Have you ever heard of statute barred debt before? I hadn’t until last week when the hubby and I had a couple of teeny setbacks in terms of our debt. Our setbacks weren’t related to any unexpected bills or anything like that, it’s just that we’ve been feeling rather unsettled about certain issues that have cropped up.
I’ll explain the full story in a couple of posts I think otherwise this one will end up too long! So part 2 will be published next week because for now, I’d like to tell you about a scary letter I received a week ago.
Actually the letter wasn’t exactly that scary, more like the phone call that followed it.
Here’s what happened…
I opened a letter addressed to me in my unmarried name at the address where I’m living now. Here’s an extract from the letter:
RESPONSE REQUIRED
We need to contact the above named person regarding an important personal matter and we have been provided with your address. If you are the above named person, please contact our office on (xxxxxx), if you are not the named individual, please contact us immediately so we can update our records.
Was I suspicious? Yeah, but curiosity got the better of me.
My first thought was that this was from a company trying to sell me a product and from the name of the company, I knew it was to do with credit. So I thought it was a payday loan company or something similar.
Despite the uneasy feeling I was starting to get, I phoned the 0844 number that was on the letter (charged at a high rate of course). The person on the end of the phone asked me to confirm some details which I tried to avoid but basically they had my mum’s address where I lived many years ago so I ended up confirming who I was without telling them my date of birth. At this point I was thinking that I was going to somehow get my details ‘cloned’ over the phone by a fraudster.
Once we’d got this out of the way, this person told me that I was being chased for a debt of just over £400 from 2003 to some catalogue company! It was such a shock and I honestly don’t remember having any credit with the company they mentioned! My credit file is actually very good despite the amount of debt I’ve had over the years because I’ve never defaulted on any payments. Looking at the file, I can’t see anything in my credit history to say that I’ve defaulted with a creditor. I told the person on the other end of the phone that I didn’t know anything about this debt and they replied that they will be contacting the creditor for a copy of ‘my agreement’.
When I came off the phone, I felt utterly sick and mortified. I racked my brains to see if I could extract any recollection of this debt that this company is claiming that I owe from over 10 years ago. And I can’t! Could I have forgotten about it? Surely not! I did have a catalogue before then back in 1998 (showing my age now), but it was a from a different creditor.
I don’t think I even lived at my mum’s address back in 2003 as the hubby and I bought our first house together that year and before that we rented a flat for quite some time. I wondered why wasn’t I contacted about this before if indeed this creditor believed I owed them money? I was only sure of one thing – I did not have £400 to give to this debt collection agency.
Then I found out about Statute Barred Debt legislation
Luckily for me, my blogger buddy Rob from Debt Advice Blog is pretty much an expert on anything to do with debt and so I sent him a rather panicky email straightaway asking for help! He was able to provide some sound advice on how to tackle the situation. Thanks Rob! I also posted my little problem on a forum on Money Saving Expert and received lots of replies back from other people in similar situations. In a nutshell, I was advised that:
- The creditor might not be certain that it’s me they’re after but have decided to try it on anyway. The fact that this debt collection agency didn’t have my agreement to hand highlights that this might be the case.
- Given that the debt is over six years old means that it’s classed as ‘statute barred debt’ as long as no contact has been made during that time where I’ve acknowledged the debt or made a payment. ‘Statute barred debt‘ is a piece of UK legislation and means that although a creditor can ask you to repay an old debt they can’t legally enforce payment i.e. take you to court, because of the length of time allowed to elapse without any contact from them.
- If I’m contacted again, I’m to send a standard ‘statute barred debt’ letter to the debt collection agency. This will outline the fact that I have no knowledge of the debt and unless they can prove that a payment has been made on this debt by myself in the last six years, I will need to remind them of their obligations to comply with debt laws specifically ‘statute barred‘. Otherwise I’m within my rights to make a complaint about the creditor to the Office of Fair Trading.
For anyone else in this situation, you can find a factsheet on Liability for Debts and the Limitation Act on the National Debtline website (for England and Wales). The factsheet explains the legislation surrounding old debts and has a ‘statute barred‘ sample letter template attached!
Phew! I’m not in the clear yet but I feel a lot better thanks to such fabulous experts on these matters. If you ever get into a pickle financially, it’s well worth a look on Rob’s blog as he has a wealth of information on there relating to debt and Money Saving Expert is also a great resource website.
This experience made me wonder how many other people have been (or are being) wrongly accused of old debts or are being chased unfairly like this?
Have you ever been chased by a debt collection agency? How did you deal with it?
