The debt collection process: what to expect

What is a debt collection agency?

A debt collection agency, sometimes shortened to DCA, is a company focused on trying to recover outstanding debt from individuals.

There are various debt collection agencies in the UK, some of which are authorised and regulated by the Financial Conduct Authority (FCA), this includes Lowell Financial Ltd. Being FCA-approved means that the DCA are authorised to carry out regulated financial services activities.

A debt collection agency will either be working on behalf of a creditor to try and collect a debt, or they may have purchased the debt from the original creditor.

For the purpose of this guide, when we’re discussing the process of debt collection, we’ll be referring to debts that have been purchased by a debt collection agency, making them the sole legal owner.

What can a debt collector do?

Debt collectors are allowed to try contacting customers in various ways. This can include sending letters or calling and emailing you. In rare cases, they may even visit your home.

If you repeatedly ignore their attempts to contact you and refuse to make payments, they could take court action which may lead to a County Court Judgment (CCJ) being issued against you.

What can debt collectors not do?

Unlike enforcement agents, also known as bailiffs, debt collectors don’t have any particular legal powers. Debt collectors also can’t do any of the following:

• Threaten or harass you
• Mislead you
• Trick you into contacting them
• Lie about what legal powers they have
• Add unnecessary and extreme interest or fees to your debt
• Talk to, or threaten to talk to, other people in your life (i.e. family, friends, and employers)

If you think that a debt collector isn’t behaving as they should, you can complain. For more information, you can read StepChange’s guide on making a complaint about a creditor.

What is a debt advice agency?

The purpose of a debt advice agency is to offer support and assistance to those who are struggling to deal with their debt.

There are various free debt advice agencies that help people with their finances by reviewing their circumstances, completing a financial budget, and offering advice. These include National Debtline and StepChange to name just a couple.

Once they understand your circumstances, one way they may be able to support you is by contacting the companies that you owe money to and arranging a payment plan on your behalf.

At Lowell, our priority is to support you in managing your Lowell debt in a way that's right for you. If you’re struggling to deal with your debt, we understand that you might not feel comfortable speaking to us right now. Instead, we can put you in touch with independent debt advice agencies that can offer free expert advice and support.

How does debt collection work?

When a company is owed an outstanding balance by a customer who stops or is unable to make payments, they often have the contractual right to sell that debt on to a debt purchase company, or to pass the account for collection to a debt collection agency.

Is selling debt to a debt purchase company legal?

Yes - debts can be sold on or 'assigned' to another company if you don't keep up with your contractual payments. This is common practice with a number of debt types, such as:

• Loans
• Overdrafts
• Credit cards
• Store cards
• Hire purchase agreements
• Mail Order accounts

For more information, we have another guide that delves further into how debt purchasing works.

What happens when a debt is sold to a collection agency?

Once a debt is sold, the outstanding balance is legally owed to the new collection agency instead of the original creditor.

If your debt is purchased by Lowell (Lowell Portfolio I Ltd) for debt collection, we'll work with you to get your Lowell debt cleared in a way that's affordable for you, and we'll tailor a solution that is based on your individual circumstances.

If a debt is sold to another company, do I have to pay?

Even if your debt has been sold by the original company, you’re still liable for the outstanding amount. The only difference is that you no longer owe the original creditor but the new debt purchaser.

Your legal rights will stay the same, and the new owner must continue to follow the terms of your original credit agreement. This means that interest or other charges can’t suddenly be added unnecessarily.

How will I know if my debt is sold?

Once your debt is sold to another company, the original company will send you a 'goodbye letter' to notify you of the sale, and the new company will send you a letter to make you aware of the debt purchase (this is called a 'Notice of Assignment'.)

For example, Lowell Financial Ltd will send a Notice of Assignment letter to explain that we have purchased your debt, and the balance is owed to us, so you'll need to get in touch with us to discuss your account going forward. We will also try to contact you directly.

Why are Lowell contacting me?

We'll contact you to let you know that we're here to support you with your debt, and to discuss repayment options.

When we contact you, we want to better understand your circumstances. This will help us to agree on an appropriate solution that is tailored to you.

How do Lowell have my contact details before I give you them?

When your debt is purchased from another company, the account information is shared with us.

This includes personal details such as the name, date of birth, and address of the customer (so that we can identify you when speaking to you) and contact information so that we can let you know that we've purchased your debt and that you need to get in touch with us.

You can also learn more about Lowell's data privacy promise to find out how Lowell protects your data.

Is Lowell a debt collector?

Lowell Portfolio I buys debts from businesses in a range of sectors like financial services, retail, telecoms, and utilities. Once we purchase a debt, the balance is owed to us. We (Lowell Financial Ltd) then work closely with our customers to pay back what they owe in an affordable way that suits them. 

Who do Lowell collect for?

Generally speaking, Lowell doesn't collect on behalf of anyone else. Once Lowell purchases a debt from another company, we're the legal owners of it. This means that the outstanding balance is owed to us.

There's a large variety of companies that we purchase debt from, including:

• Utilities - This can include gas, electric, or water
• Banking and financial services - This can include loans, overdrafts, or credit cards
• Telecommunications - These are usually mobile phone, broadband, or TV contracts
• Mail Order - This type of debt usually relates to catalogues or online shopping accounts that use credit

In rare cases, we may work with other companies to acquire a debt. Where this is the case, customers will be made aware as to who they need to make payments to.

Do Lowell charge interest?

Once your debt is purchased by Lowell, we don't add any interest or charges to the account. Any payment you make towards the debt goes towards clearing your balance.

