Daniel Hamilton: A town hall culture of bully-boy debt collection

THE debt recovery industry is booming in the United Kingdom.

Across the country, there are in excess of 500 companies engaged in recovering unpaid debts with a collective turnover of more than £3bn a year.

In total, 17 million debt recovery cases were processed by debt recovery agencies last year – that’s almost 50,000 a day.

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The term “debt recovery agency” is an obtuse one, used only by industry-insiders. Everyone knows them as “bailiffs”.

In the majority of cases, bailiff’s largest single customers are local councils seeking to recover unpaid council tax debts or unpaid parking fines.

In a report released yesterday by my organisation Big Brother Watch, we have uncovered evidence of councils passing cases to bailiffs on almost six million occasions in the past three years. That’s more than the entire population of Finland, Denmark, Norway, New Zealand and Ireland.

In many cases, bailiffs are a law unto themselves; using historic powers to barge their way into people’s homes, intimidating members of the public and imposing rip-off charges – often to recover debts totally only a few hundred pounds.

Last year, an investigation by the Citizens Advice Bureau revealed a 30 per cent increase in the number of people seeking help following aggressive demands from bailiffs for the payment of debts. Of the 500 cases they examined in depth, 64 per cent found bailiffs guilty of harassment or intimidation, 42 per cent imposed excessive fees for their services and a quarter threatened debtors with imprisonment for not paying up on the spot.

While bailiffs cannot break down a person’s door, they can legally enter a property through an open door or window.

If a bailiff is invited into a person’s home – often after nefarious requests to use the toilet or telephone – they automatically gain the legal right to return at a later date. When inside, they can search all rooms in the house, smash open locked doors or cupboards and find and seize any goods of value belonging to the debtor.

My organisation has uncovered scores of examples of council-sponsored bailiffs adopting bully-boy tactics in their efforts to claw back unpaid debts.

In Lewisham, a 102-year-old dementia sufferer living in a care home was chased for a bill of more than £400. The demand was only cancelled after her 80-year-old son pointed out the shock of receiving such a bill could drive his mother to an early grave.

In Rushmoor, a pensioner in her 70s was handed a £360 bill for late payment of a £35 parking ticket after a long spell in hospital. The charmer charged with recovering the debt threatened to seize her mobility scooter unless she paid up.

We’ve also seen how incompetent council officers can leave vulnerable people exposed to aggressive approaches from bailiffs for debts they do not even owe.

In one case, a gentleman in South Oxfordshire in his mid-80s was too left too scared to answer his doorbell after he wrongly received letters from bailiffs threatening to seize his property unless he paid a £475 charge he did not even owe. In another case, a Cambridgeshire pensioner returned home to find his house had been boarded up and locks changed. The bailiffs had got the wrong house.

While local councils should reserve the right to use bailiffs as a last-ditch means by which to recover debts from the very worst offenders, no right-thinking person could conclude six million bailiff referrals by local councils in just three years is either proportionate or acceptable.

The Government must act to end the culture of bully-boy debt collection which has taken hold in town halls across the country

In the vast majority of cases when bailiffs are sent to people’s homes, the debtors are not doggedly refusing to pay their debts; they’re simply unable to.

It is simply wrong that, as in the case of two young parents in Rossendale, missing one £166 payment can result in £400 of bailiff charges being levelled against them.

At present, far too little information is made available to those who fall on hard times about the options available to them to receive either short-term housing benefits or to adopt long-term payment plans to settle their debts.

As a result of this, far too many people find themselves caught in a vicious cycle, with debts owed to often increasingly aggressive bailiffs rising each month.

It’s clear that we need a step-change in local government; shifting the use of bailiffs from being an everyday occurrence to a rare last resort, deployed against only the most severe and habitual of debtors.

Working with groups such as the Citizens Advice Bureau, the Sterling Trust and the National Debt Line, councils and central government should come together to fashion a new approach to debt collection based on giving people fair chance to pay – not forcing their way into people’s homes.

Daniel Hamilton is director of the civil liberties and privacy campaign group Big Brother Watch.