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Editor’s note: I thought I would add a quick update about this – as of January 2014, I haven’t been contacted again by the debt collection agency and there has been no magical copy of any agreement through the post. Just goes to show that debt collection agencies do try it on!!
On another note, you might want to check out Keep Calm and Carry On! Part 2 whilst you’re here. 🙂
You can also subscribe to future posts by email (top right of page) and you’ll receive a free eBook, The Gift of Debt, delivered to your inbox within the next 5 minutes!
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Related posts:
- Don’t wait to pay off your debt!
- I will not give in: the cycle of debt has been broken!
- How to stop wanting stuff that you can’t afford.
Image courtesy of Stuart Miles – freedigitalphotos.net
52 Comments
That is super scary. I have never been chased, but I have had family members who have owed money and were chased… it was harrowing to get calls and to be harassed even if it wasn’t for you.
save. spend. splurge. recently posted…What each country leads in (or is good at) [MAP]
It is really frightening and for me totally out of the blue!
Greg got a collections letter from one of his old utility companies from when he lived in an apartment in college. they chased him well into adulthood for something like $56. I happily paid it to get it off of his record!
Holly@ClubThrifty recently posted…Things Adults Have To Pay For That Kids In Their Twenties Don’t
It’s amazing that they would continue to chase him for years like that! I don’t blame you for clearing it off for him!
That is frightening because of what that could potentially do to your credit! I check my credit score fairly often and look for anything unusual and that helps. Some people go a step further and have spreadsheets of all their credit card info which helps them keep track of everything. Hope it all turns out OK! That would be very stressful!
Budget and the Beach recently posted…Around the World on a Budget
Exactly! The weird thing is there is nothing like this on my credit report (and I’ve never seen anything like it in previous years)! I have a spreadsheet of our debts which gets updated every month – well worth doing!
I’m glad you had a subject matter expert to advise you! I do think here in the states that credit collectors buy up old debt, good or not, and chase down borrowers regardless. It’s a bad practice.
Done by Forty recently posted…Do Credit Cards Actually Increase Spending?
I agree – it seems bad practice to chase debt in a vague way like this. They should at least have some evidence before frightening the socks off the people they are chasing!
This happened to my parents. They sent a cease and desist letter to them telling them they had the wrong person. This stopped them from bothering them again. You just have to make sure they have the right person.
Debt and the Girl recently posted…Having the “Poverty” Mentality and How it Affects your Finances
Thanks – it’s almost like they write to anyone with the same name regardless of where they live in the hope they will ‘hit’ on the right person.
Scary stuff. Its so good that such good advice is so readily available in this day and age. Well done you, and well done “the internet”!! 🙂
moneystepper recently posted…Free online giveaways – pros and cons of hosting competitions
Definitely! A few years back, I would have let this get the better of me but luckily there is so much help and advice available out there now. 🙂
I was never in this situation, but my father is actually being ‘chased’ for a payment he made in 2011 (I was WITH HIM) and the bank doesn’t ‘know’ about the payment. He was stupid enough not to keep the receipt, so it’s gonna be pretty interesting to prove he made the payment. Worst case scenario, he’ll pay again.
Keeping my fingers crossed for both of you 🙂
dojo recently posted…Blogging: Should you pay for comments?
Oh no, sorry to hear about your father. That’s awful knowing he made the payment but having no proof your end. Did he pay cash or using a credit card or cheque? Just thinking there might be some evidence somewhere if not in the form of a receipt.
I’ve never been chased for anything (touch wood) but I can imagine how frustrating this can be! Since the debt is back from 2003 and is classed as statute barred, does it mean you can forget about it? I sure hope so! Especially since you don’t even remember you owe anything to them.
Eva @ Girl Counting Pennies recently posted…Picking the Right Credit Card
I’m certainly hoping so Eva – I have no recollection of this debt and the fact that it’s not in my credit file makes me hugely suspicious! I will have to wait and see if there is an ‘agreement’ with my signature on it – but I have also heard cases of signatures being forged too!
Hayley recently posted…Keep Calm and Carry On! Part 1
Oh no! I hope everything works out OK for you Hayley! This is one of the things I love most about being a part of this online PF community. So many people willing to help others out. 🙂
Thanks GMD! I don’t know where I’d be without the PF community. It’s saved my bacon in more ways than one! 🙂
Hayley recently posted…Keep Calm and Carry On! Part 1
I seem to remember reading in the past that when this happens if you don’t acknowledge the debt (Genuinely of course) and then tell them formally that you dispute it, then they’re no longer allowed to contact you until providing proof that the debt belongs to you. Even then, you can still dispute the amount owed. If they continue to hassle you it can be classed as harassment by law.
