Tax farming: Debt collection agencies explained
The law relating to debt collection agencies is straightforward: An agent must be able to provide a copy of instructions from the principal debtor, instructing the agency to collect the debt, and stating the amount of the debt collectable, explains David Gordon.
It is not sufficient to provide a letter on the agency’s notepaper, saying “We have been instructed…” I repeat, upon request of the debtor or his agent, the agency must produce a copy of clear instruction from the principal. Further the principal must have advised the debtor that it was placing the debt in the hands of a debt collector, naming the debt collector.
No “ifs” no “buts”, proof of entitlement to collect must be available, and be produced if asked for.
To attempt to collect and or extract money from a third party, (that is, the person purports to be agent collecting for the debtor, the party to whom the funds are due) except and unless the collector is able to produce formal proof of instruction, is an unlawful action.
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