place.
The easiest way to stop having these annoying interactions with debt collectors is by settling the debt and getting done with it.
If paying off the debt is not an option for you, then you need to get in touch with the debt collection agency or the creditor and discuss with them to get acceptance for a payment plan. Keep in mind to discuss with them in a way they get convinced enough about your current financial situation by providing provable proof for them to verify your situation.
They will surely grant you a payment plan. After all, also want to recover their money.
Sometimes, you will find instances where you cannot afford the payment plan suggested by the debt collection agency or your creditor. In those situations, you need to explore other alternative debt solutions in order to solve the debt issue in a manageable way. We have discussed further about those solutions in the later part of this article. Keep reading to find them out.
Get the ‘prove it’ letter as a Template
Please feel free to copy and use the following ‘Prove it’ letter as a template if you find hardship in making a formal letter to verify the debt.
“
Dear Sir/Madam
Re: [Reference]
I refer your letter dated [date] regarding this debt.
I believe that I do not owe the money that you are claiming. You will be aware that the Financial Conduct Authority (FCA) Consumer Credit sourcebook says:
A firm should neither ignore nor disregard a customer’s claim that his debt has been settled and/or is disputed and must stop making demands for payment without providing the customer clear justification and/or evidence as to why the claim is not valid. (7.5.3)
A firm must suspend or cease the steps it or its agent takes in the recovery of a customer’s debt where the customer disputes or has settled the debt on valid grounds or what may be considered valid grounds. (7.14.1)
If a customer disputes the debt on valid grounds or on what may be considered valid grounds, the firm must re-examine the dispute and provide details of the customer’s debt to the customer in a reasonably timely manner. (7.14.3)
If there is a dispute regarding the identity of the borrower or the amount of the debt, it is for the firm (not the customer) to establish, that the customer is indeed the correct person/identity in relation to the debt owed or that the amount is correct under the agreement. (7.14.4)
A collection firm must provide the customer with information regarding the outcome of its investigations about a debt that the customer disputed or has settled on valid grounds. (7.14.5)
If the customer disputes the debt and the firm who seeks to recover the debt is neither the lender nor the owner, the firm is required to:
(1) Pass the information given by the customer to the actual lender or the owner; or
(2) If the firm was given authority by the lender or the owner to investigate the dispute, the firm is required to notify the lender or owner regarding the outcome of the investigation. (7.14.6)
Please either provide evidence that I am liable for this debt or confirm that you will not contact me further regarding the debt.
If you continue chasing me without providing evidence that I am liable for this debt this is deceptive and unfair. It also amounts to what is essentially physical and/or psychological harassment.
If you do not either provide evidence that I am liable for the debt or confirm that you will not be contacting me further, I will complain to Trading Standards and the FCA.
I await your reply.
Yours faithfully
“
Keep in mind, not to Sign this request letter. While many debt collection agencies operate with integrity, it’s essential to be cautious. There’s a risk that your signature could be scanned and used to falsely validate a credit agreement if you sign the letter, falsely asserting your debt.
Furthermore, it’s crucial for them to furnish substantive evidence. Merely stating they’ve conducted an inquiry and are convinced of your indebtedness is insufficient. The evidence they provide should align with the type of proof required in a legal proceeding.
In essence, it’s imperative that any evidence presented by the agency meets the standard they would need in court if legal action were pursued.
Can I Get an Alternative Debt Solution if I’m facing financial difficulties?
There are a number of other alternative debt solutions available in the UK. Sometimes, you may find hardship in agreeing to unaffordable payment plans suggested by your creditor or debt collector. In those situations, it’s better to apply for a debt solution to resolve your debt issue effectively.
But keep in mind you need to fulfil certain unique conditions in each of these debt solutions in order to get acceptance. Choosing the right debt solution will help you in solving your debt issue, while choosing the wrong will make your financial situation worsen.
Therefore, it’s better to take debt advice from a professional debt advisor if you find hardship in selecting a debt solution alone.
Here are some key debt solutions available in the UK:
- You might be eligible to pursue a Minimal Asset Process bankruptcy (MAP) if your income is limited and you lack valuable assets.
- This MAP option is characterised by its swiftness, cost-effectiveness, and simplified process, making it a practical choice worth exploring.