Found it here actually under the subheading OFT Debt Collection Guidance ~ http://www.beatmydebt.com/managing-creditor-harassment/stopping-harassment-for-a-disputed-debt.htm
This action may be more applicable to more recent debts but I hope it helps and is still relevant.
Adam @ Money Bulldog recently posted…Npower Raises Prices by 10.4% months after profits rose by 25%
Hi Adam – thanks so much for this link – there is a useful creditor harassment letter on this site which I may need to download and adapt to my situation! Very useful, thanks again. 🙂
Hayley recently posted…Keep Calm and Carry On! Part 1
Thank goodness for the blogging community. Someone always has a good answer. I’m glad you seem to be in the clear.
Stefanie @ The Broke and Beautiful Life recently posted…Running the Marathon. No Frills Attached.
Thanks Stefanie! I’m sleeping at night which is good and no sign of any ‘agreement’ yet!
Rob is a very good friend to have!!! Glad you made it out alive. The excerpt from the letter nearly made me puke so nervous was I. Have a breezy evening!
cj recently posted…I Love the NFL
Lol! I love your comments, they always make me chuckle! I nearly puked too when I came off the phone! Thanks CJ. 🙂
Hayley recently posted…Keep Calm and Carry On! Part 1
I would have freaked out for a moment, too. I’ve never been contacted by a debt collection agency, and I’m not sure what I’d do if I was. Your conversation with them did sound a little sketchy. I really don’t like when people probe about personal information without really telling you what it’s about. I hope you can send that letter and get it resolved!
E.M. recently posted…Financial Observations About Colleagues
Me too E.M. I’ve never been contacted prior to this by any kind of debt collection agency and it was a real shock!
Yikes Hayley…what a letter to get!!
I remember back in my “bad boy days” I used to get calls and letters every now and then from collection agencies. While I was not out to “screw” any one company out of their money, I just didn’t have any to give during those times, and would let the collection agency know this.
There were the usual threats and such, but in Canada, I don’t know about the UK, we have rights concerning this kind of thing and basically I reminded them that all they could was send me a letter in the mail asking for payment. They are not allowed to call you if you ask them not to. And they certainly cannot drop by and take your stuff nor can they take one to court!
I would eventually end up paying the debt, but I would do it ever so slowly and I wouldn’t allow it to worry me.
It’s still not a nice thing to have to deal with, and thankfully, I am not in such a situation anymore.
I hope you are able to resolve this to your benefit Hayley, and try not to worry about it
Take care and my best to all.
Lyle
lyle @ the Joy of Simple recently posted…Reader Q & A: On Courage And The Road Less Travelled!
Thanks Lyle! Our rights are similar I think – as long as we are paying back what we can I think creditors usually understand different circumstances. If I knew this debt was mine, of course I would pay it (perhaps not all at once!), but I honestly don’t believe that it is.
I love how you don’t let things get you down Lyle, even in your ‘bad boy days’. I guess life really is too short to spend it worrying! I need to be more like this I think which is why your blog inspires me so much!
I won a lot of money in the lotto and had my name listed as a lotto winner on the state website. I was then contacted by mail by verizon about a $70 bill and Ive never had verizon and I have googled my name and even met a girl with my exact first, middle and last name, we’re like dopplegangers. Shes since gotten married and changed her last name. I went ahead and paid the $70 just to be done with it and the $70 (as bad as this sounds) wasnt too much to pay just to be done rather then fight it. I didnt know where other me liver at the time to tell them about her.
Also once had a repo man show up to repo a car that I didnt own. He was looking for another girl with my last name and different first name who used my address to get a car. He did believe me and my cars are paid off so off he went, but he could have been horrible.
Hi Brandy, thanks for stopping by and congrats on winning the lotto! I can imagine what attention that might bring to lots of people never mind creditors, what with having your name published on the state website. I’m not sure if I’d have paid the debt though, it just seems so unfair that they targeted you like that!
Ugh, Hayley! Those types of things can be so unsettling, can’t they? We’re having a bit of a turbulent month too, as Rick’s truck needs new tires, and we’re hoping to get the wood stove installed to save on heating bills this winter. It’s so stressful, even the thought of possibly having to spend extra cash!
Laurie @thefrugalfarmer recently posted…Hidden Tips for Saving Money on Groceries
I know what you mean Laurie – it definitely upsets the apple cart doesn’t it? Having unexpected bills come in like that will impact on debt repayments and it’s pretty crappy as I’m sure like me, you look forward to paying as much off as possible on debts each month! Hope you and Rick get things sorted as cheaply as possible!
