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    2022-02-28

CONC 7.14 Settlements, disputed and deadlocked debt

Disputed debt

CONC 7.14.1RRP
  1. (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. (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.

CONC 7.14.2GRP

Valid grounds for disputing a debt include that:

  1. (1)

    the individual being pursued for the debt is not the true borrower or hirer under the agreement in question; or

  2. (2)

    the debt does not exist; or

  3. (3)

    the amount of the debt being pursued is incorrect.

    [Note: annex A3 of DCG]

CONC 7.14.3RRP

Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner.

[Note: paragraph 3.9i of DCG]

CONC 7.14.4RRP

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.

[Note: paragraphs 3.9j of DCG and 7.11 (box) of ILG]

CONC 7.14.5RRP

A firm must provide a customer with information on the outcome of its investigations into a debt which the customer disputed on valid grounds.

[Note: paragraph 3.3g of DCG]

CONC 7.14.6RRP

Where a customer disputes a debt and the firm seeking to recover the debt is not the lender or the owner, the firm must:

  1. (1)

    pass the information provided by the customer to the lender or the owner; or

    [Note: paragraph 3.23h of DCG]

  2. (2)

    if the firm has authority from the lender or owner to investigate a dispute, it must notify the lender or owner of the outcome of the investigation.

Settlements and deadlocked debt etc

CONC 7.14.7GRP

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]

CONC 7.14.8RRP

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]

CONC 7.14.9RRP

Where a firm rejects a proposal for repayment from a customer in default or in arrears difficulties or from the customer's representative, the firm's response must include a clear explanation of the reason for the rejection.

[Note: paragraph 7.16 (box) of ILG]

CONC 7.14.10RRP

If a firm rejects a repayment offer because it is unacceptable, the firm must not engage in any conduct intended to, or likely to, have the effect of intimidating the customer1 into increasing the offer.

[Note: annex A5 of DCG]

CONC 7.14.11GRP

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:

  1. (1)

    sends field agents to visit the customer or communicates to the customer that it will do so;

    [Note: annex A5 (box) to DCG]

  2. (2)

    substantially increases the rate of interest or imposes a substantial charge or communicates that is will do either of those things.

CONC 7.14.12GRP

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]

CONC 7.14.13GRP
  1. (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. (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]

CONC 7.14.14RRP

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]