Can debt collection company legally access my credit report?

Dear James,

I am currently having dealings with a debt collection company regarding a debt that I do not consider I owe them. They are now saying that they are going to obtain a copy of my credit report from Experian and use it for deciding what steps to take next. Can they legally do this without my permission?

Lloyd, Essex

Dear Lloyd,

A company must always get your permission to check your credit report. When you apply for credit you will usually consent to the lender checking your report at various stages in their relationship with you; including at the outset to help decide whether to grant credit in the first place, and then on an ongoing basis to help manage your account while ever you remain a customer. Importantly, if a debt is sold on to a debt collection firm, this consent stays with the debt. This gives the collection firm the right to access your credit report to assess your overall financial situation and to make appropriate decisions about engaging with you and collecting the outstanding balance. Now, if there is a dispute about whether you owe the money in question then the firm should look into this for you and, if they believe the debt is actually valid, provide evidence to back this up. If, however, you actually dispute any connection with the debt at all – perhaps it’s a case of mistaken identity? – you should make this clear to them and they should take prompt action to rectify the situation. If it isn’t your debt then the debt collection firm should certainly not be checking your credit report.  The Financial Conduct Authority's consumer credit rules dictate how firms should act in situations like this and if you believe the guidelines have been broken you could have a case to take to the Financial Ombudsman Service. I suggest you first try to resolve the matter directly with the collection firm and, if necessary, with help from the collection trade body by the Credit Services Association. You can get advice from their website. Importantly, any footprint registered by a firm checking your credit report to collect debt should not affect credit scoring. (January 2014, updated April 2017)


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