What to do if I dispute a debt?
In some unusual cases, creditors will contact you about a debt that you are not responsible for, or might be trying to collect a total that is incorrect. Either way, you should get in touch with them as soon as possible to get everything cleared up.
If you ignore the problem thinking that it cannot come back to bite you, you are mistaken; it could affect your credit rating if a creditor is trying to collect money from you, regardless of whether it is yours or not. It is important you address the problem as soon as possible.
How to respond when you think a creditor has mischarged you
The first thing to do is to request the relevant creditor for a summary of all the charges they have added. With the sheer number of charges and fees that creditors can apply to your debt balance, it is not unusual for the balance you receive to be higher than what you expected. Ideally, this breakdown will explain why the balance is different from what you had originally anticipated.
If any of the charges the summary reveals do not seem right, then have a look at the terms and conditions of the deal you have with the creditor. Typically, if they have added a charge to the bill it should only be to cover any costs that the creditor has encountered throughout your arrangement. If, for example, they have to send you out a form twice because you have misplaced the first one, then they cannot add on a charge far in excess of what that process would have cost them.
If your creditor will not correct anything that you have found to be unjust then it might be time to make a complaint. If their explanation is not satisfactory or they have taken more than two months to respond then you can reach out to the Financial Ombudsman Service; they will have a look at the issue and either explain why the charge was necessary or inform the creditor to correct the balance.
How to handle a mischarged debt
Occasionally creditors may contact you by mistake in an effort to collect a debt that you have nothing to do with. The reasons for this can vary; they may have mixed up your name or address with someone else, or they perhaps have not realised you are not using their service anymore.
Before disputing it with the creditor consider the following:
- Is the debt an old one of yours, which is being chased up by another company?
Companies will often sell debts to debt collectors. Check the letter closely, it may be the case that the original creditor name is shown, or perhaps has a count number that you can check against an old bill. If it definitely is not yours or if there is a discrepancy with the balance then take it up with the creditor.
- Is it a debt that just slipped your mind?
If creditors have taken a while to make contact with you again, it can often mean you have forgotten about it entirely. If it still is not ringing any bells just get in touch and ask for more details on the balance; they may be able to tell you the address it was originally registered at, as gaps in communication are often a result in a change of address.
If after clarification from the company who have sent out the bill you are still certain that the debt is not your responsibility then ask them for proof, like a copy of the original agreement.
If the creditor does not accept that the debt has nothing to do with you and does not respond appropriately then once again it is time to get in touch with Financial Ombudsman Service and make a complaint with them. They will investigate everything and make a decision on who is at fault.