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I have been asked to reply on behalf of the Department for Business, Innovation and Skills.
Under the Consumer Credit Act 1974, businesses must hold a consumer credit licence if they wish to undertake consumer lending or related credit activities, including the collection of debts that have arisen under consumer credit agreements. The Office of Fair Trading (OFT) considers the fitness and competence of businesses that apply for a licence and continues to monitor licensees, taking action where businesses do not reach or maintain the relevant standard.
The OFT has issued guidance aimed at consumer credit licence holders involved in debt collection. The guidance makes clear the responsibility of licensees to ensure the quality and level of information they maintain and exchange with others. The guidance also sets out specific practices that the OFT would consider to be unfair and which would call into question the fitness of the business concerned, including practices relating to poor data accuracy resulting in the pursuit of debt that is not owed, or pursuit of the wrong debtor.