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Govt launches debt collection avoidance firm crackdown

Published on 4 Jun 2009 under category: legal

A crackdown has been launched on companies which claim to offer consumers a way of avoiding paying money they owe, organisations engaging in debt collection may be interested to discover.

The Daily Mail claims that these businesses "fool" people into thinking they can exploit a legal loophole to escape their obligations.

It states that while there are instances where the wording of contracts allows the party to escape debt collection efforts, these are very much in the minority.

A banking source tells the news provider that it is also a major problem for the financial services sector, as when this type of action is tabled they are required to return to the original contract.

They assert: "There is a significant workload. You may have to go back decades to find an agreement form and all because of claims that are usually spurious."

In other news, cost reforms governing commercial litigation are being trialled in Birmingham by Lord Justice Jackson, the Birmingham Mail has reported.