Dealing with a collection agency can often feel like navigating a maze, especially when there seems to be a change in your account’s open date. If you’ve found yourself in this situation, you’re likely asking, “Can a collection agency change an account’s open date?”

In this blog post, we’ll tackle this question head-on, providing clear and concise answers. Understanding this aspect is crucial, particularly if you are faced with debt collection in Kent. This piece will serve as a guide to help you navigate the complexities of debt collection processes and understand your rights as a consumer.

What Is a Collection Agency and How Does It Work

A Collection Agency is a company hired by lenders to recover overdue funds from borrowers. It operates in the following manner:

      • Initiation: A lender will engage a Collection Agency after several failed attempts to collect the debt from the borrower. In many cases, they might opt for a ‘No Collection No Fee Debt Collection‘ service, where the agency only gets paid if they succeed.

      • Notification: The agency then contacts the borrower, often via letters and phone calls, to inform them of the outstanding debt. The communication is aimed at instigating repayment.

      • Collection: If the borrower is responsive, the agency will work out a repayment plan. In some instances, these agencies can negotiate a lower total payment.

    • Legal Action: If the borrower remains unresponsive or cannot meet the repayment plan, the agency could resort to legal action, depending on the debt’s size and nature.

Remember, in the ‘No Collection No Fee Debt Collection’ model, the agency is incentivised to recover the debt as their payment is contingent on their success.

How Do Collection Agencies Operate and What Are Their Legal Rights

Collection agencies in the UK operate within strict regulations, and their rights and powers are clearly defined by the law. They can’t harass debtors or act unfairly. However, they do have the right to collect on a debt you owe, and this process can involve several steps, including:

      • Verification of Debt: Collection agencies need to verify the debt they are collecting is accurate and valid. This might involve a review of original credit agreements and payment histories.

      • Communication: The agency is allowed to contact the debtor to discuss the debt, usually through letters or phone calls. However, they must respect the debtor’s wishes if they are asked not to call at certain times.

      • Legal Proceedings: If the debtor does not cooperate, the collection agency can take the debtor to court. They might also be able to add legal costs and debt collection fees to the total amount owed.

      • Enforcement of Judgment: If the court rules in favour of the agency, they can enforce the judgment to recover the debt. This might include instructing bailiffs to seize property, applying for an attachment of earnings order, or securing the debt against the debtor’s property.

    • Reporting to Credit Reference Agencies: Collection agencies can report unpaid debts to credit reference agencies, which can significantly impact the debtor’s credit rating.

It’s important to note that the ‘No Collection No Fee’ model often comes with its own set of debt collection fees once the agency successfully recovers the debt. As a debtor, it’s crucial to understand your rights and the limits of what collection agencies can do.

Can a Collection Agency Change an Account’s Open Date

The open date of an account is set when the account is first opened, and it cannot be altered, not even by a collection agency. This date is significant as it is used to calculate the length of a debtor’s credit history, affecting their credit score. Therefore, any changes could lead to inaccuracies in their credit report.

If a debtor notices that a collection agency has altered the open date of their account, they should dispute this immediately with the credit reference agencies and the Financial Ombudsman Service. Remember, understanding your rights and the limits of what collection agencies can do can help protect you against unfair practices.

How to Challenge a Collection Agency if they Attempt to Alter an Account’s Open Date

If you suspect a collection agency has unlawfully changed your account’s open date, you can take the following steps:

      • Check Your Credit Report: Regularly review your credit reports for any discrepancies. You can request a free report once a year from each of the three main credit bureaus.

      • Gather Evidence: If you spot an error, gather all relevant documents such as original credit agreements, payment histories, or previous credit reports to support your case.

      • Dispute the Error: Contact the credit bureau reporting the error and the collection agency. Provide them with copies of your evidence and explain your dispute in writing.

    • Follow-up: If the error isn’t resolved, consider contacting a legal professional or filing a complaint with the Federal Trade Commission (FTC).

Remember, it is crucial to act swiftly and thoroughly to protect your credit score and financial stability.

The Potential Consequences of Altering an Open Date on Your Credit Report

The potential consequences of altering the open date on your credit report can be significant. They include:

      • Extended Negative Impact: If the open date of a debt is incorrectly changed to a later date, the negative information could remain on your credit report longer than the legally mandated seven years.

      • Lower Credit Score: An extended history of debt may lower your credit score, which could affect your ability to secure loans or credit in the future.

      • Difficulty Securing Financing: With a lower credit score, it might be more difficult to secure financing for large purchases such as a home or car. Some landlords and employers also check credit reports, which could impact your housing options and job prospects.

      • Increased Interest Rates: If you’re approved for a loan or credit, lenders may charge you a higher interest rate due to the perceived risk associated with your lower credit score.

    • Harassment from Debt Collectors: If the debt remains on your report, you could continue to receive collection calls and letters for a longer period.

About Us

Taurus Collections (UK) Ltd. can be your one-stop destination if you want to successfully boost your odds of collecting debts. Use our Late Payment Calculator to calculate your outstanding credit amount. We help our clients with certain debt collection services that include:

For more details, call us at 0800 069 8777 or 01332 565 350 (Derby). Send your concerns to Connect on Facebook, Instagram, and Twitter. Drop by our office -International House, 126 Colmore Row, Birmingham B3 3AP, UK.