A shocking case recently highlighted how easily things can go wrong when debt collectors target the wrong person. Camelia Gonciulea, the owner of Twisty Pretzel bakery, was mistakenly chased for a staggering £24,000 in unpaid bills. Despite the error, she was told to pay £18,000 for an energy bill, with an additional £6,000 in interest. The situation unfolded after she discovered that, just months into opening her business in Bearwood, her electricity had been unlawfully abstracted by criminals operating a cannabis farm next door. While the police shut down the illegal operation, Ms Gonciulea was left to fight an unjust demand that threatened to derail her dream.
Energy company, Unicorn has now instructed debt collectors to cease all recovery actions.
If you ever find yourself in a similar position, being pursued for a debt that is not yours, it’s essential to understand your rights and take immediate steps to resolve the issue. This article will guide you through the process of handling such a situation, ensuring you can protect yourself and avoid unnecessary stress.
When you receive a letter or a phone call from a debt collection agency demanding payment for a debt, it can be incredibly stressful—especially if the debt they’re chasing isn’t even yours. Whether it’s a case of mistaken identity, a mix-up in paperwork, or something more worrying like identity theft, being pursued for money you don’t owe is deeply unsettling. It can leave you wondering where to start and what steps to take to ensure the matter is resolved quickly and correctly.
Understanding your rights and knowing the appropriate actions to take can make a significant difference in how the situation unfolds. This article will guide you through what to do if you find yourself being chased by a debt collection agency for a debt that is not yours, providing clear, practical advice on handling the situation.
1. Do Not Ignore the Issue
First and foremost, it is important not to ignore the communications you receive from the debt collection agency. Failing to respond could result in further action being taken, such as a court claim or damage to your credit score. Ignoring the problem won’t make it go away, and in some cases, it could make it worse. Even if the debt is not yours, the agency might assume you are responsible if you don’t challenge their claim.
Instead, respond promptly to any letters, emails, or phone calls. Acknowledge the contact and clearly state that you do not recognise the debt they are referring to. This initial response can be vital in ensuring that the issue is flagged early, preventing the situation from escalating.
2. Verify the Debt
It is essential to check whether the debt is genuinely not yours before taking further action. Sometimes, a debt might be linked to an old, forgotten account or something that belongs to someone else in your household. Requesting verification of the debt from the collection agency is your legal right. Under UK law, debt collection agencies must provide you with clear details about the debt they are pursuing, including:
- The amount owed
- The original creditor
- How the debt has been calculated
- Evidence that links you to the debt
Request this information in writing and wait for their response before taking any further steps. This will give you an opportunity to confirm that the debt truly isn’t yours or highlight where the confusion might have come from.
3. Dispute the Debt in Writing
Once you have confirmed that the debt does not belong to you, the next step is to formally dispute it. Send a written letter or email to the debt collection agency explaining why you believe the debt is not yours. In this letter, you should:
- State clearly that the debt does not belong to you
- Provide any evidence that supports your claim, such as proof of identity theft or documents showing you have no connection to the original creditor
- Request that the debt collection agency stops pursuing you for the debt and removes any incorrect records from their files
It is crucial to keep a copy of this letter or email for your own records, as it may be needed later if the matter is not resolved promptly. If possible, send the letter by recorded delivery so you have proof that it was received.
4. Report Identity Theft (If Applicable)
If you believe that you are being chased for a debt because someone has stolen your identity, it is important to take immediate action. Identity theft can have far-reaching consequences beyond a single debt, and acting quickly can limit the damage. Steps you should take include:
- Reporting the identity theft to Action Fraud, the UK’s national fraud and cybercrime reporting centre
- Contacting your bank or credit card company if any of your accounts may have been compromised
- Placing a notice of correction on your credit file with credit reference agencies like Experian, Equifax, and TransUnion
By reporting the identity theft, you not only protect yourself from further financial harm but also create a formal record of the issue, which can be used when disputing the debt with the collection agency.
5. Check Your Credit Report
While dealing with a debt collection agency, it’s a good idea to check your credit report for any signs of incorrect entries or fraudulent activity. Errors on your credit file could lead to you being unfairly chased for debts, so keeping an eye on it is crucial. If you spot any inaccuracies, such as debts you don’t recognise or accounts that you didn’t open, you should immediately report these to the relevant credit reference agency and have them corrected.
Monitoring your credit report can also help ensure that the debt collection agency is not reporting false information to the credit agencies, which could impact your credit rating.
6. Seek Advice from a Legal Professional
If the debt collection agency continues to chase you despite your dispute, or if you feel that you are being unfairly harassed, it may be time to seek professional legal advice. A solicitor who specialises in debt recovery can help you understand your rights and provide guidance on how to deal with the agency. They can also help you take legal action if necessary, such as making a formal complaint or seeking compensation if the debt collection agency has acted unlawfully.
7. Make a Complaint
If the debt collection agency fails to handle your dispute appropriately or continues to chase you for a debt that isn’t yours, you have the right to make a formal complaint. All debt collection agencies in the UK must follow the guidelines set out by the Financial Conduct Authority (FCA). If an agency is found to be in breach of these rules, they can face penalties.
You can initially complain directly to the debt collection agency. If they do not resolve the matter to your satisfaction, you can escalate your complaint to the Financial Ombudsman Service. The Ombudsman can investigate the matter independently and has the power to order the debt collection agency to correct their actions or pay you compensation if appropriate.
Take Court Action (as a Last Resort)
If all else fails and the debt collection agency continues to pursue you for a debt that is not yours, you may need to consider legal action. Taking the agency to court can force them to stop their pursuit and may result in compensation for any harm caused. However, this should only be considered as a last resort, as court proceedings can be time-consuming and costly.
Before taking legal action, consult with a solicitor who specialises in debt law. They can assess your situation and advise on whether court action is necessary and what the potential outcomes might be.
Final Thoughts
Being chased for a debt that isn’t yours can be incredibly frustrating and stressful, but you don’t have to face it alone. By understanding your rights, following the proper steps, and seeking help when necessary, you can resolve the situation and protect yourself from further harm. Remember, staying calm and taking a proactive approach is the best way to ensure that the issue is dealt with quickly and effectively. If you are ever in doubt, don’t hesitate to seek legal advice to ensure your rights are protected.
