Press Release

Misery Heaped on Scots Debtors by Law Firms Practicing Debt Collection, Says Scottish Debt Advice Company, Trust Deed Scotland

GLASGOW, SCOTLAND, February 05, 2012 /24-7PressRelease/ -- According to the Scottish law charity Govan Law Centre, the behaviour of some law firms that collect debt is `unfair`, oppressive and disproportionate` leading to `unnecessary human misery`. Scottish homeowners are being threatened with losing their homes over small debts, with a knock-on effect of mortgage-to-rent transactions being wrecked.

Principal solicitor at GLC, Mike Dailly, said: "Besides causing unnecessary human misery, these practices are resulting in vulnerable Scottish homeowners being threatened with homelessness as creditors use inhibitions for tiny debts. They also result in creditors being able to scupper Scottish Government mortgage-to-rent transactions, where families facing homelessness can have their house purchased by a social landlord."

Most Scottish debt collection firms of solicitors operate under the Law Society of Scotland`s `group consumer credit licence`, rather than a `Category F` consumer credit licence which independent Scottish debt collection firms are required to obtain to practice. However, the Law Society does not regulate this area of work, leaving debt collection by its members largely unregulated and open to abuse.

Mike said: "To give an illustration of the problem, we have a case in Glasgow where it has taken us many months to defend a repossession action and broker a complex mortgage to rent transaction, which is now being thwarted by a Scottish firm of solicitors acting on behalf of an English debt purchasing company for a debt of GBP810.  Last month the company was prepared to accept repayment at GBP5 per week, but since obtaining an inhibition it wants all of the money as a lump sum".

"Our client is on incapacity benefit and has offered GBP100 plus GBP5 per week but the company`s solicitors advise their client to say no. We believe this Scottish law firm and company have engaged in aggressive, oppressive, and unfair practices contrary to the OFT`s expected standards for consumer debt recovery, and contrary to section 25 of the 1974 Consumer Credit Act".

However, according to the Law Society of Scotland, a group consumer credit licence from the OFT covers all solicitors practicing debt collection. In addition, only those groups that are able to pass the OFT`s public interest test in accordance with the Consumer Credit Act are issued with a licence.

A Spokesperson for Scottish Debt Advice Company, Trust Deed Scotland, says: "It seems that while the Law Society believes one thing, its members may believe another. It could be that the companies involved are operating through a loophole or it may even be that some unscrupulous law firms know what they are doing and that their behaviour is unlawful.

"Either way, the OFT needs to address the problems uncovered by the Govan Law Centre, and the Scottish Government needs to look at tightening up the procedures involved in the mortgage-to-rent scheme so creditors cannot inflict this kind of misery and stress over such miniscule debts."

Do you have more debt than you can cope with? Need to find out about some of the options? For more information of Trust Deeds in Scotland, Scottish Trust Deeds or Protected Trust Deeds call and speak to one of our advisers in confidence now on 0141 345 2904.

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