Energy customers and borrowers are hounded by heavy debt collection companies for bills they don’t owe
- Concerns about the tactics used by debt collectors in the cost of living crisis
- The number of people contacted on behalf of energy suppliers rose by a third
- A British Gas representative broke into the house when neither the owners nor even customers were present
- Bank of England figures show consumer borrowing has returned to pre-pandemic levels
Naima Merhi 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 she signed on to work due to her mental health.
But about a month after paying the full amount, Naima began receiving threatening messages and text messages from a debt collector. It turns out that 118 118 Money sold its details to an outside agency.
Citizens advice warns the number of people contacted by debt collectors on behalf of energy suppliers has increased by a third since last year
The case adds to growing concerns about the ruthless tactics used by debt collectors amid the cost of living crisis.
Citizens Advice warns that the number of people being contacted by these agencies on behalf of energy suppliers has increased by a third since 2021.
About 26,000 people have been in touch with Citizens Advice so far this year about debt collectors chasing lost utility bills.
And last month it was reported that a British Gas representative with two outside debt collectors broke into the home of a couple who weren’t even customers.
The clerk picked the lock after mistaking the homeowners for their neighbors who hadn’t paid his bill.
Naima suffered from panic attacks after her experience.
“I already paid the debt, so they shouldn’t have been after me,” she says. “It was a difficult time.”
Selling debts to third parties is a common practice among creditors. Most debts will only be sold if the account holder defaults.
Usually, they will sell for less than face value, but this means the creditor gets some of the money owed and doesn’t have to spend time and money chasing down payments.
The company that buys the debt will then pursue the borrower for the full amount, which is where his profit comes from.
Naima has since received an apology from 118 118 Money for what she described as an administrative error. It says that due to a timing error, the account was not removed from the debt sale file and was sold.
She was offered £100 compensation, which she refused.
Shrinking budgets: Charities warn of a looming debt crisis as many people now rely on credit to cover essential expenditures such as food.
Her case is similar to that of 52-year-old Ian Funnell, who also received a notice from a debt collector for a payment he had already made.
Ian, from Tonbridge, Kent, and his wife Melissa, 47, were ordered to have a package delivered by shipping company UPS. On her 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 demanding money.
Although his previous payment had been confirmed with the company, he received another bill for an extra charge of £4.
He pushed her in an attempt to get the company off his back. But then the couple received a letter from a debt collection company called Controlaccount demanding the money.
Ian explained the situation to the company, who agreed to drop the case. But stress caused him to stay up at night.
“He was very worried about it,” says Melissa. “It makes you wonder if it will affect your credit rating.”
A UPS spokesperson says the company is working to resolve the issue for the recipient, and regrets any inconvenience caused.
For more tips on how to manage debt or file a complaint about how a debt collector should act, visit stepchange.org.