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CONC 7.15 Statute barred debts

CONC 7.15.1GRP

A debt is statute barred where the prescribed period within which a claim in relation to the debt may be brought expires. In England, Wales and Northern Ireland, the limitation period is generally six years in relation to debt. In Scotland, the prescriptive period is five years in relation to debt.

[Note: annex B1 of DCG]

CONC 7.15.2GRP

In England, Wales and Northern Ireland, a statute barred debt still exists and is recoverable.

[Note: paragraph 3.15a and annex B3 of DCG]

CONC 7.15.3GRP

In Scotland, a statute barred debt ceases to exist and is no longer recoverable if:

  1. (1)

    a relevant claim on behalf of the lender or owner has not been made during the relevant limitation period; and

  2. (2)

    the debt has not been acknowledged by, or on behalf of, the customer during the relevant limitation period.

    [Note: annex B3 of DCG]

CONC 7.15.4RRP

Notwithstanding that a debt may be recoverable, a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period.

[Note: paragraph 3.15b of DCG]

CONC 7.15.5GRP

If the lender or owner has been in regular contact with the customer during the limitation period, the firm may continue to attempt to recover the debt.

[Note: paragraph 3.15b of DCG]

CONC 7.15.6RRP

A firm must endeavour to ensure that it does not mislead a customer as to the customer's rights and obligations.

[Note: paragraph 3.15b of DCG]

CONC 7.15.7GRP

It is misleading for a firm to suggest or state that a customer may be the subject of court action for the sum of the statute barred debt when the firm knows, or reasonably ought to know, that the relevant limitation period has expired.

[Note: paragraph 3.15b of DCG]

CONC 7.15.8RRP

A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.

[Note: paragraph 3.15b of DCG]

CONC 7.15.9RRP

A firm must identify for prospective purchasers of debts arising under credit agreements or consumer hire agreements or P2P agreements those debts which it knows or ought reasonably to know are statute barred, so as to avoid a firm taking inappropriate action against customers in relation to such debts.

[Note: paragraph 3.23c of DCG]

Complaints to the Financial Ombudsman Service and initiating legal proceedings

CONC 7.15.10RRP

A lender must not initiate legal proceedings in relation to a regulated credit agreement where the lender is aware that the customer has submitted a valid complaint or what appears to the firm may be a valid complaint relating to the agreement in question that is being considered by the Financial Ombudsman Service.

[Note: paragraph 7.9 (box) of ILG]