Yep we’ve had this before. My best advice is to just completely ignore it, although it obviously helps massively if you:
A) Are 99% sure you don’t owe them anything
B) That 6 year rule is pretty damn handy as well
We just got by with A) totally ignored the letter and never heard from then again. If it happens again I can sleep even easier knowing B) so muchas gracias for highlighting.
Andy @ theFIREstarter UK recently posted…Sunday Story: Internal Locus of Control
Thanks Andy! I’m glad you managed to tackle your situation. I’m sure that A and B will apply to my situation!
That sounds super scary.. as well as super shady!! Glad you were able to gather some resources regarding your rights and what can be done without it… good luck in getting it resolved, Hayley!
anna recently posted…Weekend Retreat
Thanks Anna! I would have curled up into a ball and accepted what was happening a few years back but luckily my eyes have been opened thanks to the wealth of information and resources available concerning debt issues!
Omg I would be pretty scared if this happened to me!
Lisa E. @ Lisa Vs. The Loans recently posted…Links Lisa Likes – 10/20/13
I never thought it would happen to me, but I won’t give in without a fight!
That was scary tough! My friend had a debt before and forgot to pay it in due time he was chased by the debt collector almost everyday.
Clarrise @ Make Money Your Way recently posted…How to save time managing your ad deals
Eeeek – that would be awful! That’s so scary to be chased every day like that. I haven’t heard anything back yet from this debt collection agency so hopefully that’s the end of it.
Sounds like a scam to me. I wouldn’t pay anyone anything until they can prove that you actually owe the money.
Best case, it’s a scam and they’re trying to steal your money and/or your identity. Ignore it.
Moderate case, it’s an honest mistake by the catalog company, and the agency is trying to collect in error. Correct it.
Worst case, it’s an actual debt that slipped through the cracks and you can pay it and be on your way.
Tread carefully.
Jack @ Enwealthen recently posted…Upcoming California Real Estate Tax Deed Auctions November 2013
Thanks Jack! If the debt was mine, I would pay it of course, but I honestly had no idea about it so I don’t see how it can be. I’m intrigued to know how they are going to prove that it’s mine. I definitely will tread carefully! 🙂
Debt collectors are the worst and they use some pretty shady and dirty practices. Glad you fought it. I’m sure they just hope some unsuspecting person just pays the bill to avoid any problems.
Andrew@LivingRichCheaply recently posted…Why Aren’t You Saving for Retirement?
Thanks Andrew! I totally agree they use shady practices – not nice at all. If there was such a debt, why wait 10 years?! I just don’t get it!
I dealt with some debt collectors over 10 years ago for mom’s hospital bills. I was young and stupid and got intimated easily. It got resolved at the end, but I lost some money in it that I wasn’t supposed to pay.
Michelle’s Finance Journal recently posted…Stress Melter
That must have been really tough especially as it was to do with your mom’s care. Debt Collectors can take advantage sometimes with their techniques. 🙁
Hayley recently posted…Keep Calm and Carry On! Part 2
That sucks but good to know there were people and bloggers who could get some help from! Hope it all gets resolved soon!
Mo’ Money Mo’ Houses recently posted…Weekly Blog Love – A Week of Changes & Surprises
Thanks so much. I’ve heard nothing yet still but am waiting with baited breath each time the postman comes with a letter!
Hayley recently posted…Keep Calm and Carry On! Part 2
After I had breast cancer, surgery, and treatment, we were laid off. We moved from Minnesota to California for a new job at a small company and bought a personal health insurance policy, which had a very high deductible. Money was very tight. I had to have some yearly testing done, and blood was drawn at the lab. I received an outrageous bill for this, almost quadruple what I paid in Minneapolis. I called the hospital, complained, asked for lower rates etc. to no avail. Finally I said I could pay $10-20/month until it was paid.
Apparently, that was not enough, even though I made regular payments. The bill went to collections, and a young woman called me one day. Let me say, I read her the riot act. “This is why people die from cancer in this country! It is SO expensive etc. etc.” She received an earful from me. Guess what? I never heard from that collection agency again, and never received another bill for that lab work.
Hi Isabella, thanks so much for stopping by and sharing your story. I hope you are now fully recovered from your treatment? That seems so unfair that you were chased by debt collectors for a blood test bill especially after going through all that treatment! We’re fairly lucky here in England to have the National Health Service (NHS). We pay for it with our taxes but it’s well worth it as no matter how much treatment we need in hospital, we’re covered.
Hayley recently posted…Keep Calm and Carry On! Part 2