CONC 7.14 Settlements, disputed and deadlocked debt
Disputed debt
- (1)
A firm must suspend any steps it takes or its agent takes in the recovery of a debt from a customer where the customer disputes the debt on valid grounds or what may be valid grounds.
[Note: paragraph 3.9k of DCG]
- (2)
Paragraph (1) does not apply where a customer under a green deal consumer credit agreement (within the meaning of section 189B of the CCA) alleges that the disclosure and acknowledgement provisions in Part 7 of the Green Deal Framework (Disclosure, Acknowledgement, Redress etc) Regulations 2012 (SI 2012/2079) have been breached, but the lender reasonably believes this not to be the case.
Valid grounds for disputing a debt include that:
- (1)
the individual being pursued for the debt is not the true borrower or hirer under the agreement in question; or
- (2)
the debt does not exist; or
- (3)
the amount of the debt being pursued is incorrect.
[Note: annex A3 of DCG]
Where there is a dispute as to the identity of the borrower or hirer or as to the amount of the debt, it is for the firm (and not the customer) to establish, as the case may be, that the customer is the correct person in relation to the debt or that the amount is the correct amount owed under the agreement.
Settlements and deadlocked debt etc
A debt repayment is deadlocked where the customer (or the customer's representative) has acknowledged the customer's liability for a debt and has proposed a repayment plan, but the proposed repayment plan is not acceptable to the firm seeking to recover the debt.
[Note: annex A4 of DCG]
A firm must give due consideration to a reasonable offer of repayment made by the customer or the customer's representative.
[Note: annex A5 of DCG]
Examples of conduct that may contravene CONC 7.14.10 R would, depending on the circumstances, include where following an unacceptable offer a firm immediately:
In considering the customer's repayment offer, a firm should have regard, where appropriate, to the provisions in the Common Financial Statement or equivalent guidance.
[Note: annex A6 of DCG]
- (1)
Merely making a counter-offer to a customer's repayment offer or merely taking steps to enforce an agreement would not contravene CONC 7.14.10 R.
- (2)
A firm which makes a counter offer to a proposal made by or on behalf of the customer, should allow the customer or the customer's representative, a reasonable period of time to consider and respond to the counter offer.
[Note: paragraph 7.16 of ILG]
If a firm accepts a customer's offer to settle a debt, it must communicate formally and unequivocally that the offer accompanied by the relevant payment has been accepted as settlement of the customer's liability.
[Note: paragraph 3.3h of DCG]