As we touched on previously, if we don't hear from you after repeatedly trying to get in touch, we may pass your account to a solicitor to begin legal proceedings. At this stage, fees and interest could be added, increasing what you owe.

If a County Court Judgment (CCJ) is granted, this will be visible on your credit file for 6 years and may impact your ability to get future credit.

Once your debt is purchased by Lowell, we don't add any interest or charges to the account. Any payment you make towards the debt goes towards clearing your balance.

How does debt collection work at Lowell?

Whilst all debt collection companies work in different ways, in general, they'll get in touch to speak with you about how you can begin to repay your debt. At Lowell, our priority is to support you with managing your debt in the way that's right for you.

Once you get in touch with Lowell, we'll start with some security questions to make sure we're speaking with the right person. These are simple questions such as your name, address, and date of birth to ensure your details match the information we hold for your account.

Once we've confirmed we're speaking with the account holder, we'll discuss your situation and what your intention is with your debt. We're here to listen and support you with your account, so depending on what your circumstances are, we'll try and offer the best solution going forward.

This may include going through a budget calculator to discuss what payment plan might be affordable for you, or it might be that we offer other options that better suit your situation, such as speaking with a free and independent debt advisor.

Why do I need to confirm my personal details on the phone?

At Lowell, our team will ask you to confirm your personal details at the start of phone calls as a security measure before sharing any personal data or account information. We ask you to confirm information that we already hold about you in our systems to make sure we’re speaking with the right person. This is in line with our obligations under the data protection laws to keep your personal data secure.

What is a budget calculator?

A budget calculator is a tool you can use to understand how much money you have left over at the end of the month once you have paid all your bills and regular monthly expenses.

The Lowell Budget Calculator is completely free, and there's no obligation to get in touch with us when you use it. It works by considering both your income and outgoings to calculate what the remainder is and helps to indicate how much might be affordable for you to pay towards your debt.

You can complete the budget calculator with us over the phone or online. It's really easy to use and provides options for all the different types of income and outgoings to help you make sure you don't miss anything.

Setting up a payment plan with Lowell

Again, different debt companies have different processes for how customers can pay their debt. At Lowell, our process is to ensure that your payment is affordable and suitable for you. Beyond that, you’re in control of your payment plan.

After we’ve gone through a budget calculator with you, we’ll let you know how much money it shows that you have left at the end of the month. We can set up an affordable payment plan based on your budget calculator results and let you know how long that amount would take to clear your debt.

When choosing from our options, you decide what amount is suitable for you, as well as the payment method, frequency, and start date of your payment plan.

If you’d prefer, you’re able to set up a plan or make a payment online instead of over the phone – simply register your Lowell account online.

What frequency options are available for a Lowell payment plan?

We understand that everyone’s situation is different – some people receive a wage, some people receive benefits, and some people receive both. To help make your payment plan fit your finances, we’re able to offer you payment plans that are weekly, fortnightly, four-weekly, or monthly.

What are the different payment methods I can use?

We have a variety of different payment methods for you to choose from, for example, Direct Debit, debit card, cheque, or standing order. You can call or email us if you’d prefer to pay using a different method or find out about other payment methods.

Do Lowell accept credit cards?

No, Lowell do not accept payments with a credit card.

Paying by credit card could cause more financial problems in the long run, as you may be charged interest and have to pay a minimum payment to your card provider.

To find out more about what payment options are available to you, please get in touch with us. At Lowell, we take pride in ensuring that payment plans are reasonable and tailored to your personal circumstances.

Managing your payment plan with Lowell

At Lowell, once your payment plan is set, we’ll send you an email or letter to confirm the details. We’ll then only contact you periodically to make sure that your plan is still suitable, or if you miss a payment.

However, if you have a change in circumstances and need to change the details of your plan, you can do this online or by contacting us.

How do I get in touch with Lowell?

The quickest way to get in touch with Lowell is by phone – you can call us on 0333 556 5552. Alternatively, if you’d rather not speak to someone on the phone, you can also use our website's handy live chat function.

Can I stop paying Lowell?

If you’ve had a change in circumstances and can no longer afford the payment plan you set up with us, please get in touch with us to let us know.

We understand that individual circumstances change, and we will work with you to work out what the next best step is, whether it’s amending your payment plan or taking some time to speak to an independent debt advisor, such as those mentioned in our previous section ‘What is a debt advice agency?’.

If you stop making payments and don’t get in touch to discuss the reason why, we’ll continue to try to contact you to understand what’s happened. If we attempt to contact you repeatedly but don’t get a response, your account may be at risk of potential legal action.

This legal action could mean that fees and interest are added, increasing what you owe. If a County Court Judgment (CCJ) is granted, this will be visible on your credit file for 6 years and may impact your ability to get future credit. It's important that you get in touch to let us know what’s going on.

What else am I able to do online?

By registering your Lowell account online, you’re able to manage your debt yourself from anywhere at any time.

Here are a few things you can do online:

• Use our Budget Calculator to work out what you can afford
• Set a payment plan
• Check and amend your payment plan
• Make a payment any time - day or night
• Update your contact details
• Receive and review documents from Lowell
• Log in and check the progress of your payment plan

There are lots of different parts to the debt collection process, but we try to make working with Lowell to manage your debt as simple and easy as possible. If you have more questions about Lowell debt collection, then get in touch with us today to speak to our team and find out how we can help.

For more information, check out our other helpful debt guides to find out more about finance and debt.