Feel free to fill out our online form by clicking here if you want personal help from our Money Advisor Team based on your current financial standing.
What powers do debt collecting agents have when conducting debt collection operations?
It’s vital to understand that debt collectors in the UK should operate within the confines of legal regulations. And it does not matter whether it’s an energy supplier company or a personal loan company. This means debt collection agencies do not possess any extra-legal powers compared to the original debt owner of your debt.
The only difference you will experience within these two entities is that you have to deal with a debt collection agency instead of your original creditor. Rest all the same. Their collection agents are not enforcement agents(bailiffs). Thus, they do not have the legal authority to enter your home and seize your belongings.
As I mentioned before, all debt collection operations in the UK are authorised and governed by the Financial Conduct Authority (FCA). Thus, they have to act within FCA guidelines when chasing after debtors like you. Below are some of the most important rules you need to know while dealing with debt collectors.
It’s time to lodge a complaint to FCA If you feel and have proof that shows they have broken any of these guidelines.
Can I Make a Complaint Against debt collectors?
Yes. You can make a complaint against the debt collection agents in two ways. But in order to get a better result out of these complaint methods, you need to provide enough proof to show their harassing conduct or unethical practices.
It’s essential to safeguard your rights and take action against any improper conduct. Plus, they may end up paying a fine and compensation to you if proven guilty.
Where can I get free assistance to solve my debt issue in the UK?
Feeling overwhelmed? Don’t fret. There are free debt counselling services that operate inside the UK and can guide you through your debt journey. Below are some of the famous organisations that work to help overcome debt issues for people like you.
It’s essential to seek help early to avoid falling into a debt spiral.
Should Other Debt Collectors Be On Your Radar?
It’s worth noting that other debt collectors also operate in similar ways. Stay informed about your rights and keep a tab on any suspicious activities.
Below are some of the largest debt-collection firms you need to keep an eye out for, as they tend to purchase bad debts in huge amounts.
- PRA Group
- Cabot Financial
- Lowell Financial
Knowledge Is Your Power
Effective debt management is the cornerstone of financial stability. The ‘Prove It Debt Letter’ is more than just a tool; it’s your gateway to financial empowerment. By understanding and utilising this letter, you’re taking a significant step towards challenging and verifying debts.
Always keep in mind it’s not just about managing debts; it’s about equipping yourself with the confidence and competence to question and validate any debt claims made against you.
Key Points
- The ‘Prove It Debt Letter’ is a crucial defence tool for challenging the legitimacy of debt claims.
- Not all debts are valid; collectors can make errors, making it essential to verify debt claims.
- Using the ‘Prove It Debt Letter’ exercises your right to confirm the accuracy of debts attributed to you.
- The letter provides a legal framework to challenge dubious or fraudulent claims.
- Key steps in crafting the letter include gathering information about the debt, using a structured template, and sending the letter via recorded delivery.
- The letter should explicitly request debt validation, cite legal statutes (e.g., FCA rules), and include only necessary personal details.
- Possible outcomes after sending the letter include debt validation by the collector or no response/inadequate proof, which affects their ability to legally enforce the debt.
- Maintain constant records of all communications for potential future disputes or legal proceedings.
- Seek professional advice in complex situations for clarity and direction.
- Debt collectors must adhere to specific contact rules and cannot take legal action without valid grounds.
- Familiarity with FCA guidelines helps in understanding rights and collectors’ obligations.
- Regularly reviewing debts and keeping detailed records aids in identifying discrepancies and managing disputes.
- Consulting with a debt management expert or financial advisor can provide personalised advice and tailored solutions.
- The ‘Prove It Debt Letter’ empowers individuals to challenge and verify debts, which is crucial for managing debts and maintaining financial stability.
- Knowledge and confidence in dealing with debts are key to ensuring financial well-being and stability.
Faqs
A Prove It letter may not be necessary in certain situations, such as:
It’s essential to assess the specific circumstances surrounding your debt situation before deciding whether or not to send a Prove It! letter.
A Prove It letter can be beneficial in various scenarios, including:
Before sending a Prove It letter, carefully assess your specific circumstances and determine if it aligns with the situations mentioned above.
