Federal Management

josie37

Hi I am after some advice for my brother. Over 10 years ago he owed a small company £4000, which he put in place a payment plan paying £100/month.

Unfortunately his wife missed a payment which resulted in the debt been passed to a company called Federal Management.

This company started harassing my brother and his wife calling them all the time, sometimes more than twice a day. The call were at times abusive towards my brother and his wife, swearing at them down the phone demanding money from them. Furthermore Federal Management kept sending letters out upping the amount that my brother owed. The debt ended up going from £4000 upto £40,000!

My brother was bullied into signing a letter stating he owed the £40,000 and started monthly payments.

He has now had to go through a debt management company to help pay of the debt and also stop the harassing phone calls which he was still receiving.

Surely this practice is illegal? How can these companies operate in such a manner. Please has anyone any advice as to how he could possibly sort this.

Thank you in advance.

sourcrates

Yes its definitely against good debt collection codes of practice, he should not of let them bully him, the correct process would be to make a formal written complaint to the DCA.

Why type of debt was it ?

josie37

Thank you for your reply. He was a milkman and owed the money to the farmer he purchased milk from.

sourcrates

josie37 wrote: »

Thank you for your reply. He was a milkman and owed the money to the farmer he purchased milk from.

Well a company can add interest to an unpaid debt, but a debt of £4000 that turns into £40,000 should of set alarm bells ringing extremely loudly !!

If he is also using a debt management company that charges, then hes been stung twice.

This sounds very dodgy to me, if it were me, I would be cancelling my arrangement with this DMC, and asking the debt collector to :

(1) provide me with evidence of my liability for this debt

(2) provide a full statement of the account to see how this interest was accrued.

It matters not what was signed in the past, if it was signed under duress.

josie37

Thank you, I will pass this on to him and hopefully start to resolve the matter.

josie37

This is probably a daft question. But once he has the information from Federal Management, who would he turn to then?

Willing2Learn

Just come back here. Sourcrates and others will always be here to advise. If, at that time, you decide you want to speak to someone for support, then you would need to contact StepChange or other free debt counselling service.

sourcrates

josie37 wrote: »

This is probably a daft question. But once he has the information from Federal Management, who would he turn to then?

We mainly deal with consumer credit act debts on here, they are regulated differently, and have there own complaints process.

Firstly he should exhaust the debt collectors own complaints process.

He could contact business Debtline, a free advice service, for advice, and he may also be able to complain to the FOS about the debt collector, that would fall under the remit of the financial ombudsman.

josie37

Thank you for all the replies!