Energy customers and borrowers hounded by heavy debt collectors for bills they don’t owe
- Concerns over tactics used by debt collectors in cost of living crisis
- A third increase in the number of people contacted on behalf of energy suppliers
- A British Gas rep broke into the house when the owners weren’t even customers
- Bank of England figures show consumer borrowing returning to pre-pandemic levels
Naima Mari paid off a personal loan in January last year, hoping that would be the end of it.
The 34-year-old had borrowed £2,000 from 118,118 Money after being made redundant due to mental health.
But nearly a month after repaying the full amount, Naima started receiving threatening letters and text messages from a debt collector. It emerged that 118 118 Money had sold their details to a third-party agency.
Citizens Advice warns that the number of people contacted by debt collectors on behalf of energy suppliers has risen by a third since last year
The case adds to growing concerns over heavy-handed tactics used by debt collectors amid the cost of living crisis.
Citizens Advice warns that the number of people contacted by these agencies on behalf of energy suppliers has increased by a third since 2021.
Some 26,000 people have been in contact with Citizens Advice so far this year about debt collectors looking for missed utility bills.
And last month it was reported that a British Gas representative with two third-party debt collectors broke into the home of a couple who were not even customers.
The employee picked the lock after confusing the owners with their neighbor, who had not paid his bill.
Naima suffered panic attacks after her experience.
“I had already paid the debt, so they shouldn’t have been after me,” she says. “It was such a stressful time.”
Selling receivables to third parties is a common practice among creditors. Most debt will only be sold if the account holder is in default.
Typically, they will be sold for less than face value, but this means the creditor gets some of the money owed and doesn’t have to waste time and money chasing payments.
The company that buys the debt will then sue the borrower for the full amount, where their profit comes from.
Naima has since received an apology from 118,118 Money for what it describes as an administrative error. It says that due to a synchronization error, the account was not removed from the debt sale file and was sold.
She was offered £100 compensation, but turned it down.
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His case is similar to that of Ian Funnell, 52, who also received notice from a debt collector for a payment he had already made.
Ian, from Tonbridge, Kent, and his wife, Melissa, 47, ordered a package to be delivered by shipping company UPS. On arrival he was charged £50.83 for customs tax, which he paid to the driver in cash.
But a month later, he received a bill from UPS asking for money.
Although he confirmed his previous payment with the company, he received another invoice with an additional charge of £4.
He paid it in order to get rid of the business. But then the couple received a letter from a debt collection company called Controlaccount asking for the money.
Ian explained the situation to the company, which agreed to drop the case. But the stress caused him sleepless nights.
“He’s been so worried about it,” Melissa says. “It makes you wonder if this will affect your credit rating.”
A UPS spokesperson said the company is resolving the issue for the recipient and regrets any inconvenience caused.
For more tips on how to manage debt or to file a complaint about debt collector behavior, visit stepchange.org.