Borrowers hounded by debt firms for bills they don’t owe

NAIMA MARI 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 being signed off work because of her mental health.

But nearly a month after repaying the sum in full, Naima began receiving threatening

letters and text messages from a debt collector. It emerged that 118 118 Money had sold her details to a third-party agency.

The case adds to growing concerns over the heavy-handed tactics used by debt collectors amid the cost-of-living crisis.

Citizens Advice warns that the number of people being contacted by such agencies on behalf of energy suppliers has increased by a third since 2021.

Some 26,000 people have been in touch with Citizens Advice so far this year about debt collectors chasing missed utilities bills.

And last month it was reported that a British Gas representative with two third- party debt collectors had broken into the home of a couple who were not even customers. The employee picked the lock after mistaking the homeowners for their neighbour, who hadn’t settled his bill.

Naima suffered panic attacks after her experience.

‘I had already paid the debt so they should not have been after me,’ she says. ‘It was such a stressful time.’

Selling debts to third parties is common practice among creditors. Most debts will be sold on only if the account holder has defaulted on payments.

Typically, they will be sold for less than the face value, but it means the creditor gets some of the money owed and does not have to spend time and money chasing payments.

The firm that buys the debt will then pursue the borrower for the full amount, which is where their profit comes from. Naima has since received an apology from 118 118 Money for what it describes as an administrative mistake. It says that, owing to a timing error, the account was not removed from the debt sale file and was sold.

She was offered £ 100 compensation, but rejected it.

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, ordered a parcel to be delivered by shipping company UPS. When it arrived, he was charged £ 50.83 for customs tax, which he paid the driver in cash.

But a month later, he received an invoice from UPS demanding money.

Despite confirming his previous payment with the company, he received another invoice with an additional £4 fee.

He paid it in an attempt to get the company off his back. But then the couple received a letter from a debt collection firm called Controlaccount demanding the money.

Ian explained the situation to the firm, which agreed to drop the case. But the stress caused him sleepless nights.

‘He’s been so worried about it,’ says Melissa. ‘It makes you question whether it will affect your credit rating.’

A UPS spokesperson says the firm is resolving the issue for the recipient, and regrets any inconvenience caused.

For more advice on how to manage debt or to make a complaint about how a debt collector has behaved, visit stepchange.org.