The OFT’s much delayed review of its debt collection guidance is due to focus in part on the issue of data accuracy, specifically concerns where people are chased for debts on the basis of false or wrong information provided by creditors to debt collection companies.
The Credit Services Association has been lobbying the OFT to act more decisively, through its review, on data quality, tracing and creditors’ responsibilities.
After fears that the regulator might not have considered these concerns in sufficient depth, the CSA persuaded the OFT to take a much more comprehensive review of responsibilities over data quality and seek feedback from major trade bodies. The OFT was previously believed to be conducting only a minor update to its guidance.
Peter Wallwork (pictured), chief executive of the CSA and Debt Buyers & Sellers Group (DBSG), said the OFT’s decision to consult with major stakeholders has been largely achieved through the association’s continued dialogue with the regulator.
Tracing remains one of the toughest challenges for debt collection agencies (DCAs) and an area that generates most complaints.
Wallwork said: "Unless and until the OFT confronts the issue of data accuracy, the businesses at the end of the collections cycle – notably our members – will continue to shoulder the blame for things that go wrong that are invariably beyond their control."
CSA members handle more than 15 million cases annually but not all of the information they receive about debtors is accurate.
The trade body said it is not uncommon for the information to contain an out-of-date address or an incorrect initial. This can result in a mis-trace that invariably means that innocent individuals are caught up in the process.
There is also no agreed mechanism for correcting that data so that if and when it is passed on to another agency, or an agency is pursuing multiple debts, the same mistake is not repeated.
Wallwork added: "Of course, the creditor cannot be held responsible for all data issues but there is still much they can do to help the process. We have actively lobbied for a full review to sort this issue once and for all.
"Why should the collections agency be blamed for the quality of data over which they have no control, and why should debtors be allowed to abscond without leaving their creditors a forwarding address?
"The OFT must tackle the issue the right way around and the association must encourage better data accuracy."
The review of the guidance, first mooted more than 12 months ago, is now not expected before July.
Source: Credit Today