If you believe you’re being treated unfairly by a debt collector, you might be wondering if you can escalate your complaint to an external trade association, like an ombudsman. But is there an ombudsman specifically for debt collectors? And how does the complaints procedure work?
The Financial Ombudsman (FOS) resolves complaints between a consumer and any firm providing financial services, such as a debt collection company, bank, financial advisor, credit card company, or insurance company. It can’t be used to complain about a local council, government department, or public sector service, like HM Revenue & Customs (HMRC).
What is an ombudsman?
If you’re considering complaining to an ombudsman, it can be useful to know exactly what it is. Put simply, an ombudsman is an independent service that exists to investigate and resolve complaints between consumers and organisations within a certain industry. They will always act impartially and review all evidence without taking sides.
An ombudsman service is free to use as a consumer, which means you will never be charged for submitting a complaint or having your complaint investigated. Instead of charging consumers, these types of services are typically funded by the parliament or from a levy on the regulated firms within their jurisdiction.
There are over 50 ombudsmans for different sectors, including health and social care, housing, the police, and financial services. They have the power to make recommendations to apologise, change processes or procedures, or pay compensation for distress and inconvenience.
Remember, not paying a debt isn’t classed as a criminal offence, no matter what a debt collector might tell you.
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Is there an ombudsman for debt collectors?
Being chased for payment of a debt you can’t afford can be daunting enough without the extra stress of being harassed by a debt collector on top of it all. However, you have the right to complain about the way a debt collector is treating you if it is having a negative effect on your mental or physical health and causing you undue distress.
There is no separate ombudsman for debt collectors, but complaints about debt collectors fall under the remit of the Financial Ombudsman Service (FOS). Established by parliament in 2001, the firm is contacted by over one million customers in England, Scotland, and Northern Ireland per year about a wide range of issues, including those relating to loans, insurance, mortgages, pensions, peer-to-peer lending, and debt collection.
However, there are limits to their investigative powers. For example, they can’t look into individual complaints about council tax, income tax, utility bills, or loan sharks as these don’t constitute regulated activities under the Financial Conduct Authority (FCA).
The FCA’s Consumer Credit Sourcebook (CONC) provides further clarification on how businesses authorised on or after April 1, 2014, should treat consumers.
When can I complain to the Financial Ombudsman Service about a debt collection agency?
There are certain situations in which contacting the FOS would be the best course of action for you. However, you can only reach out to the FOS after you have complained directly to the debt recovery company and you’re unsatisfied with their response or they have failed to respond to you within eight weeks.
Remember to send all initial complaints by recorded delivery and keep several copies so you have a record of your complaint and how it was handled.
The complaint must also be in regard to a financial product or service that the company has failed to resolve in a way you deem satisfactory. It must also be submitted no later than six months after receiving a response from the debt collector.
Here are some of the things that you can complain to the FOS about:
- The debt collector is seeking payment from the wrong person
- You’re being threatened with further action (e.g. court action) when you shouldn’t be
- You’re being contacted at unreasonable times
- The amount you’re being asked to pay is incorrect
- You’re being harassed on social networking sites
- The debt is statute barred or otherwise legally unenforceable
- You’ve reported mental health problems and your needs have been ignored
- You’ve not been given a reasonable time to seek advice or propose a payment arrangement
- You’ve been made to feel distressed, humiliated, or pressured
- You’re being harassed by frequent visits, phone calls, or messages
- Your reasonable payment proposal was refused
Remember, a debt collector doesn’t have any special legal powers and can’t do anything your original creditor that you owe money to can’t. They might threaten you with court action, but they’re not allowed to actually take legal action against you.
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How do I contact the Financial Ombudsman Service?
There are certain things you should know before you submit a complaint to the FOS.
As previously mentioned, you must raise a complaint within six months of receiving a response to the complaint about your original credit agreement or eight weeks have passed and you’ve had no response.
There is no need to get someone like a lawyer to represent you, but you can ask someone else to help you with your complaint, such as a friend or family member. The FOS will, however, need a copy of the response letter from the financial firm to help them investigate your case.
The FOS website has a handy ‘complaint checker‘ which will ask you some questions about your circumstances to determine if they can help you, if you’re in a position to make a complaint, and how to kick-start the complaints procedure.
Remember, you’ll never be charged for contacting or submitting a complaint to the FOS.
Which details should I include in my first contact with the Financial Ombudsman Service?
When you contact the FOS, you must include as much information as possible about the reason for your complaint.
The online form will ask for specific information from you, including:
- Your name, address, and contact details
- The name and address of the company you’re complaining about
- The full scope of the complaint (e.g. what went wrong, the financial loss or inconvenience caused, what your desired outcome is, and details of all previous attempts to resolve the issue)
- The final response letter from the company you originally complained to and evidence of a County Court Judgement or default notice if you defaulted on your original agreement
If you have your account number and reference number for your original complaint, providing this information might allow the FOS to investigate your case and provide a response quicker.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
How long does the Financial Ombudsman Service have to investigate a complaint?
The FOS aims to get back to you within 10 days of you submitting your complaint. When they do, they will assign you a case handler to communicate with going forward, ensuring the right person is matched to your case.
The next step is the FOS contacting the company you’re complaining about to investigate whether they behaved fairly. Depending on the nature of the complaint, they will give them anywhere from 15 days to eight weeks to respond. The debt collector should respond directly to you, not the FOS. If you’re not satisfied with their response, you can refer your complaint back to the FOS within six months.
In their investigation, the FOS considers the relevant law and bases their decision on regulatory rules, guidance, and codes of practice. For example, if the debt isn’t yours, the FOS would expect the business to provide evidence proving that they have been seeking repayment from the correct person. They might also ask them to accept a reasonable offer of payment from you to resolve the problem.
To summarise, an FOS investigation typically takes around 90 days from start to finish, but lengths can vary depending on the nature of the complaint.
What can I do if I’m not satisfied with the Financial Ombudsman Service?
The FOS is committed to handling every investigation fairly and objectively, but there’s every chance you still won’t be satisfied with the way your case is handled. If this is the case, you must express your concerns with our case handler.
However, if you’re still unsatisfied, you can escalate your case to the customer complaints department at the FOS. They will conduct a review into the service provided and, in most cases, will provide a response within ten working days.
If you’re not happy with the response from their customer complaints team, you can contact the independent assessor for the FOS. They are an independent service of the FOS, meaning they form their own views and opinions without influence.
It’s important to note that this procedure should only be followed to complain about the service you received from the FOS, not the outcome of your investigation. If you choose not to accept the final decision from the FOS, you are free to pursue other forms of legal action to resolve the issue, such as taking your case to court.
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Conclusion
If you’ve complained about a debt collector but you are unhappy with the response, you might be able to escalate it to the Financial Ombudsman Service (FOS) for a second opinion.
The FOS will investigate the original complaint from both sides and will usually present their findings to you within 90 days. Once a decision has been made, the consumer accepts it, making it legally enforceable, or rejects it, leaving them free to take the case to court.
For further information about your rights during the collection process, don’t hesitate to reach out for free debt advice.
