"It is one of the glories of this country that every now and then one of its citizens is prepared to take a stand against the big battalions of government or industry." So said Lord Justice Jacob in Ferguson and British Gas Trading Ltd [2009] EWCA Civ 46. In this case, Ms Ferguson changed from British Gas to another supplier in May 2006. She received countless bills and threatening letters for non-existent debt for eight months despite this. Ms Ferguson pursued a civil claim under the Protection from Harassment Act 1997. British Gas tried to argue that customers should not take computer-generated letters as seriously as those addressed individually. The Court of Appeal firmly rejected this, commenting
"…the threats and demands were to be read by a real person, not by a computer. A real person is likely to suffer real anxiety and distress if threatened in the way that Ms Ferguson was. And a real person is unlikely to take comfort from knowing that the claims and threats are unjustified or that they were sent by a computer system: that will not necessarily allay the fear that the threats will not be carried out. How is a consumer such as Ms Ferguson to know whether or not, for instance, a threat such as "we will tell a credit reference agency in the next 10 days that you have not paid" (letter of 2nd January) will not be carried out by the same computer system which sent the unjustified letter and all its predecessor bills and threats? After all, no amount of writing and telephoning had stopped the system so far – at times it must have seemed like a monster machine out of control moving relentlessly forward…"
Ms Feguson won her case and British Gas was ordered to pay its and her legal costs plus an undisclosed settlement.
Unfortunately, the Ferguson case did not end creditor harassment. In April 2024, the Guardian ran a story about the shadowy world of identity tracing, in which creditors recruit unregulated investigators to find people who have moved home without paying their utility bills. Mistakes are common, with people being linked to debts that have nothing to do with them, leaving them at risk of ruined credit ratings and court action.
Although a creditor has the right to reasonably pursue a debt owed to them, they cannot use unethical practices or harass a debtor. It can be challenging to establish when creditor behaviour has crossed the line, so we have created this guide to help you recognise when a creditor is harassing you.
What Counts as Harassment By a Creditor
There are many types of creditor harassment, including:
- Threats and Intimidation – threatening legal action, violence, or intimidation using force is prohibited.
- Constant Contact – repetitive calls, texts, and emails are not permitted.
- Contacting Your Family and Friends – creditors cannot do this and under privacy laws, third parties cannot give out your personal details without permission.
- Using Misleading or False Information – a debt collector cannot say things like "You will go to prison if you do not pay your invoice" or send letters that imitate court documents.
- Contacting You During Anti-Social Hours – it is unacceptable to call you early in the morning or late at night.
- Ignoring You - especially when you say you do not owe any money
Creditors and debt collectors must also consider whether the debtor is elderly or vulnerable when communicating with them.
Debt collectors must also comply with specific legislation when chasing debts, including:
Administration of Justice Act 1970
Section 40 of the Administration of Justice Act 1970 provides that a creditor cannot use debt collection methods that "harass the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation".
Other actions prohibited by section 40 include falsely stating that criminal proceedings will apply if the debt is not paid, falsely representing oneself as an enforcement officer, and sending documents resembling official court documents.
The Protection from Harassment Act 1997
This Act makes it a criminal offence to harass people and make them "fear violence". Victims can also claim damages in the civil court, as was the case in Ferguson v British Gas Trading Company.
What Doesn't Count as Harassment By a Creditor?
The following actions are acceptable debt collection practices:
- Sending reminders and demands for payment
- Telephoning you to ask for payment
- Calling at your home, as long as this is at a reasonable time of the day
- Taking court action
How Do I Know Who Is Harassing Me for a Debt Payment?
Companies, especially large ones, often pass on debt collection to specialist debt collection companies, who also contract out certain processes. Therefore, it can be difficult to pinpoint who is harassing you. This is especially true in the case of identity tracking. As illustrated in the Guardian article on this new phenomenon, in cases where harassment is alleged, parties involved in the debt collecting often simply pass blame onto each other.
The person trying to collect the debt may be:
- The original creditor
- A debt collection agency acting on behalf of your creditor
- A third party who has purchased the debt from your creditor
- Bailiffs in England and Wales or Sheriffs in Scotland
What Can You Do About Harassment By a Creditor?
If you find yourself being harassed by a creditor, contact an experienced Solicitor who can advise and support you. Clients who come to us are often unsure whether what they are experiencing counts as harassment. In addition, they are typically stressed and scared. Having a legal professional by your side removes the worry and will give you confidence that you can protect your interests.
The best actions to take if you are facing creditor harassment include:
1. Collecting Evidence
You need to prove harassment has occurred, so take steps to:
- Record all communications, including the date and time of phone calls, messages, and emails
- Tell the person or company that they are harassing you and that you want them to stop
- If possible, have a witness present when you speak to the creditor or debt collection agency
- Politely refuse entry if the debt collector comes to your property
2. Complaining to Your Creditor
The next step is to formally write to the creditor and tell them you are being harassed and you want this to stop. Point out that harassment is a criminal offence, and you will take further action if the unwanted behaviour does not cease. Send all communications by recorded delivery and keep a copy for your records.
Once they receive your complaint, the creditor has three days to respond. They must also report the complaint to the Financial Conduct Authority (FCA).
3. Complaining to a Professional Body
If you do not receive a satisfactory response from the creditor or they ignore your letter, you can direct a complaint to a professional body. Find out if the creditor belongs to a professional body and, if so, the code of practice they must abide by.
If the creditor is a bank, building society, or credit card company, they may belong to the Standards of Lending Practice, which sets out members' standards of conduct, including:
- Not harassing or putting unreasonable pressure on debtors
- Explaining where people can get debt advice
- Providing support to vulnerable debtors
- Use trustworthy debt collection agencies who also follow the Standards of Lending Practice if the debt is passed on or sold
The best step is to use the complaints procedure to express your concerns to the bank, building society, or credit card company. If you cannot get the harassment to cease, you can complain to the Financial Ombudsman Service.
4. Complaining About a Solicitor Acting for a Creditor
If the person harassing you is a solicitor acting as a creditor, you can direct your complaint to the Solicitors Regulation Authority (SRA) (England and Wales) or the Scottish Legal Complaints Commission (SLCC).
5. Complaining to the Citizens Advice Consumer Service
The Citizens Advice Consumer Service can assist you if your complaint is against a local business by putting you in touch with your region's Trading Standards Office.
6. Complaining to the Financial Conduct Authority (FCA)
The FCA regulates financial institutions and has a handbook that sets out the rules and regulations governing such institutions, including debt collection practices. For example, the handbook states that when dealing with customers in default or arrears, they must treat those customers fairly.
Although it cannot take up your case, the FCA can refuse or revoke the firm's authorisation and issue penalties, including fines.
What If a Firm is an Illegal Money Lender?
Any business lending money to customers must be registered with the FCA. If you have borrowed money from an unregistered lender, commonly known as a loan shark, you will be subject to an extortionate interest rate, and threats and intimidation may be used to get you to pay back your debt.
You do not have to pay money back to a loan shark as they are breaking the law by lending to you in the first place. You can report a loan shark here.
If you are in financial difficulties and facing insolvency, we can offer you clear, practical legal advice on how to navigate the law relating to debt recovery and comply with your legal obligations. Contact us on 0330 173 6983 or send us an email for more information.
